Negative impact of foreign direct investment
Answers
Foreign Direct Investment refers to the investment made by foreigners, who show interest in the businesses of our country. They invest in our businesses with the purpose of getting profit from this investment in the future.
For example: China invests in Pakistan because they see that they will gain profit, by investing in Pakistan. They see potential resourcefulness.
FDI (Foreign Direct Investment), Disadvantages:
Even though growth of the country happens, but it has negative impacts as well like:
1- Too much FDI leads to, high dependence on foreign investments for the sake of your country's' growth.
2- Too much FDI, may lead to foreigners taking over your country's shares, and ownership, for instance in a public limited company.
3- Issues of domestic investment will arise. Domestic or the locals wont benefit from investment, their opportunity will be gone.
4- exporting goods may cause the prices to rise overall.
5- may lead to possible colonialism in future.