Over the last decade, South Africa has made an attempt to tap into the benefits of Foreign direct investment. South Africa is in a position where they feel changes to their economy need to occur, and the best option is to make their country more appealing to FDI. FDI will promote growth through jobs, technological advancements, and diversifying their economy (Daniels, Radenbaugh, & Sullivan, 2009, p. 479). South Africa has had a clear vision of what they would like their country to aspire to, but have face numerous challenges that prevent countries from FDI. They do not have sustainable economic growth, declining population, safety issues, and perceived corruption. These four aspects have been tremendously difficult to draw in foreign investment. South Africa will have to continue to show head way in the areas of foreign incentives, image problem and weak infrastructure to become more appealing to FDI.
Cost and Benefits to South Africa Having FDI
The benefits of FDI in South Africa will help drive the unemployment down and promote growth within the country. When FDI enters South Africa, they will have to outsource to their local resources. The transferring of management skills, to local managers, takes place when investors set up new plant, acquire companies or outsource to local subcontractors (Mwilima, September 2003). The more foreign investments in South Africa, the more opportunity for jobs to arise. The will allow for South Africa’s economy to thrive because South Africa has one of the world’s highest unemployment rates in the world. Through the locals increasing their ability to have a job will in turn help with the growth of the economy. The growth will also promote the improvement of technology to good and services within South Africa. Transfer of technologies is expected because foreign companies will use technology from their home country. From a developmental perspective, it is more important than technology diffused will...
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