Fdi And Globalization

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Globalisation can be defined as a process of worldwide integration and convergence of economic, political and culture system. It is the restructuring of interactive phases among nations by breaking down barriers in the areas of culture, commerce, communication, through trading not only of goods and services, but of ideas, information and technology . The essential nature of globalization is the compression of space and time, as a result, the world becomes smaller, and interactions among different people begin to look like those within a community. This thus leads to an increase of trade and investment due to the falling of barriers and the interdependence of countries. It is Characterised by trade liberalization, free capital mobility, privatization,…show more content…
A recent and specific example is the perceived role of FDI in efforts to stimulate economic growth in many of the world 's poorest countries. Partly this is because of the expected continued decline in the role of development assistance (on which these countries have traditionally relied heavily), and the resulting search for alternative sources of foreign capital. More importantly, FDI, very little of which currently flows to the poorest countries, can be a source not just of badly needed capital, but also of new technology and intangibles such as organizational and managerial skills, and marketing networks. FDI can also provide a stimulus to competition, innovation, savings and capital formation, and through these effects, to job creation and economic growth. Along with major reforms in domestic policies and practices in the poorest countries, this is precisely what is needed to turn-around an otherwise pessimistic…show more content…
This also excludes, in most cases, subcontractors, labour brokers and contract workers who are not discussed but are also workers that contribute to the value created by the MNC operations.
In this seen The effect of globalisation on Africa’s man-made capital has been positive, because of the fact that with capital mobility and financial liberalization, foreign investors in search of new investments will invest financial capital into African territory. Also the increase in the freedom of MNCs will mean greater permeation of African continent and this will increase the pace of technology transfer.This has lead to a decrease in unemployment rates.

It has also opened African countries to intense external scrutiny and exercised pressure for greater transparency, openness and accountability in
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