What are the benefit of foreign investment?
The power of attracting foreign companies to invest in a country as a mean to push the economic sector forward indirectly. There are many good side effects to which countries that can encourage foreign investment to invest thoroughly.
In various ways, foreign investments provide huge benefits for one country and people in a country, but along with a dark side that someone might say. One might indicate that foreign investment will reduce local productions in the way that competition will be high to deal with. Local companies will be lost demand since they cannot compete with the international standard of foreign companies. However, the economy is confronted with competition as always, one good side is that competition leads to diversification.
Apart from the dark side, the possibility of good impacts on the economy in the country is big that we cannot throw away this opportunity at all. Job opportunities are increased, the economy will jump high, improve human resources, increase on export, product’s price will be low, and so on so far. This article will detail each benefit of foreign investment.
1. Increase Job Opportunity
The more investment the more opportunities will be opened for people in the country, even rural, or urban areas. As we can see in Phnom Penh right now, there are many job applications for individuals who intend to find a job to their financial support for family and themselves. A construction worker is one of many examples that we can take into account as an example. Due to development in the Cambodian capital, through foreign investment, many buildings have been constructed which provide various jobs for construction workers or students who study related majors.
Also, the white-collar workers are satisfied with numerous opportunities that have been waiting for themselves almost everywhere. Considering new foreign companies that just set up in Cambodia. Those require potential workers who fit into jobs in their company.
2. Enhance Economic Growth
The visible benefits that contribute to economic growth from foreign investment in one country are tax revenue for the government and reduction unskilled workers to receive a job. Foreign investment in a certain country requires paying tax to the government. By doing this, tax revenue will be taken by the government to contribute to development. One more thing, some foreign investment, including factories, or industrial sectors, will contribute to helping unskilled workers to receive a proper job which led to a decrease unemployment rate in certain countries.
3. Improve Human Resources
When some companies entered a certain country, the demand for new skills will be increased which lead people eager to learn a new skill in order to be suitable for a job competition. For instance, we can see the Chinese language has been interested in many Cambodian people nowadays. The reason behind this progress is that currently there is much Chinese investment in Cambodia, so learning Chinese is a must for people who would like to have a high salary job in the Kingdom.
According to these factors, we can indicate that foreign investment acquires huge benefits for a country in various sectors. In the sector of job market opportunity, economy, and human resource are enhanced regarding foreign investment. Therefore, in the era of globalization, foreign investment is a need for countries to attract as much as possible.
Source: Cambodia Time