Host country and Multinational Investments
Host country and Multinational Investments

Host country and Multinational Investments

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  • Pages: 3 (1500 words)
  • Published: September 27, 2018
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Less developed countries can offer more The fact that these countries are called less developed, poor or developing countries, does not necessarily mean that it is true. They may be economically challenged, but it does not mean that they are incapable of progress. More often than not, these countries’ resources only needs to be tapped and distributed strategically in order to be useful and help in uplifting the economic status of the country.

One way of improving the economic situation and the reason why major investments keep coming in less developed countries is human resource.By capitalizing on human resource, which produces labor, in turn pumps up the production of businesses, major investments are attracted to do business in these countries. Untapped natural resources are also one of the major factors that make investors consider placing their money on these developing countries. This ultimately contributes to the eagerness of developing countries to attract FDI. If FDI enters developing countries, the potential for growth and development increase.Improvements for various sectors of economy are made available, bringing the developing country one step up into increasing competence in the world market.

Thus, the economic ties are created. The developing countries knows what it needs to be improved, on the other hand, major investors are looking for resources they can fully utilize. This scenario creates a perfect economic relationship between investor and host economy. The challenges that a competitive market has brought upon countries is overwhelming.It has spurred creation of new economic strategies, business ventures and marketing plans. The economic value of a coun

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try has been the yardstick to which all other countries are measured.

This way, countries could gauge the power and influence they have based on the rank they occupy in the world market. Similarly, the competitive market has encouraged entrepreneurs to widen their scope and expand business all over the globe. This is primarily the reason why developing countries that serve as hosts countries do everything they can to attract more and more investors.In this age of technological advancement, various products proliferates the market. Industries compete to outdo one another and to ensure their respective companies’ success. The competition continues to heighten, bringing the focus outside the home country.

This means that companies tend to invest in other parts of the globe to widen their consumer reach. This aim of widening their market provides an avenue for host countries to show that they are the perfect venue for more investments.Host countries strengthen their image as investment-worthy by highlighting their available resources such as manpower and natural resources. Given these two vital factors for economic growth and sustainable development, investors are challenged and become increasingly interested in engaging in various investment areas made available by the host country. In today’s trend of market availability of almost anything from basic necessities to luxurious items, selling is not as easy as it used to be.

Various aspects need to be ascertained.This includes consumer want and needs, target market, pricing, competition and over-all image of the company. That is why it is necessary that the host country can provide the essentials of what the investors need.

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This includes availability of labor, transfer of technology and skills. III. Developing Countries and Multinational Investments: Different hosts Long before the recognized term of FDI, which stands for foreign direct investment existed, there have been regional agreement among countries.

These regional agreements involve investment and trade.This so-called Global Economy began in the 1990s. These established the three “trade blocs” namely Europe as its hub. Americas, with U. S at the center and the East Asia as third, together with Japan and China as dominating countries.

Like South Africa, different countries strive to get their share of foreign direct investments (Hanson, 2000). More importantly, similar to South Africa, these countries do have existing impediments that hinder them from engaging in foreign direct investment, more so in presenting their country as a viable host (Lane, 2001).One example is Israel. As a country having a modern and technologically advanced way of living, Israel can very well be a very spot for investment (European Business Journal, 1998). However, it was not always like that in Israel.

They also had a transition period. This means that before Israel rise to the rank of one of the 21st century’s most competitive nation, Israel also experienced economic down slope. It originally was a low-technology and heavy industry economy, something that did not stimulate interest of investors.One of the well-known companies in the field of investment is Shell. Also known as the “Royal Dutch” being owned by the group belonging in Netherlands and Great Britain. Shell, as a multinational company own majority of the oil companies around the world, and in less developed countries.

This includes Nigeria, South Africa, etc. This advantage experienced by Shell is due to the fact that it provides less developed countries much of the income they need, not only Shell but also other Multinational Investment corporations that utilize to the point of exhaustion.The resources of the host country are maximized and used for the benefit of the investor. This is a classic example of why less developed countries remain that way, despite investments.

It is because of the fact that there are less strict laws imposed on investors. However, it changed. In Nigeria, during the early 90’s the government begun its activist role in ensuring the safety of their environment and protecting their resources. However, in order to keep abreast with other developing countries, Africa needs to continue restructuring its economy.It has to broaden its recognition for the need of capital and entrepreneurship through foreign investments. The question now is that how would such changes affect the still fragile condition of underdeveloped and developing nations? Would the world economy growth benefit or hurt them? The edge host countries need to project Presently, the concern is focused on Israel’s current political State.

Due to the situation, Israel is experiencing an economic slowdown.However, because of the high potential for growth and development, attributable to the fact that aside from advanced technology, Israel can offer manpower given the fact that it has over six million, majority of whom are English speaking citizens. Israel has played an important role for Canadian exports that is why Canadian firms

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