Foreign direct investment in Arab countries

Prof. Dr. Moustafa El-Abdallah Al Kafry

Foreign direct investment in Arab countries

دور النوعية المؤسساتية في استقطاب الاستثمار الأجنبي المباشر في الوطن العربي = The role of institutional quality in attracting foreign direct investment in Arab World - IIUM Repository (IRep)

Prof. Dr. Moustafa El-Abdallah Al Kafry

International business environment characterized by intense competition for the current foreign capital between different countries. As a result of the important role played by foreign direct investment in the provision of the required funds for investment, technology transfer and contributing to the creation of more jobs and strengthening the rules of production and export and improve the skills and management expertise and achieve the competitive advantages of the national economy and raise income levels and living standards.

In this respect, countries scrambled to create an environment attractive investment, intensified competition among states to attract foreign investment by removing barriers and obstacles in their path and give them incentives and guarantees to facilitate arrival and entry to the domestic market. In this context, the developing countries to enact legislation granting incentives for foreign investors.

I – Concept and definition of foreign direct investment:

Known as foreign direct investment, according to the manual preparation of balance of payments statistics issued by the International Monetary Fund in 1993, that (international investment which reflects the additional resident entity «company or institution or a bank» in the economy as a lasting interest in an enterprise resident in another economy.

Referred to as resident entity «direct investor», and to the institution «institution direct investment». involves the permanent interest of the existence of long-term relationship between the direct investor and the institution, in addition to the investor a high degree of influence in the management of the institution. not only direct investment on treatment principle or of origin that led to the relationship mentioned between the investor and the institution, but also all subsequent transactions between them, and all transactions among affiliates, whether they contribute or not contribute). This definition is consistent with the definition of the United Nations Conference on Trade and Development UNCTAD and the concept of the Organization for Economic Cooperation and Development OECD.

And take the guide to producing balance of payments statistics of the Census Bureau and local experts the 10% adopted as an international standard for the distinction between direct investment and other types of capital flows, in order to facilitate the international comparability of FDI statistics published by countries around the world.

II – Forms of Forms of foreign direct investment (FDI):

Foreign direct investment takes many forms, including:

1 – Projects of common property (joint investment): This is a joint project between the foreign investor and local investors, and to varying degrees, determined in accordance with the agreement of partners, according to the laws governing foreign ownership.

2 – projects – fully owned by foreign companies in the host economy: This form of investment allows full control of the foreign element in the decision, but this is not favored by many countries where the investor, fearing it would lead to dependency and economic domination by foreign investors.

3 – multi-national companies: the companies that have many projects in different countries of the world, is characterized by these companies of the magnitude of its work and activities, “and can say that foreign direct investment and multinational corporations, two things go hand in hand, he used Economists combine them in a way synonymous.”

Is the phenomenon of foreign direct investment by multinational corporations, or the so-called transnational corporations, the most prominent events that have taken place at the level of international economic relations during the past three to four years?

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Foreign direct investment in Arab countries

Foreign direct investment in Arab countries

Dr. Moustafa El-Abdallah Al Kafry

Contents

I – Concept and definition of foreign direct investment: 2

II – Forms of Forms of foreign direct investment (FDI): 3

III – Institutions of foreign direct investment: 4

IV – Foreign direct investor: 5

V – Capital of foreign direct investment: 5

VI – Effects of FDI on the economy of host countries: 6

VII – Potential positive effects of foreign direct investment: 7

VIII – Potential negative effects of foreign direct investment: 8

IX – Importance of FDI in the economies of Arab States: 9

X – FDI trends at the global level and the Arab States: 12

XI – Inter-Arab investments: 17

XII – Islamic guidelines for foreign direct investment: 18

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