Dubai American Academy

FDI represents a preference for immediate gratification over longer term interests such as autonomy and stability which are integral for reliable economic development.

Read my comment. I already noted how a shift away from FDIs is needed for a stable economy.

Sometimes, it is a necessary sacrifice. It improves the lives of the populace at a rate that would be impossible to support through domestic means. There will certainly be long term consequences if the country is unable to shift the economy away from foreign dependence.

I guess my argument is that it all depends on execution.

Was this a class debate? Completely dead now.

The countries you have listed have state-controlled economies or market-controlled states (S. Korea). Singapore is on the brink of bubble collapse. Foreign investment must be viewed through long term consequences, not just short term economic growth.

Singapore attracts foreign investments as a tax haven. Its market is built entirely upon foreign investment. As other less developed countries open up to foreign investment, investments in Singapore will dwindle. Without a domestic economy to support itself, the country will collapse.

S. Korea, on the hand, is controlled by the private sector. The largest corporations have formed a trust (Chaebol) that controls every aspect of society. Almost all foreign investments are filtered through their decision process. They have created their own bubble, but that is separate from the FDI's. Their absolute control prevents unsupported growth from FDI's.

Basically, not every country can be run like S. Korea. Many fall into the Singapore category even more so without state-controlled markets.

FDI worked great for Hong Kong. Its entire economy was based on FDI's. It was the only developed "Oriental" market in that region for many decades. This was the key to its success. Now that the rest of Asia has opened up, its economy has stagnated. The good thing is that its nearby neighbor China, has turned it into a tourist (shopping) destination. It should be able to sustain itself for a while longer with this new market, at least until better international shopping districts open up in Asia.

Taiwan is similar to Israel. Israel was propped up by the US for strategic control in the Middle East. Taiwan was propped up by the US for strategic control against China. This is why the US has been so adamant in defending Taiwan's rights to secession/independence. Their economies used to be completely reliant on the US. Now that they have transitioned to self-sustained economies, they are powerhouses in their respective regions. Not every country is lucky enough to be funded by the US.

China's economic boom is separate from FDI. FDI suggests foreign ownership. Most of the manufacturers in China are state-owned. The rest are owned by Chinese nationals (nepotism). Only recently, has China opened its doors to foreign investments. It was a state-controlled market for many decades, there was no way for a foreign entity to establish any foothold.