IMPACT OF POLITICAL INSTABILITY ON ENERGY GDP AND FDI

Topics: Investment, Economics, Regression analysis Pages: 6 (983 words) Published: April 22, 2015


IMPACT OF POLITICAL INSTABILITY ON GDP, FDI AND ENERGY
Mariam Zahra, CH Ahsan Zafar, Hibba Zafar, Mahnoor Zafar, Tayyaba Yaseen, Abdul Haseeb
Section E
University of Central Punjab

Background:
Energy is very important for daily life activities and its deficiency can have severe impact on people lives as well as the economy of the state and that’s why it is considered to be one of the most fundamental rights of the people and also the most important obligation of the government to provide the state with the capacity of the energy. FDI is a major source of external finance which means that countries with limited amounts of capital can receive finance beyond national borders from wealthier countries. (About News). The FDI is being considered as the most crucial element for developing economies to support their national markets. The FDI inflows are essential for Pakistan’s economic growth also because it also encounters gap in its savings and investments. Pakistan’s economy is not able to generate sufficient internal sources for maintaining the pace of its economic action. (Zeshan Anwar, 2014). Having foreign direct investment in a developing country enables the employment and exploitation of natural and human resources, to implement innovative businesses practices, in terms of management and marketing, and facilitates in reduction of budget deficit. (Amna Muhammad Gudaro, Fall 2010) The gross domestic product (GDP) measures of national income and output for a given country's economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time. The Gross Domestic Product (GDP) in Pakistan was worth 236.62 billion US dollars in 2013. The GDP value of Pakistan represents 0.38 percent of the world economy. GDP in Pakistan is reported by the World Bank Group. (Trading Economics, 2014) Significance:

We choose this topic for the following multiple reasons:
We will be able to collect authentic secondary data.
The conducted research will help us to understand the economic phenomenon. It will lead us to the best feasible solution.
Objectives:
To contribute towards stabilizing the political situation of our country. Improving the economic condition of the country by applying logical solutions and techniques. To Gain fruitful results from the best of our knowledge.

Literature Review:
First Article is named as “Energy Crisis in Pakistan: Reception & Adoption of Energy Saving Campaign Messages by PEPCO” by Mr. Shahzad Ali and Mr. Nashid Anjum Shah. This research is expounded to enlighten the wastage and squandering of energy in terms of electricity. The campaign indirectly enforced masses to adapt these messages to avoid the ultimate extinguishment of energy, which is inevitable. The study was conducted between two classes in terms of economic status, namely Middle class and lower class. To conduct the study the nine hypotheses were formulated and finally it was suggested that the government should initiate some solid steps to acclaim their regime in terms of electricity, in spite of depleting their energy in embroiling. (Shahzad Ali, 2012) Second Article is named as “Impact of Terrorism, Gas Shortage and Political Instability on FDI Inflows in Pakistan” by Mr. Zeshan Anwar and Mr. Talat Afza. The objective of this study is to empirically investigate the FDI determinants in Pakistan from the year of 1980 to 2010 through utilizing annual time series dataset. This is the first study to test the impact of terrorism, gas shortage and political instability (together with control variables which include inflation, GDP, trade openness, exchange rate and investors’ incentives) on inflows of FDI in Pakistan through utilizing ARMA research model and OLS regression technique. The control variables of GDP, incentives offered to investors and trade openness have positively affected FDI inflows whereas exchange...

Cited: About News. (n.d.). Retrieved from http://usforeignpolicy.about.com/od/introtoforeignpolicy/a/what-is-FDI.htm
Amna Muhammad Gudaro, I. U. (Fall 2010). Impact of Foreign Direct Investment on Economic Growth. Journal of Management and Social Sciences, 84-85.
Shahzad Ali, N. A. (2012). Electricity Crisis in Pkaistan. Pakistan journal of social sciences, 185.
Trading Economics. (2014). Retrieved from http://www.tradingeconomics.com/pakistan/gdp
wadhawi, R. (2011, 09 28). Retrieved from CSS forum Civil service of pakistan: http://www.cssforum.com.pk/css-compulsory-subjects/essay/essays/54746-essay-terrorism-pakistan-its-causes-impacts-remedies.html
Zeshan Anwar, T. A. (2014). Impact of Terrorism, Gas Sshortage and political instability on FDI inflows in Pakistan. International Standard Serial Number, 507.
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