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globalisation and effect of fdi to host countries
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What is globalisation? Defined in ordinary language it means the deregulation of financial markets, the privatising of government enterprises, and the dismantling of barriers to the free movement of goods and services between countries. For the first time in history almost the entire world population lives in a global capitalist system with the aim of free movement of goods and services. The drive for globalisation is economic growth and prosperity, especially for poorer nations whose economies have often been the most restrictive in the past. The problem is the irrational nature of the global market, coupled with the extreme vulnerability of the poorest and most marginalised in emerging economies to sudden changes in exchange, interest rates, or big investment decisions. Globalisation therefore can sometimes be destabilising. According to one school of thought "FDI is a double edge weapon" which cuts both ways. This notion has been proved by a study wherein it is pointed out that those who run the global economy do not know what they are doing as the belief in regard to lifting controls on the movement of capital would rejuvenate economies, maximise the efficiency of capital utilisation and prevent capital flight has been lost during the last few years.
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