Foreign Investment

Topics: Investment, Finance, Capital accumulation Pages: 1 (262 words) Published: April 27, 2013
Foreign investment can be considered a blessing because foreign investment promotes economic growth between the investing company and the developing country. Trade between these countries will likely increase and there will be a job increase in the developing country as well as a possible cheaper resource for the investing company. Investing companies may also provide goods and services that may have been lacking which will hasten the development of the country. But with these perks, there comes draw backs. A developing country that has too much foreign investment will find it very hard to hold their own, as their economy could become very dependent on foreign companies (i.e. if the EU creates a monopoly in the oil manufacturing in a developing country, that developing country cannot run their own refineries and are threatened by hurt relations). Relations between a overly invested country can lead to foreign investors highly recommending the developing country to allow certain powers or laws to pass in the favor of the foreign investor or face penalties (such penalties would severely hurt the countries economy as the investors are the main source of income). For foreign investment to be welcome with open arms to any country, the investor would have to be barred from monopolizing and must price goods or be taxed enough for cheap goods that could easily be provided by the investor not by domestic companies. Foreign investment is two sided and should be in the best interest of both countries. The greatest benefit in foreign investment should be seen as an increasingly globalizing economy.
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