 Picture Credit: The Commonwealth |
Foreign direct investment (FDI) has increased tenfold over the last 20 years. This kind of investment brings private overseas funds into a country for investments in manufacturing or services (for example, General Motors building an auto factory in the Philippines). FDI can bring impressive growth, as in China's coastal provinces, but also instability and economic distress, as during the 1997-98 Asian financial crisis. Governments of many poor countries see foreign capital as a means of economic growth, and they have taken steps to attract it. These steps often include minimizing business regulation and weakening codes for labor, health, and the environment. Such governments may also try to improve the investment climate by using violence to silence opposition parties and movements. Rich countries, for their part, have sought legal protection for investors, and have used the World Bank and the IMF to impose new arrangements in this field. Bilateral and multilateral agreements, such as the North American Free Trade Area, protect investments at the expense of environmental and health regulations. The proposed Multilateral Investment Agreement (MIA), under negotiation at the WTO, would replicate this imbalance at the global level.
General Analysis on Foreign Direct Investment
Tables and Charts
