BUSINESS LIVE / 11 JULY 2021 - 16:18 / BRYAN TURNER
The world is facing a difficult road in its journey to recover from the negative economic effect of the Covid-19 pandemic.
The deepest global recession in decades occurred in 2020, despite governments’ efforts to counter the downturn with fiscal support.
The World Bank’s Global Economic Prospects report projected a 5.2% contraction in global GDP in 2020 and the International Labour Organisation noted in a recent report that the Covid-19 crisis would push global unemployment over the 200-million mark in 2022. It is therefore vital that governments boost economic growth and job creation to offset the long-term effect of stalled economic activity.
One of the most effective ways to create jobs and improve economic growth is by encouraging foreign direct investment (FDI). A steady flow of FDI can provide access to new markets, and often introduces new technologies and injects technical expertise into an economy, making it a major catalyst for development.
As most foreign investment is injected into existing businesses in the host country, this usually translates to job creation and higher wages. FDI also helps strengthen bilateral, regional diplomatic and commercial relations among countries. A predictable and transparent political playing field is key for FDI investments to take place.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER