Foreign investment has been called both a blessing and a curse for developing countries. Explain how this can be the case. What has to happen for foreign investment to be considered more consistently as a blessing? Provide concrete examples in your answer
What will be an ideal response?
Ideal Answer: The ideal answer should include:
1. Define foreign investment.
2. Discuss how foreign investment can be both a positive and a negative, touching on such harmful issues as governmental loss of control that may come with foreign investments by MNC's, and beneficial aspects such as the expansion and creation of industry.
3. Explain how foreign investment can become a consistent benefit, touching on the need for a stable local labor supply, and economic growth in the host country that will sustain demand for goods, as well as consistent local productivity growth.
4. Discuss particular examples of direct investment as a blessing – China, South Korea, Taiwan, Hong Kong, Turkey, Argentina, Ecuador, etc.
5. Offer a concise summary and effective conclusion.
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