The results of the labor of its citizens determine a nation’s wealth. A large manufacturing base is vital, improved by the service industry. Nationalists believe in reasonable tariffs that protect the nation’s industry. Free trade is harmful to a nation’s wealth because it favors multinationals over regular citizens. Foreign investors are usually given exorbitant concessions such as tax exemption, which allows them to unfairly compete with local businesses.
Multinationals are not concerned about a country’s development and the welfare of its citizens. They care primarily about making a huge profit. It weakens old nationalities and eliminates the small businessmen and favors large multinationals. The promise of more jobs, if delivered, are usually low paying jobs. Free trade functions to equalize the masses (locals) while elevating the elite and their acquiescent politicians.
Most country’s political leaders like direct foreign investment because most times they benefit personally with kickbacks. They get foreign exchange to make the economy grow and praise the amount of jobs that will be created. but is it a fair exchange? The big business usually gets ten to a hundred times what it is giving. If foreign direct investment is to truly benefit a nation, political leaders must get a better deal. It is not easy, because multinationals usually put one nation against another in a race to the bottom. Nation X offered me this: what do you have to offer? Countries like China, who have been able to use foreign direct investment, encourage partnership with Chinese nationals and demand more, such as technological transfers.
Foreign direct investment should stimulate the target country’s economic development, creating a more conducive environment for the investor and benefits for the local industry. Foreign direct investment creates new jobs, as investors build new companies in the target country, create new opportunities. This leads to an increase in income and more buying power to the people, which in turn leads to an economic boost.
However, many developing countries have experienced that foreign direct investment has resulted in modern day economic colonialism, which exposes host countries and leave them vulnerable to foreign companies’ exploitations. Although foreign investment is ripe with opportunities, it is also fraught with danger!!
When Belize’s politicians talk about foreign investment, they only say the good things and that usually leads to Belizeans being exploited because they were sold a dream and were not told the truth. It is a double-edged sword. Examine the ASR/BSI debacle. Many cane farmers have been run out of business.
The WTO was created “to advance the interests of private agribusiness companies.” It is not answerable to any nation’s laws. The WTO can foist disciplinary penalties or other measures on member countries that violate their regulations. The WTO can force countries to accept genetically modified crops.
The WTO is the evolution of the General Agreement on Tariffs and Trade (GATT) created on January 1, 1995. Large countries like the United States have ignored WTO rulings such as the case brought against her by Antigua and Barbuda, but small or powerless countries must obey or else. It usually acts as a justifier for the powerful.
In short, small states need to rethink all these international organizations designed by developed countries for their benefit. We were not the architects of the international organizations and we rarely benefit from them. They are usually instruments of powerful nations. Globalization was not designed to benefit laborers (regular citizens) – it was designed to benefit capital (big business). The benefit to the ordinary person is just a veneer to justify big business making exorbitant profits on the backs of the masses.
Brian E. Plummer