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The global financial crisis is expected to have major consequences for investment—foreign and local—in 2009 and onwards. Already tighter credit conditions and lower corporate profits have weakened companies’ capability to invest. In fact, world FDI flows were estimated to have already declined by 21% in 2008. Despite this gloomy prospect, positive driving forces remained at work. There are a number of reasons why foreign investors might remain committed to FDI, even in the midst of the crisis. In particular, new sources of FDI have emerged, especially from the South-South investment. Hence, to effectively deal with the crisis and take advantage of the available opportunities for new investment, it is important for governments to resist the temptation of protectionism, and instead maintain an overall favorable and open business and investment climate. The proposed House measure to liberalize land ownership is a positive step to enhance the country’s locational advantage of FDI, and sends a clear signal for renewing its commitment for a quick recovery in FDI inflows. However, it is important to learn the lessons and performance of other countries in their land liberalization policies. Many of the states cited in this paper discriminate against foreign ownership and foreign use of land through various restrictions and regulations. Moreover, it is important to point out that before any efforts to liberalize land ownership, the existing market inefficiencies in the land sector should be addressed. Specifically, reform measures should be made to improve the efficiency of national land use policies and land administration system and processes. Finally, FDI inflows are also influenced—to a larger extent— by other economic fundamentals such as large market size, higher education levels and productivity, better infrastructure and lower domestic lending rates. Hence, the government should work towards reducing operational barriers, e.g. approval process, and sectoral restrictions.

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Panel Bot Budgetg Brieferbudget Briefer

 

 

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finffacts in figures

Panel Bot Budgetg Brieferbudget Briefer

 

 

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finffacts in figures

Panel Bot Budgetg Brieferbudget Briefer