Determinants of Foreign Direct Investment in Landlocked and Least Developed Countries- Analysis with a focus to Malawi

Background and Introduction Capitalism is both a Political and Economic Process Economic Intergration into the world is an extremely important aspect of economic transformation FDI plays a Crucial role in terms of Fostering Economic Growth Most LDCs and Landlocked Countries are still struggling ( World Bank 2008 doing Business)

A case of Malawi-Background Malawi is a landlocked LDC situated in the southern part of Africa Currently the country is enjoying a growing economic and stable Political environment which is conducive for Doing Business; The current Government has also reviewed its Investment Policy and Trade Policies for economic Development; However, the recent survey of the World Bank of 2008 has seen Malawi going ten steps lower in doing business and ranking 3 rd from Last, indicating that its not doing a a lot in its climate for doing business

FDI AND DEVELOPMENT Positive Accelerates Growth Creates new Market Technical Innovation Enterprise Restructuring Creates Employment Improves Living Standards Negative Bad policies, drain in the countries economy

Significance of the study The study is going to help point out the necessity of using research information to create an attractive Investment climate. In particular : To see What Determines FDI in Least Developed Countries that are Landlocked To see how they can benefit from Trade Liberalization in terms of FDI flow; To see how improved Infrastructure with special reference to in Transport and Energy can help FDI; To see How they can benefit from Aid for Trade.

Other Studies done There are other studies that have been done and the following determinants have been pointed out

Hypothesis Trade Liberalization can increase FDI Good Infrastructure in particular Transport and Energy can help bring FDI; Aid for Trade is critical for Economic development.

How to come up with country determinants Rigorous Econometric Model of FDI -Regression analysis. It provides evidence for great importance and Positive impact on FDI stock of GDP and access to common market Analysis will be based on data containing information on FDI stock in 16 LDCS that are landlocked over the period of 2002 to 2006 Data Collection will be done through with Private Sector, Government Officials and Civil Societies

Budget The total cost of this research for each country will include the following ( The study intends to compare 15 countries, 5 in Africa,5 in Asia 5 in Europe and Latin America): US$ Travel Cost:10,000 Cost of accommodation10,000 Communication Cost 5,000 Stationery 5,000 Fees for Research Assistance 6,000 Other Miscellaneous2,000

Plan for project administration and utilization of resources The study will be done with Host Governments Officials responsible for Investment Promotion in Order to get ownership Workshops will be done in the host countries in order to get involvements and support from all key stakeholders; Follow-up workshops on recommendations will be done in order to make sure that FDI has started flowing in the country.

Proposal summary How I will present my proposal to relevant authorities, communities and funding agencies