Marcos Fava Neves

A strategy for international investments

By Marcos Fava Neves (chinadaily.com.cn)
Updated: 2010-05-06 11:42

In our stories here on China Daily, I had two opportunities to conceptually address the topic on international investments. The first was to evaluate international investments capacity to promote development and the role of Government and institutions, published on Feb 21. Then, I moved to discuss how to promote and regulate international investments (March 10). I want to come back to this topic, raising some other points to complement ideas based on feedback received from the two first articles from readers. Here I have four objectives: (1) raise these "good and bad" points, (2) address the need of a country/region strategy, (3) the need of companies to seek the world for opportunities and (4) the role of Government.

There is still a debate if receiving these investments is good or not for a particular country or region. We should not advocate in one side or the other, but get all the points and then make the analysis. International investments do have good points, discussed in previous articles, if they promote development, by bringing access to international markets and expanding the country capacity of exports, creating jobs and generating taxes for Governments, bringing knowledge to a country, bringing credit, and giving confidence, among other topics, to a country. If a country receives an international investment of a world class company, it is an endorsement for development and other investors.

The major topics of advocates against international investments that I received were linked to expatriation of resources from countries, exploitation of these resources till the end and excluding the possibilities of future generations of that country to use them in the future, sending profits away from local economies and bringing cultural shocks and cultural changes to local communities. Others fear the damage to competition in a country, due to the global capacity of a multi-national company that can even promote dumping on local markets, compensated by good results on other countries, in order to destroy local competition. This may bring exclusion of local companies in the long term. There are also some nationalist feelings, that only products produced in a local country, with local company, may be good for the local society. These points should be considered.

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