Dubai American Academy

The simplistic argument that FDI is modern day imperialism is a hugely simplistic and unsubstantiated argument. Cherry picking examples can render any argument as false. Granted, labour exploitation can occur as a bi-product of globalisation, vilifying economic development as such is inappropriate. FDI can stimulate the economic development of the country in which the investment is made, creating both benefits for local industry and a more conducive environment for the investor. Regardless of the intent of the MNC, inadvertently, FDI can improve the standards of living for the vast majority of countries. One example of such development, with minimal negative externalities would be the rapid growth of the Asian Tigers (Singapore, South Korea, Hong Kong, and Taiwan) from the 1960s to the 1990s, their success predominantly funded by foreign investment. These countries now top various lists for economic growth and HDI development. If this argument alone does not satisfy the aforementioned point, another example would be the case for Venezuela. Economic development aside, social awareness (calibrated through level of charity work and employee satisfaction), increased by 56.3% from 1992-2015. FDI augments, not only economic growth, but social welfare as it introduces a more globally acceptable level of labour dignity, previously not adhered to by the host nation. Benefits for the host nation aside, FDI enhances the domestic nation and MNC tremendously. Locating and operating out of different countries, increases the talent pool available to the country, enhances trade (aiding and increasing the domestic GDP), and perpetuates a notion of global citizenry, interconnectedness and interdependence.