Developing nations adapt leadership skills used in the already developed states in political and administration realms. Improvement of infrastructure has also been influenced by the business relations between countries involved in investment plans. Throughh the foreign direct investment initiative, a host country is able to get sponsors for its major infrastructure development programs Zarsky , p.
A good number of jobs have also been created and, in turn, the tax returns of the host country have improved. This also increases the standards of living to the beneficiaries of the investment programs. It cannot go without mentioning that FDI has created market for goods produced in different countries through production segmentation.
For example, Kenya produces tea and exports it to Europe and the Middle East and, in return, Kenya gets oil. Arguably, FDI has some negative impacts to the host country as we have already seen above. Apart from causing environmental degradation, it has also caused air and water pollution through setting up of industries Moosa , p. Cutting down of trees also promotes soil erosion.
Overexploitation of resources and manipulation of host governments are also common trends in such arrangements. Foreign direct investment FDI has also caused displacement of people and conflicts among governments and the locals who may be suffering while the country benefits at large. Positive impacts of FDI are, however, much greater compared to the negative results. To embrace industrialization, people have to learn to minimize the negative effects of foreign direct investment and the correct processes should be followed by the government while issuing foreign firms opportunities to invest.
Local people should also be given a chance to express their views, and they should be educated on the impacts of foreign business engagements so as to reduce conflicts and also minimize effects. As much as foreign direct investment programs are favorable to countries with huge economies, developing nations should also strive to excel in the program, as it contains many benefits in monetary, social or political benefits. Affiliate Program Refer our service to your friends!
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