Human Capital and Foreign Direct Investment: Lessons for Pakistan

Foreign direct investment plays a key role in economic development of all countries. Because of its enormous importance, a large number of empirical studies has focused on finding out the factors determining foreign direct investment. Level of human capital development is one of the major factors influencing foreign inflows. However, earlier studies examining impact of human capital on foreign investment inflows has majorly used literacy rate, school enrolment and government spending on education as its proxies. This paper also examines the impact of human capital as determinant of foreign direct investment. Contrary to earlier empirical studies, it uses cognitive skills as proxy for human capital. Cognitive skills measure the quality of education instead of literacy rate or government spending on education as proxy for human capital. Results indicate that human capital has significant positive effect on foreign direct investment for sample countries. This result is robust to disaggregated data for developed and developing countries. Other factors that determine foreign direct investment inflows are inflation, capital account openness, trade account openness and real income. Based on empirical results, it is recommended that the relevant authorities must make human capital as part and parcel of strategies aimed at augmenting economic growth in the country. There is also a lesson for a developing country like Pakistan to focus more on quality of education instead of school enrolment or education spending for attracting foreign direct investment to boost economic activity (J.E.L Classification Codes: O4, O15, P22).

Improving the Productivity and Sugar Recovery of Sugarcane by Potash Nutrition under Different Planting Methods

Sugarcane (Saccharam officinarum.L) is main stay for sugar industry in Pakistan. However, our average yield is for less than that of world average owing to the following reasons namely inappropriate use of cultivars, imbalance use of fertilizers and improper use of planting methods. In order to investigate and finding out a viable solution to the agronomic and management issues, a study consisting of two experiments was carried out.Randomized complete block design with Split plot design were used for conducting these experiments. First experiment was aimed at evaluating the ratooning, high stripped and sugar yield potential of three cultivars HSF-240, CPF-246 and L-178 under four different planting methods such as Pits with 90 cm spacing, Diagonal pits with 90 cm spacing, 90 cm spaced double row stripsand 120 cmspaced trench planting. Second experiment was focused to investigate role potash nutrition for cane crop under different planting methods. Four potash nutrition levels like 0, 100, 200 and 300 kg/ha were in sub plot whereas four planting methods (same as first experiment) were in main plot. After analysis of variance, it was inferred that 100 kg/ha potash nutrition is best treatment with planting method 90 cm spaced pits of diameter 90 cm in diagonal arrangement because of better stripped cane yield, high sugar recovery was possible by the combination of above mentioned treatment .Nutrient efficiency of 76.54 kg/kg and 53 kg/kg during both plant crop and ratoon crop year was also attainable with the supplementation of each additional kg of potash. Spaced trenches of 120 cm were also economically profitable; however, their economic yield is comparable with 90 cm spaced pits of diameter 90 cm. Potash nutrition is also important source for stripped cane yield improvement in ratoon crop but economically has less benefits as compared to benefit cost ration (BCR) of control and other treatments.However, sugar recovery was enhanced by the application of potash nutrition during both plant and ratoon crop years. The CPF-246 was found to be a highly potential cultivar which gave better yield of 95 t/ha and a good sugar recovery of 12.4%. The CPF-246 was also the best ratooning cultivar because it increased sugar recovery and sugar yield because of unique genetic makeup and adoptability to the Pakistani climate. It can be concluded that if sugarcane crop would be sown in 120 spaced trenches with the supplementation of 100 kg/ha K2O, it would be economically proficient with adequate sugar recovery. Moreover CPF-246 is the best cultivar amongst three for better sugar recovery and productivity.