Foreign direct investment is investment by foreign companies in the local economy. But FDI needs comprehensive services because service sectors are vital to attract foreign investment. In the past, governments restricted foreign direct investment through protectionism.
Many conservative governments failed to implement service sectors, leaving the country behind developing countries. They chose a closed-door policy, making it difficult for foreign countries to export their products or to do investment in their intended country.
As a result, the closed countries left were far away from modern technologies, knowledge and expertise, resulting in a lack of human resources. In fact, the benefits of FDI include increased competition and resource availability, as well as the transfer of knowledge and technology.
However, if a country opens up its economy, it needs good services for foreign investors without making roadblocks to them in many areas such as law and procedures. Foreign firms expect fair competitions, and they will regard protectionism as a serious barrier for them.
Employment rates and gross domestic product are also largely connected with foreign direct investment. At this juncture, service sectors contribute the increasing volume of foreign investments. Moreover, service sectors require infrastructural development that could benefit both domestic producers and foreign companies.
Neighbouring and regional countries are making plans to attract foreign investment after establishing good infrastructure and professional services to gain the trust of their foreign partners, who have many options for the prosperity of their businesses. They will not hesitate to make decisions while time goes fast and intense market competition grows.
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