The world is fast moving towards a globalized economy, however, certain factors are still there which allow the nation states to follow their indigenous policies for the purpose of economic and social development. This may be true for most of the countries whose gross domestic product makes them attain the status of developed societies, but in case of low-level income nations it is not entirely possible for the respective governments to pursue totally home grown policies. Such underdeveloped countries are plagued with the necessity of adhering to the dictates of the semi-globalized economy of the world and forces out side their control play a major factor in influencing policies at home.
In this paper the writer has undertaken the job of seeing how a major factor of the semi-globalized world, i.e. foreign investment, effects the over-all industrial development of Pakistan. In this regards an effort will be made to not only to access the impact of investment on just the economy but also to see how the whole social structure of Pakistan is effected.
However, due to the restrictions of space the impact of foreign investment on the whole economy cannot be analyzed so large scale industry will be studied. For example, agricultural industry which will incorporate the wheat and maize crop and large scale manufacturing industry including textile, railway, transportation, and so forth. In recent years due to the nature of industrial development it has become hard to distinguish between large and small scale industry in terms of production capacity, therefore, the fact that small scale manufacturing industry including consumer items such as utensils, paper, plastics, steel, cloth, and so forth cause a massive shift in a country's economic and social development makes it expedient to take the small scale industry into our sphere of analysis.
In the year 1984-85 total grant and grant like assistance committed to Pakistan was 2300 million United States dollars1.