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Economic principles : FDI
Free trade and development Muhannad Hamid spring The Ministry of Trade While thinking of the developing countries in how to secure its economic future, it will be useful to recall the words of former Executive Director of the Bank of Krupp "City" and Walter. Riston "fading of the sovereign author of the book (that capital goes to where it is needed and stabilize the place, which improves treatment). There was extensive discussion of the place that needs capital and the meaning of good treatment. A few years ago the American Chamber of Commerce survey identified a so-called "Recommendations of international investment", which has become a guide to be followed by government bodies in order to attract capital needed by the process of economic development, on the one hand, On the other hand, the guide is adopted by many global ratings agencies, "agency Moody" by which classified countries in terms of investment environment negotiable or not, according to this classification, either that the State station to the stability of capital or the outflow of it. These principles, in a nutshell, that the companies and international investors falls Wen to : - 1-policy stable and predictable macroeconomic level : must be in the company of confidence in the economy, which invest the money to be administered in an efficient non fluctuates, any investor to be convinced that the law firm and not subject to change. Two-low political risk, so the investor able to rely on the coherence of the host government and its ability to maintain law and order, This is essential to any long-term investment. Three-large market capable of growth, since the size of the domestic market, and its potential for growth with a positive purchasing power to consumers in this market is a major incentive for investment, Companies do not want to invest in the market of low profitability. 4-free access to markets : the important factor here the competition to the degree of government intervention (whether by the government or investor host government) in the freedom of entry to and exit from the market, State, The more free market whenever it more attractive to international investors. 5-a minimum of government rules, so we must keep the cost of government intervention and government rules in the affairs of the profitability of the private sector to a minimum. 6-rights and the protection of property : must protect private property, therefore it is necessary to avoid theft of property ownership companies whether tangible or intangible, such as patents, copyrights ... etc.. 7-a strong infrastructure, ie, the ability to complete transactions and the delivery of products and services to markets. These may include infrastructure for transport services, electricity, insurance and accounting services and financial system or any of the fundamental factors that can not invest yield financially without it. 8-availability of high quality production elements : When it comes investor and the capital, technology and management, expected to add to the domestic market of skilled labor and raw materials in order to complete the system of success and profits. 9-strong local currency : they must preserve the value of the local currency. If placed in an investment dollar and then devalue the local assets, "resident in the local currency," which has lost part Sometimes all Astthmark original dollar. 10-free transfer of profits and interest income and equities, since the most important principle to the investor is to make a profit and get out. 11-favorable tax environment : taxes must be encouraging for the expansion of business. In spite of the importance of tax incentives offered to attract new investments. However, the company's decision to invest or not usually built on how the tax system to normal operation after the establishment of the project. 12-free operation of markets, so the company should be able to use the products they produce in a market to serve their production in other markets in order to maximize the overall efficiency and achieve better operation of production lines in the global markets, any sense of the integration of their production. The above is not easy or simple to implement, so, the expected results do not come quickly. and the governments are free to promote these features or principles. However, we should note is very important that the protection systems and other forms of economic isolation does not lead to independence as long as generate economic isolation in a global environment and head toward more openness and economic liberalism and thus economic integration, isolation does not serve the interests of economic development, could have previous experience had succeeded in achieving economic development independently, But this happened - as specialists-in a historic radically different from the conditions and realities of the current stage. on the one hand, On the other hand, these experiences have stopped at a certain failed with the continuation of the policy of isolation and obscurity had to face reality and return to integrate into the global economy. The road to success will not be easy or smooth, but we have to be road full of difficulties and obstacles in order to be prosperous and continuing success. So, it is necessary to deal on the basis of the policy of fait accompli and equal treatment with other economies that have become economic structures similar to a large extent not contain any substantive differences except for the differences imposed by the privacy enjoyed by each State or economic bloc itself, This similarity is one of the advantages of the current global economic system, which was designed to complete the process of integration and economic integration between the economies and the international transfer of the image of the global economy Standard