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Article

18 Aug 2015

Author:
Aldo Caliari, Center for Concern, on UN Research Institute for Social Development

Investing in the SDGs: Whose Business?

The role of foreign investment in financing development has been a matter of considerable debate in the negotiations leading up to the Third International Conference on Financing for Development...While private capital inflows can help finance development, their contribution depends crucially on the specific conditions under which the investment takes place. Investments can generate jobs, bring technological and managerial capacities, and foster demand for local producers via backward and forward linkages between the foreign companies and local ones. Countries that have been able to make foreign investment play such a development role are those that have succeeded in unpacking and absorbing these investment-related benefits into the national economy. The challenge in this is that the host government’s objective of unpacking these benefits of foreign investment will frequently clash with the private companies’ objective of making a profit and achieving or maintaining a position of market dominance...