Articles and Documents
2012
Myanmar's Foreign Investment Crossroads (July 31, 2011)
American companies such as General Electric and Coca-Cola are taking advantage of the relaxation of US sanctions against Myanmar. Foreign Direct Investment could benefit millions of Burmese through improvement in energy, telecommunications, banking, and manufacturing. However, there is fear that the locals will be cut out of the job market because most Burmese lack skills required for such jobs. Without substantial investment in training and education, American companies might join other multinationals in employing skilled citizens of their own countries and exploiting Myanmar’s natural resources for refinement and sale overseas. (Al Jazeera)
2011
Growing Economic Powers Reinvigorate South-South Co-Operation (August 2, 2011)
In the past few years, emerging powers China and India have bolstered their investments and trade-relations with Africa and Asia. According to Thomas Elhaut of the International Fund for Agricultural Development (IFAD), this strengthening of “South-South co-operation” can lead to lasting development gains, but its promise should not be overestimated. For one, China and India have serious problems of their own: millions of their inhabitants live below the poverty line and both countries’ economies are dependent on (often volatile) relations with the global North. If South-South relations are to yield greater results, Elhaut argues, countries will need to focus on longer-term co-operative strategies and make sure to not leave the poorest behind. Additionally, the global South will need to engage with the global North, as urgent reforms in trade policies and agricultural markets are to take place at the global level. (The Guardian)
Indian Farmers Protest Massive Steel Plant (July 19, 2011)
The citizens of Odisha, an eastern Indian state rich in mineral resources, are fighting Pohang Steel Company (POSCO) in an effort to stop the giant firm from setting up a steel plant in the state. The government of India gave POSCO rights to 4,004 acres of land in 2005 and the project is estimated to total up to $12 billion. This is the largest foreign direct investment project in India to date, and the National Council for Applied Economic Research has stated that POSCO will earn the country $1.75 billion over 35 years. Critics of the project say that it will displace 22,000 local residents, leaving them without a means to earn livelihood and harm the environment in Odisha. The deal is especially under dispute because 75% of the land was given to POSCO in contradiction to the Forest Rights Act, a environmental legislative initiative. The case of Odisha proves that citizens need legal protections from the negative consequences of foreign direct investment. (Al Jazeera)
Investment Treaty Arbitration and Developing Countries: A Re-Appraisal (May 2011)
This GDAE Working paper examines the impact of Bilateral Investment Treaty arbitrations on developing countries. It criticizes the widely accepted views of scholar Susan Franck, who writes the BIT arbitration system is favorable to developing nations. Instead, the paper argues that developing nations are actually subject to a disproportionate number of arbitration claims and pay more in relative terms than developed nations do. (Global Development and Environment Institute, Tufts University)
Russian Seeks Foreign Investment to Fill Budget Gap (January 24, 2011)
The Russian government is eagerly seeking foreign investment as its financial position deteriorates. President Medvedev has reached out to international investors in an effort to attract money. Siberia's vast expanse of oil resources, at one point considered "off limits" to investment, are some of the key assets the state is looking to privatize. Russia's new found willingness to open its economy is removing many of the barriers to its World Trade Organization (WTO) ascension. (New York Times)2010
UN Agency Says Global Foreign Direct Investment Falls Sharply
Global foreign direct investment has fallen by 39 % in 2009. Not only developing but developed countries too have felt the decrease. Although Germany has recorded the largest rise in FDI, Ireland's FDI level has declined by $20 billion. Latin America and Africa have reported an inflow fall of 40%. (Wall Street Journal)
2008
China's Environmental Footprint in Africa (May 29, 2008)
NGOs and richer nations often criticize China's policies in Africa that promote economic growth at the cost of the environment and human rights. However, Chinese investments in oil and mining are not necessarily different from those of France, South Africa or the US, says Pambazuka. Rather than criticizing China's policies, the author suggests that richer countries should "strengthen the standards ruling their own overseas investments."
2007
International Investments: Is Policy Pendulum Swinging Back? (July 25, 2007)
A report titled "Why Investment Matters: The Political Economy of International Investments" argues that following the changes in the current global political context, governments are growing uneasy about foreign investments as their costs outweigh the benefits. In several countries, governments have "tightened existing investment rules" and have agreed on new rules to regulate foreign investments. Meanwhile, although they lack transparency and accountability and have been criticized in many developed countries, the number of private equity funds and hedge funds has increased. (Global Politician)
Latin American Governments and Foreign Investors (June 18, 2007)
The relations between governments and multinational companies are quickly changing in Latin America. Countries like Bolivia and Venezuela are leaving the International Center for the Settlement of Investment Disputes (ICSID) as they believe it is not "transparent and impartial enough" due to the heavy influence of the World Bank and Washington. The World Bank has long used its supremacy to force governments to implement policies favored by transnational corporations at the expense of the poor. To change this situation, Bolivia raised its royalty rates on hydrocarbons leading to an increase in revenues while Venezuela raised the royalties on foreign investors making huge profits. (World Economy & Development In Brief)
Foreign Investors Gone Wild (May 7, 2007)
International financial institutions such as the World Bank and the International Monetary Fund promote foreign investment in poor countries at all costs – often to the detriment of democracy, the environment, and basic human rights. Although several governments have announced plans to withdraw from the World Bank, Foreign Policy In Focus argues that this move will not be enough to release these countries from the "web of rules" designed to protect foreign investors. The author calls for North and South cooperation to create a more just and equitable international investment system.
The False Promise of Financial Liberalization (January 22, 2007)
Wealthy nations and international economic institutions, such as the IMF, the World Bank, and the WTO, have long promoted foreign financing as the fastest way to stimulate growth in emerging economies. In reality, argues this Project Syndicate article, this financial liberalization has done just the opposite. The surge in capital inflows appreciates the developing country's currency, causing decreased investment and slowing economic growth.
2006
Overview and Policy Messages: The Development Potential of Surging Capital Flows (2006)
This overview of the World Bank Global Development Finance 2006 report [link to full report] focuses on the responsibility of poor nations to effectively channel and sustain funds by creating a favorable macroeconomic atmosphere that encourages investment and aid. The 2005 increase in private capital flows reflects the growing trend away from reliance on public capital. The report praises financial integration among poor countries, continuing foreign direct investment appeal, and responsible allocation of financial reserves.
2005
Economic Development in Africa – Rethinking the Role of Foreign Direct Investment (September 13, 2005)
Foreign Direct Investment (FDI) often fails in creating jobs, transferring new technologies and promoting social progress. This UNCTAD report focuses on FDI's costs and benefits in Africa. It calls for its "replacement with a more balanced and more strategic approach tailored to African socio-economic conditions and development challenges."
Six Myths About the Benefits of Foreign Investment (July 2, 2005)
The current breed of development policy, touted by the International Financial Institutions and the governments of the wealthiest nations, emphasizes foreign direct investment (FDI) as the only way for countries to gain an advantage in the global market. In reality, the fickle nature of FDI can be crippling to a small economy. This CounterPunch article analyzes the real-world implications of FDI in the Americas and dispels six commonly held myths about foreign investment.
2004
A Big Deal? Corporate Social Responsibility and the Finance Sector in Europe (September 2004)
This report raises strong doubts about the effectiveness of voluntary approaches to Corporate Social Responsibility (CSR). The study, which examines seven different cases and initiatives (including the UN global compact), shows that, in the absence of binding standards for corporate behavior, the finance sector consistently undermines efforts to reach development targets in both poor and rich countries. Binding standards and sanctions for transgressions could make corporations accountable for their social and environmental impact. (Corporate Responsibility Coalition)
The World Development Report 2005: An Unbalanced Message on Investment Liberalization (August 2004)
The World Development Report 2005 focuses on foreign direct investment and calls on poor countries to adopt liberal policies to "facilitate investment climate, which in return enhances development." This paper takes a critical stance on the World Bank document by pointing out that the report only reflects the interests of rich countries while excluding poor countries from the development debate. (Bretton Woods Project)
Argentina Water Privatization Scheme Runs Dry (February 26, 2004)
Privatization policies by the World Bank and IMF have led 460 million people to depend on private water corporations for their daily supply. In the Rio de la Plata district in Argentina, the privatization of water resources has raised access costs and provided inadequate treatment of sewage. (Corpwatch)
Money for Nothing and Calls for Free (February 17, 2004)
Cheap labor in poor countries is driving the current boom in transnational call centers. In India, call centers employ 200,000 people with estimates of this growing by 68 percent over the next year. This article argues that call centers in poor countries provide little skill development, whilst creating social and health problems for workers. (CorpWatch)
For Five African Least Developed Countries, 2002 A Bad Year for FDI (February 13, 2004)
UNCTAD attributes the fall of foreign direct investment inflows into five least developed countries in 2002 to their "landlocked status," small market size, structural problems and political instability.
Workers Face Uphill Battle on Road to Globalization (January 27, 2004)
Over the last decade, China has attracted more foreign investment than any other developing country, largely attributed to its southern commercial hub, Guangdong, which grows 10 percent annually. However, this article argues that the lack of labor laws in Guangdong has caused tens of millions of industrial workers to struggle for basic rights, including their ability to earn enough money to send their children to school. (International Herald Tribune)
