Countries should make favorable Foreign Direct Investment policies

[Alpha Marine]

Ethiopia opened six new sectors for FDI. Within two years of the reform $96m in FDI was directly generated. Ethiopia’s Investment Commission also established a mechanism to address investor grievances prior to their escalation to international disputes. This has led to USD 5.4 million FDI retained to date.
The removal of entry restrictions in Myanmar, through a new negative list opening 70 sectors to full foreign ownership and the reduction of FDI screening through a unified investment law, led to a six-fold increase in approved FDI projects between FY 13 and FY 16, from USD 1.4 billion to USD 9.5 billion.

In Sri Lanka, the government adopted a new Inland Revenue Act in 2017 that helped improve tax transparency and administration and eliminated all tax holidays in favor of performance-based investment incentives.
Between 2015 and 2018, Jordan, Iraq, Ethiopia, Pakistan, Bosnia and Herzegovina, Armenia, Tajikistan Moldova and Kyrgyz Republic published comprehensive investment incentives inventories meeting standard criteria for transparency, accessibility, comprehensiveness, and sustainability, improving investor confidence.

In Iraq, the establishment of an investor grievance mechanism within the Basra Investment Commission led to USD 220 million in FDI previously at risk of divestment being retained.

In Georgia, USD 80 million FDI at risk was retained following the establishment of an Investment Ombudsman.



https://www.worldbank.org/en/topic/investment-climate/brief/investment-policy-and-promotion#:~:text=FDI%20brings%20investment%2C%20jobs%2C%20increased,policy%2C%20legal%20and%20institutional%20environment.

These are instances where policies have led to the growth of foreign direct investments.

Unlike other Asian countries, Hong Kong and Singapore realized a long time ago that foreign direct investments would help their economy grow. They became one of the easiest places for foreigners to do business.

In today's economy, we've seen how much the US and China benefit from FDI, primarily inward FDI. We know that favorable policies are not the only factor that promotes FDI but we can't deny the fact that it's a factor and a very important one. In 2021, the US inward foreign direct investment increased by $506 billion, that's an 11.3% increase.

Money is not the only thing FDI adds to an economy. Technology, new business practices Employment, and knowledge are also a few things FDI adds to an economy.
Obviously, companies coming into a country should be regulated but the regulation should be a little less strict so these companies would be motivated to come and do business.

Every investment has its advantages and demerits, that's why it's an investment, a risk must be involved. Some of these disadvantages include;

• Exposing countries to foreign political influence, especially developing countries.
• It can also influence exchange rates and interest rates.
• It can limit the growth of domestic involvement if they are not able to face the competition.

But if you use the risk/reward concept, the merits of FDI greatly overshadow the demerits.

So, for me, I believe governments of countries should regulate foreign companies and businesses in their country and also regulate their activities. Still, the regulations should not be too strict and unfavorable to the companies if you want to invite foreign business in.

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[coupable]

There is no economy that does not want to attract investments from anywhere. But this depends on the type of investment and its suitability with the economy. There are countries that monopolize important sectors of the economy so that competition decreases, especially in developing countries.
The United States does not put restrictions on investment in general and not only foreign. In addition to the flexibility of laws and ease of compatibility with investments.
Most developing countries have conservative societies and economies that are ravaged by corruption. This is not an investment-friendly climate.

[jackg]

Most governments and companies at least like to pretend they have limited resources available for investments in other areas. Most make investments as close to home as possible because they're not as risky and because they're likely easier to sell - you don't need to go internationally for a sale if you own an oil extraction company in a neighbouring country, you probably would (and would be expected to provide more information) if your company was on another continent instead (for example) or if a potential buyer feared government control over their purchase. I think domestic investments are better protected too by the local government if they're done by an entity they're familiar with.

[Silberman]

There is no economy that does not want to attract investments from anywhere. But this depends on the type of investment and its suitability with the economy. There are countries that monopolize important sectors of the economy so that competition decreases, especially in developing countries.
The United States does not put restrictions on investment in general and not only foreign. In addition to the flexibility of laws and ease of compatibility with investments.
Most developing countries have conservative societies and economies that are ravaged by corruption. This is not an investment-friendly climate.

Most economies area already doing this, and they only reserve this right in industries they deem to be strategic, like it is the case of oil production in some countries, but other than that most countries have opened their economies already, however investors are still wary and may not be as eager to invest in infrastructure and other similar projects as they are still nervous due to the economic crisis we experimented last year, but it seems the doom and gloom mood is finally subsiding a little bit and this could lead to a recovery which will make investors more willing to take risks.

[Die_empty]

The global economy is interconnected and interdependent making each national economy rely on each other for survival and development. Foreign Direct Investment is an essential component in the developmental plan of any nation which is why every nation wants to attract it by all means. But certain conditions can lead to an increase in FDI which include security, infrastructure, favorable policies, and transparent government.

Ethiopia has lost a large amount of its FDI because of the civil war. Every investor wants to be assured that his investment is safe. Recently some staff of the Dangote company was kidnapped by Ethiopian rebels and the firm had to pay ransom for their release. Regardless of the viability of the FDI policy, if there is no security, no multinational would invest in a conflict or wartorn nation. Myanmar, Iraq, Nigeria, Afghanistan, Haiti, Syria, etc are also facing a reduction in FDI due to conflict.

The major problem that is limiting Africa's development is an infrastructural deficit. Africa has enough mineral resources that can attract huge FDIs but these potential Investors are scared away by the lack of basic amenities. In countries like Eritrea, there are no good roads to transport goods and services, Nigeria has no constant power supply, Niger has no functional rail transport system, and some nations in Africa don't even have functional airports.

Favorable policies are good but creating a favorable economic environment should be paramount.

[coupable]

There is no economy that does not want to attract investments from anywhere. But this depends on the type of investment and its suitability with the economy. There are countries that monopolize important sectors of the economy so that competition decreases, especially in developing countries.
The United States does not put restrictions on investment in general and not only foreign. In addition to the flexibility of laws and ease of compatibility with investments.
Most developing countries have conservative societies and economies that are ravaged by corruption. This is not an investment-friendly climate.

Most economies area already doing this, and they only reserve this right in industries they deem to be strategic, like it is the case of oil production in some countries, but other than that most countries have opened their economies already, however investors are still wary and may not be as eager to invest in infrastructure and other similar projects as they are still nervous due to the economic crisis we experimented last year, but it seems the doom and gloom mood is finally subsiding a little bit and this could lead to a recovery which will make investors more willing to take risks.

After the industrial revolution, the world has become like a small village. One country cannot achieve self-sufficiency and benefit from its resources without opening the door to foreign investment. The problem is that these investments are determined according to strict controls governed by laws and procedures. In the best cases, the countries that need this type of investment are bureaucratic and do not provide adequate facilities. This is without addressing the security situation or the strategy of alliances in which countries monopolize other countries, making it an investment market and not allowing others to enter it.

[minime0105]

There is no economy that does not want to attract investments from anywhere. But this depends on the type of investment and its suitability with the economy. There are countries that monopolize important sectors of the economy so that competition decreases, especially in developing countries.
The United States does not put restrictions on investment in general and not only foreign. In addition to the flexibility of laws and ease of compatibility with investments.
Most developing countries have conservative societies and economies that are ravaged by corruption. This is not an investment-friendly climate.

You are right because i believe that every country wants the development of it's country from my understanding, so therefore i believe that any good country will directly make investors to come in their country for good benefits

[naira]

Don't overly conclude that entering foreign investment without limits makes a country's economy better. Aren't there a few countries that are too open and don't show the existence of their country's economic strength, instead they are subject to the policies of foreign investors, which are clearly not their right because we own the resources. Indeed, bringing in foreigners will provide an ideal effect, namely importing goods or services and increasing the country's economic growth, but this also requires limitations. I mean the limit here is foreigner can't invest more than 10%. Because then we will be able to control strong policies and be able to raise prices in the market as they should.

[Bananington]

So, for me, I believe governments of countries should regulate foreign companies and businesses in their country and also regulate their activities. Still, the regulations should not be too strict and unfavorable to the companies if you want to invite foreign business in.

Definitely not all countries are interested and need foreign investors if you can take a moment to think about it, so only countries that need them are looking to make these favorable direct investment policies, while the others are not making an effort to attract investors and do not even need them. Some countries that have very good economies from local investors and investments still maintain very strict laws against foreign investors, why in some other countries, the situation of things either under the influence of government or not under their influence is just discouraging and unfavorable for foreign investors.