Monday, March 6, 2017

Foreign Direct Investment 2017


As global Politics grapples with issues surrounding Open Markets versus Close immigration, investments are kept and driven into the largest economies, which have the strength of market size and numerous trade agreements, increasing access and influence, to record superior returns. Small economies, with much the same issues, have the advantage of granting greater access to decision-making, so investors, far removed from board rooms in large economies, are invited in, to participate, in small economy decisions and development, guiding their own returns on investment (ROI).


A country with strong working Governance practices, which has currently budgeted 4.39% of the nation's annual expenditure, is ideal for safe and monitored investment opportunities. A non-executive president, head of state, guiding the nation's population in their moral beliefs and ethical duties, backed by statutory independent regulators. A judiciary interprets the nation's laws, pronouncing punishment or rehabilitation on lawbreakers.  A parliament of lawmakers examines all angles and issues, to strengthen existing and make new laws to benefit its population. An executive cabinet supported by legal advice, designs policies and, through several well established ministries, oversees policy implementation and daily operations.

An economy, which devotes 28.2% of the current national annual budget in its Fiscal Policy to balance wealth distribution and prevent social unrest, is perfect for principal protection. The Ministry of Finance implements the executive's fiscal policy, working alongside the central bank's monetary policy, to balance the nation's budget and service debts, guaranteed by the nation but which the original borrower could not service. The expenditure category Charges on Account of the Public Debt deal with the current servicing (Principal and Interest) of the nation's debt. The budget line item Pension & Gratuities manages public officers’ retirement benefits.

A society with multiple Economic Drivers, which currently uses 5.48% of the nation's annual budgeted expenditure, is ripe for income growth. A ministry of energy and energy industries oversees the well-developed extractive industries, inclusive of the heavily depended on petroleum sector. An agri-business sector, under developed, is administered by a ministry of agriculture, land and fisheries. An under developed tourism sector is coordinated by a ministry of tourism. Planning and development, foreign affairs, labour and small business, trade and industries, are regulatory controls to facilitate commerce.

A nation's productivity depends heavily on its Infrastructure Management, of which 19.97% of the current national annual budget is devoted. Ministries oversee and administrate the nation's utilities (water and electricity distribution), works and transport, its housing, urban and rural development, in association with and alongside locally elected governing bodies, corporations and assemblies.

A population, the nation's people, its citizenry Human Development, which devotes 28.9% of the current national annual budget, is most important toward raising its standard of living. Numerous ministries implement and guide policies to affect health, education, social and family services, community (culture and the arts), sports and youth affairs, to constantly produce a highly skilled and productive population.

A society's safety, assigned to its Resource Preservation, concerns every aspect of property and people's life, which devotes 13.05% of the current national annual budget. A ministry of national security controls the approved budgeted financial allocation for the nation's defence force, consisting of its army, coast and air guard. The nation's police service is in total control of its own budgetary line item allocation.

Hence, investment invited into a small economy, having bilateral free trade agreements to access many large economies, is part of the decision making process driving results. Such investment is made safe and is monitored by the same or better governance practices than exist in large economies' boardrooms. Invited investment is protected from capital erosion by sound fiscal policy preserving its principal and maintaining its original currency value. Noting that, investment can fund opportunities anywhere in the world, it is actively sourced by many nations to fund new or the expansion of its economic drivers, but decisions to invest is mainly driven by a comparison of many nations’ resource preservation, human development and infrastructure management, policies, which guides performance. Foreign Direct Investment is invited to achieve synergies and needed Diversification.

Rationale

T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.