FDI and ‘political’ violence in Pakistan’s telecommunications

Abstract

A lot of research studies assess the effects of the so called ‘political’ violence on foreign direct investment (FDI). Yet the circumstances that, within reality, co-determine the FDI flows into Pakistan’s telecommunications remain tacit. This article investigates the simultaneous relation between FDI and so called ‘political’ violence, in Pakistan’s information and communications. It analyses the violence phenomenon and shows how that disrupts the smooth flows of FDI, commerce and trade. Pakistan’s telecommunications is one of its economic sectors that attract enormous foreign direct investment. After the 11 September 2001 attacks, Pakistan has become a frontline state in the so-called ‘War on Terror’, along with NATO and USA. This has resultantly disrupted Pakistan’s smooth trading activities. Namely, the demand for imports has declined, thereby drastically reducing the FDI inflow into the country. The results of the study highlight the reasons behind the decline in FDI into Pakistan and also lead to policy recommendations for improving the country’s economic self-development. The conclusion is drawn based on the literature review and analysis of data relevant to the telecom. Lastly, the study includes some suggestions for future research, to continually improve Pakistan’s economic and societal circumstances, by utilizing the resources FDI provides.

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