The unit, International investment and economic development has the auspicious objective of imparting crucial knowledge on various aspects of investment in international market and the overall economic development around the globe. However, the usefulness of the unit is immense to the readers as it makes an effort to provide an in-depth discussion on economic development and investment at global arena. The extent of the discussion and its detailing can be understood from the fact that the entire unit is segregated into 11 separate weeks and each week concentrates on important elements associated with the topic, i.e. International investment and economic development. Right from explaining the meaning of the term economic growth to other various terms; from analyzing the effects of globalization on international investment to specification of countries on the basis of their global economic status, the unit contains detailed resources to enable the readers to understand the impact of international investment on economic development. This unit specifically focusses on international investment and economic development around the globe in an effort to highlight the existing economic situation globally.
In an effort to ensure that the readers get a definitive idea as to the gains that the unit in whole has endured to those who have completed the unit successfully, gains from different weeks are summarized below.
In week 1 the gains include learning how to use the cyber class learning materials. Various terms have also been defined in week 1 along with the above hence, the participants have understand the meaning of various terms to proceed with the unit subsequently.
Gains from week 2 has mainly been limited to the lessons learned about various terms as the week was specifically invested on defining various important and key terms in relation to international investment and economic development. In addition understanding the theoretical background of economic growth and how economic growth has stretched to different parts across the globe have been understood from week 2. Also the cost and benefits associated with economic growth and difference between the economic growth and economic growth have been understood in week 2 (Saidi, 2018).
In order to achieve success in international trade it is important to have significant knowledge about different aspects of international trade. In week 3 specific attention was given to the nuances required to achieve desired success in international trade. Understanding about double taxation benefit in international trade has also been gained from this week. Double taxation treaties (DTT) and bilateral investment treaties (BIT) were also discussed in this week, i.e. week 3 to gain knowledge on these two important components of international investment and trading. The reason for formation of Organization for Economic Development and Cooperation (OECD) and its responsibilities have also been discussed in this week. Thus, specific knowledge on OECD and its importance have also been gained during this week of learning in the unit (Popkin and Ng, 2018).
Discussion about international investment and economic development in general will never be completed without discussing globalization. Globalization and its impact on international trade including internationalization of firms and the benefits of such steps have been understood from the discussion in week 4. Thus, the participants in week 4 has gained significantly to accumulate knowledge on globalization and its effects on international investment and economic development.
The knowledge gathered from the resources in week 5 is about the importance of ethical issues in international investment and trade. The importance of ethical issues in international trade and investment has been discussed here. In this part of the unit various definitions have also been provided to explain the meaning of different terms associated with ethical issues in international investment. The discussion of ethical issues has extended to both national and corporate perspectives thus, the participants are equipped with knowledge to assess the ethical considerations from both national and corporate perspectives to take an objective view on the topic (Malawer, 2018).
In week 6 the research is extended to country specific international business to understand the impact of international trade and investment on global economy with specific attention to different countries. As a result how the developed, developing and under developed nations have affected to international investment has become easier to assess with the information provided in this week and subsequent weeks. Information on international treaties and impact of these treaties on economic development and growth of different countries have been discussed in this week.
Identification of new income countries along with extent of foreign direct investments in low income countries have been discussed in week 7. Understanding the ethical issues such as environmental issues, labor practice issues, corruption and human right issues have been in low income countries has been an immense gain to the participants in week 7 in this unit (Levy, 2016).
Knowledge about classification of countries on the basis of incomes have been discovered in week 8. In addition the participants have gained significant knowledge about the middle income countries and the challenges these countries face due to the international investment in the future. Specific discussion on Brazil, a BRICS countries is provided in week 8 to enable the participants understand the impact of modern economic system in a country like which has in a very short span of time emerged as a global economic force.
Knowledge gained to identify transitional countries is provided in week 9 hence, significant amount gain has been made in this week to gather necessary knowledge to identify such countries in globalized world. Again the lessons have extended to assessing the ethical issues including environmental issues, labor practice issues, corruption issues and human rights issues in transitional countries. Thus, the participants have gained immensely by acquiring knowledge as to understand these important elements associated with transitional countries (Kónya, 2017).
The discussion in week 10 has shifted to high income countries and ethical issues in high income countries. The knowledge gathered in week 10 will help the participants in assessing the role of high income countries in overall international investment and economic development around the globe. The gain is not limited to this as the participants will be able to identify high income countries subsequent to the completion week 10.
In final and 11th week the discussion has solely limited to South-East Asian countries and sustainable community development thus, knowledge from week 11 will help the participants to understand the importance of community development along with international investment and trade.
The unit has specifically concentrated on the different aspects associated with international trade and economic development. It is clear that subsequent to globalization the volume of international investment and trade have grown by multiple times. In fact the growth in international trade and investment have been phenomenal subsequent to the globalization. However, the discussion in this unit clearly shows that international investment and economic growth have not been equal for different countries. Despite so called globalization the difference between low income countries, middle income countries, transitional countries and higher income countries have grown significantly (Jiang and Su, 2018). Thus, the impact of globalization has proven to be more beneficial to the high income countries and developed nations such as United States of America, Canada, Great Britain, France and other such countries as opposed to low income and under developed nations such as India, Brazil, China and other Asian countries. The difference between high income and low income countries in terms of wealth and income have further broadened despite free flow of capital and trade between these countries subsequent to globalization. Thus, this clearly shows that developed and high income countries have taken the advantage of their position to attract most benefit out of the international investment and trading activities as opposed to low income and middle income countries.
However, the stories of transitional countries such as China, Russia and other major transitional countries have been very encouraging to say the least considering these countries have done exceptionally well over the years and especially subsequent to globalization. Thus, to some extent it would not be fully correct to put the blame on the developed and powerful nations for the failure of low income countries to take complete advantage of globalization and international investment (Ihara and Iwahashi, 2019).
However, as a result of the ever increasing disparity between high income and low and middle income countries the reverse trend has initiated. Many large countries are trying to bring new rules and regulations to strengthen the rules and regulations to making it difficult for other countries to invest and do trade in these countries. These countries mainly taking such steps to protect their interests in the future. Thus, the future is not looking very good for countries which have reached their pinnacle in terms of economic growth especially from domestic market and looking to make significant international invest to continue growing at a stable rate in the future. Developed and high income countries are expected to face significant difficulties in the future to keep on growing at same rate without increasing their international investment. Thus, economic development and growth in these countries are expected to take a hit until unless new initiatives are taken to maintain stable rate of economic growth in the future.
The ever increasing ethical issues, especially environmental issues have hit the developed, developing and under-developed nations very hard in terms of their economic growth and sustainability. In many large countries including USA, Canada, Australia, United Kingdom, India and many other countries, there are thousands of large projects that have been stalled due to various issues associated with environment. In fact with each passing day, conducting business is becoming extremely difficult with ever growing environmental protests on number of issues related to economic development and growth. Thus, the future outcomes do not look very promising with the growing backlash on number of investment and development issues (Ihara and Iwahashi, 2017).
In addition to the environmental issues there are many other ethical issues that have badly affected the credibility of international investment including globalization phenomenon. These issues include labor practice issues, human rights violation and corruption issues. These issues have had negative impact on economic growth and development as the credibility of international investment has been hit badly due to these ethical issues (Griffiths, Legood and Pitt, 2016).
Many countries including China, India, Russia and other large countries have experienced large number of incidents where international investment have resulted in numerous violations of labor practices. As a result the credibility of international investment has taken a huge beating resulting in large number of protests against globalization and expansion of business activities in many countries. In fact countries such as China and India have experienced huge increase in number of child labor resulting in severe backlash against big multi-national companies. In addition huge protests against foreign direct investments (FDI) in countries like India have resulted in stalled investment projects in these countries. These have resulted in significant loses to major investors and as a result they have put the investment initiatives in these countries to the back burners.
The ever growing corruption and negative impact of corrupt practices have badly impacted the economic development and growth. From accounting scandals at Enron to Satyam IT fraud, all these have negatively affected the economic growth as the confidence in international investment and trade have gone down with each cases of corruption (Gopinath and Chen, 2018).
Thus, with current scenario the future looks quite grim for the international investment and economic growth. It is also important for large, developing and high income countries to recognize the need of low income and under developed and developing nations to give certain concessions as it would be incorrect to expect the other way round. Hence, lack of flexibility and understandability between countries have badly affected the international trade and investment and subsequently the economic growth. In fact the case in point of the trade war between the US and China can be used as both the countries are suffering due to the trade war between the two economic giants are continuing for quite some time now. Thus, the future outcomes are certainly not in line with the objective of globalization (Beladi and Marjit, 2018).
In summary, it is clear that though international trade has had a huge impact of on economic development and growth across the globe but the challenges are increasing with each passing day. Despite globalization accepted by most of the nations on the face of the planet the fact that the international investment has not shown any major improvement in last few years is nothing short of alarming. The discrepancies between high income, middle income, transitional countries and low income countries have grown with each passing year resulting insignificant backlash from different parts of the society. Further the concentration of wealth across the globe has dampen the positive effects of growth. With ever increasing wealth accumulation and concentration of wealth to only a handful people has badly hurt the growth and economic development across the globe. In fact as per a recent data, world’s more than 90% of wealth is currently accumulated and held by mere 2% of world’s people and the rest 98% are living on the balance 10% wealth. Thus, concentration and accumulation of wealth has increased despite growth in international investment and trade. Immediate changes shall be made to modify the existing international investment and trade rules to achieve better results from international investment to achieve optimum economic development in the future (Anderson, Becher and Winkler, 2016).
Conclusion:
Taking into consideration the discussion it is clear that there are number of challenges in front of the global leaders to make necessary changes to improve international investment and subsequently, the economic development in the future. Reducing the wealth disparity between high income countries and middle, low and transitional countries is important to the overall international investment and economic development. It is also important to give due importance to ethical issues including environmental issues associated with business expansion, labor practices, corruption issues and human right issues. Concentration on all these aspects will improve both international investments and economic development in the future.
References:
Anderson, C., Becher, H. and Winkler, V. (2016). Tobacco Control Progress in Low and Middle Income Countries in Comparison to High Income Countries. International Journal of Environmental Research and Public Health, 13(10), p.1039.
Beladi, H. and Marjit, S. (2018). A general equilibrium analysis of foreign investment and intersectoral linkage. The Journal of International Trade & Economic Development, 12(4), pp.213-218.
Gopinath, M. and Chen, W. (2018). Foreign direct investment and wages: a cross-country analysis. The Journal of International Trade & Economic Development, 18(5), pp.231-231.
Griffiths, U., Legood, R. and Pitt, C. (2016). Comparison of Economic Evaluation Methods Across Low-income, Middle-income and High-income Countries: What are the Differences and Why?. Health Economics, 25(21), pp.29-41.
Ihara, R. and Iwahashi, R. (2017). Attracting foreign investment: Optimal ODA policy with trade liberalization. The Journal of International Trade & Economic Development, 18(12), pp.193-211.
Ihara, R. and Iwahashi, R. (2019). Attracting foreign investment: Optimal ODA policy with trade liberalization. The Journal of International Trade & Economic Development, 21(14), pp.208-222.
Jiang, L. and Su, Y. (2018). Foreign direct investment and wage differentials. The Journal of International Trade & Economic Development, 21(8), pp.525-536.
Kónya, L. (2017). Saving and investment rates in the BRICS countries. The Journal of International Trade & Economic Development, 26(5), pp.429-449.
Levy, V. (2016). Anticipated Development Assistance, Temporary Relief Aid, and Consumption Behaviour of Low-Income Countries. The Economic Journal, 102(388), p.446.
Malawer, S. (2018). State Economic Development & International Investment. SSRN Electronic Journal, 2(2A), pp.10-201.
Popkin, B. and Ng, S. (2018). The nutrition transition in high- and low-income countries: what are the policy lessons?. Agricultural Economics, 39(12), pp.199-211.
Saidi, K. (2018). Foreign Direct Investment, Financial Development and Their Impact on the GDP Growth in Low-income Countries. International Economic Journal, 32(3), pp.483-497.
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