The Impact of Foreign Direct Investment on Human Development Index in Commonwealth of Independent States

ABSTRACT: Countries accepting foreign investments (FDI) from abroad, are cooperating with foreign partners, to have access to financial resources, better ideas, more skills, technology. Recipient countries are expecting these powerful partners to help them to develop or improve the local economic system. In return, foreign investors receive easily accessible cheap natural resources, cheap labor force and the possibility to create and expand new markets. Nevertheless, there is always a question, whether such collaboration with foreign investors has a good or bad influence on recipient country’s population. In this research the FDI’s impact on people’s quality of life and on education, health, income and life expectancy is analyzed. It is found out that, FDI inflows into the CIS countries improve the education, health, income and life expectancy in all CIS countries, except Azerbaijan. The present thesis reveals whether FDI inflows into 12 CIS countries are having any effect on the four Human Development Indicators (HDI) which are school enrollment, health expenditures, GNI and life expectancy. Regression analysis done by the program PAWS Statistics 18 of each country on collected statistical data demonstrates a possible correlation between FDI and HDI indicators in CIS countries. Statistical data for FDI and HDI indicators for the period 1995-2009 shows a general picture of each CIS country from the FDI and HDI perspectives, each statistical trend is demonstrated and interpreted. Keywords: FDI, HDI, CIS. ……………………………………………………………………………………………………………………………………………………………………………………………………………………