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A Depressing Era in Offshore Investment?
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15122 |
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Section : |
CURRENT ISSUES
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4 / 1989 |
1,909 Words |
| Author
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Julian M. Weiss
Julian M. Weiss has written extensively on business and
international trade and has traveled widely throughout Asia.
His most recent book is The Asian Century (Facts on file,
1989). |
Investment practices by multinationals are undergoing major changes. This is an important trend in the world economy, since direct foreign investment (DFI) has been the principal engine of growth for nations at all stages of development in recent years. When the dust settles, say many experts, only a select group of LDCs (less developed countries), NICs (newly industrializing countries), and industrialized countries will attract capital in the way they have during the past four decades.
This is an important, yet seldom-discussed trend. Foreign investment in overseas plants, factories, and other corporate facilities has recast entire regions (such as East Asia's consumer electronics industries). It has ushered in tremendous forces of social change (as in Africa), and remains the cornerstone of many national economies (ranging from the Caribbean and South America to the Middle East). This torrent of capital, innovations, and technology emanating from advanced nations harnessed other forces throughout the globe, leading to ever-greater wealth and often the eradication of endemic poverty. DFI channeled to points offshore has, in a few years, left the world with ribbons of roadways, altered the concept of work itself in the Third World, and forged links across oceans that were unimaginable a generation ago.
A profound shift is occurring in the saga of offshore investment. "A lot of countries are worried about their continued ability to attract funds," according to C. Fred Bergsten, president of the Institute of International Economics. Parris Chang, director of the East Asian Studies Center at Penn State University, agrees, but believes that "not all countries will suffer." This is because "some spots in Asia still attract [investment]
... (1999 of 12242 Characters)
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