This study attempts to ascertain the importance of foreign capital inflows (FCIs) in Pakistan. We do so by first finding the key determinants of FCIs in Pakistan. Secondly, we attempt to investigate the relationship of FCIs with economic growth and finally we study the impact of FCIs on unemployment, poverty and income inequality. FCIs in this study are combination of foreign direct investment, remittances, foreign aid and external debt. Using data from 1973-2008 for Pakistan we found that growth is key determinant of FCIs both in aggregated and disaggregated forms. Moreover, FCIs have positive impact on economic growth in Pakistan. We also found that FCIs do help in reducing unemployment. Impact on poverty and inequality, however, was found to be insignificant. Results suggest that though FCI is beneficial for growth, the spillovers of the growth are not reaching the poor segment of the society. Policy makers should therefore focus on utilizing these foreign resources, especially remittance inflows, to strengthen domestic financial sector, reduce poverty and inequality. JEL Classification F21, F24, F29 Keywords International Capital Flows, Economic growth, Foreign Direct Investment, Remittances, Foreign Debt, Foriegn Aid, ARDL, Poverty Author's e-mail alionline83@yahoo.com Supervisor's e-mail...

This study focuses on foreign direct investment ("FDI") and its importance to the economy of South Africa. Recognising that FDI, notwithstanding the type, can contribute to economic growth and development, most countries including South Africa are constantly working to attract it, and hence its demand has become highly competitive. However, FDI does not go without some negative effects, such as conflicts between host and investor country, and the creation of damaging competition to local firms. These negative effects could be minimised if policies and strategies for the promotion and attraction of FDI is part of, and integrated into, general economic development and economic reform policies, and not seen in isolation. Although South Africa has implemented strategies to attract more FDI, a refinement of some of these policies is needed if the country is to be successful in this regard. / Economics / M. Comm. (Economics)

This study focuses on foreign direct investment ("FDI") and its importance to the economy of South Africa. Recognising that FDI, notwithstanding the type, can contribute to economic growth and development, most countries including South Africa are constantly working to attract it, and hence its demand has become highly competitive. However, FDI does not go without some negative effects, such as conflicts between host and investor country, and the creation of damaging competition to local firms. These negative effects could be minimised if policies and strategies for the promotion and attraction of FDI is part of, and integrated into, general economic development and economic reform policies, and not seen in isolation. Although South Africa has implemented strategies to attract more FDI, a refinement of some of these policies is needed if the country is to be successful in this regard. / Economics / M. Comm. (Economics)