Revue d'économie et de statistique appliquée
Volume 17, Numéro 1, Pages 40-55
2020-05-29

Sharingthe Wealth Produced By Foreign Investments Against Local Resources Exploitation An Investment Policy For Developing Countries To Promote Economic Growth

Authors : Bellir Rabah . Zakane Ahmed .

Abstract

Fighting underdevelopment was expressed in many countries by considerable investment efforts. Unfortunately, some countries eager to eradicate precariousness and unemployment often launched projects which not only had little contribution to economic and social progress, by even delayed it. It is obvious that development is not possible without investments. Unfortunately, local capital is becoming increasingly scarce. Foreign capital is fundamental to meet the ever-increasing basic needs. However, to provide this capital, foreign companies demand the most favorable conditions for their investments. To this end, through certain international institutions, they put developing countries in competition with each other to urge them to offer the best climate of business in order to maximize their profits. Profits are, in many cases, transferred outside in whole, which leads to the increase of underdevelopment. It is the vicious circle that must be broken, but how? This failure of foreign direct investment urges developing countries to act collectively in order to put forward their worldview for the implementation of the new concept of the sharing the wealth created by foreign investments that must be negotiated with States and international financial institutions. This means that in return for the facilities and tax exemption offered by developing countries to foreign investors, the wealth produced must be shared and the half must remain in developing countries to help them meet the needs of their population and contribute in fighting immigration (among others). This Win-Win solution meets the interests of both parties: On the one side, developed countries need more and more scarce raw materials and to grow their assets to fight against decay. On the other hand, developing countries need this capital to develop. For this purpose, they have to control the investment process; in-depth reforms must be completed in order to attract foreign direct investments and guide them towards the sectors to be promoted.

Keywords

Development, growth ; investment ; foreign direct investment ; business climate ; attractiveness ; sharing ; capital.