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What benefit does FDI (foreign direct investments) bring to a nation's economy?
My country's economy reach 6.3% percent for the year 2012, which is 2nd highest after China. It is heavily supported by huge FDI inflow and big domestic consumption. Our export has been dwindling as result of low coal and CPO price.
My question is, What benefit does FDI bring to an economy?
Also, do you think my country's growth is sustainable or is it fragile? as in my opinion it depends so much on foreign investors' opinion?
1 Answer
- 8 years agoFavorite Answer
FDI brings no benefit, if the country is experiencing a serious crisis of good governance. FDI just sucks the advantages like cheap labor and very flexible regulations, both of which are available in poor countries. I'm from Bangladesh and the only benefit of FDI is that it sucks the huge amount of unemployed labors of my country although the labor wage rate is abysmally low, comparing with any other country. Foreign investors are enjoying tax rebate for 10 years and they can send back all their profits without any reinvestment in Bangladesh, for 10 years too. Unfortunately, there has been few considerable benefits except labor absorption from FDI in Bangladesh.
Source(s): My own HorRible experience with these foreign cheats.