Thesis (MBA)--Stellenbosch University, 2002. / ENGLISH ABSTRACT: The study project was aimed at analysing the factors that account for the
difference and intensity with regard to the attraction of FDI inflows by
developing countries and the benefits brought about by this FDI. It is believed
that economic growth can only be achieved where there are no barriers to
trade. Trade liberalisation forms the central part of the structural adjustment
programmes advocated by the international financial institutions, the World
Bank and IMF. The theory of comparative advantage lies at the heart of
trade. There is a strong belief that countries will benefit more when
specialising in producing goods and services in which they are efficient, those
that they can produce at lower costs than other countries. However,
researchers like Madeley, (2000:50) argue that the benefits of free trade can
only be realised if trade takes place between countries at equal levels of
economic development. This is true when one takes into account the fact that
developing countries are not well equipped to cope with more developed
countries and when looking at the intensity of trade in both cases,
With trade liberalisation and competitive global economy, the developing
countries are forced to turn to multinationals because there is hope that
through them they can benefit from global trade and be able to compete for
the limited resources. It is only through the attraction of foreign direct
investment or by influencing the location decisions of multinationals that
countries can achieve sustainable economic growth. This is so because
globalisation and trade liberalisation have concentrated the power of trade in
the hands of the multinationals.
Multinationals have advantages in global trade because they possess distinct
/ superior assets which enable them to compete well in the global market.
These assets include efficient production processes and continuous process
improvements, the ability to eliminate unnecessary process steps, they enjoy
economies of scale because of mass production and standardisation, they
possess managerial and marketing skills and they can obtain less expensive
financial resources because of their credit worthiness. The use of advanced technology by multinationals gives them the power and advantage in the
sense that they can achieve high levels of quality in terms of consistency in
production and timeliness. Multinationals have built strong relationships with
suppliers, banks and other organisations in different fields, world wide.
It is, however, noted that developing countries continue to face problems and
challenges with regard to the attraction and maintenance of foreign direct
investment because these multinationals favour countries where they are sure
that their investments will get sustainable future returns. It is, however,
imperative that developing countries position themselves advantageously
when competing for FDI. In light of this, some developing countries have
opted to enhance their fitness and abilities through the promotion of regional
integration and cooperation among themselves and neighbouring countries,
for purposes of complementing each othe~'s weaknesses and working
together towards achieving common goals.
The factors which contribute to the attraction of foreign direct investment
include:
• Rigorous basic education system plus provision of appropriate
education.
• Size of the economy and the market.
• Cost and quality of local inputs.
• Governance, political stability and stable macroeconomic policy.
• Infrastructure (telecommunication, roads and the internet).
When analysing Botswana, it was noted that the country relies heavily on the
mining sector as the major source of foreign direct investment and economic
growth. The country needs to diversify the industrial base away from mining.
The government needs to pay attention to the factors which deter FDI
investment in Botswana. / AFRIKAANSE OPSOMMING: Die studieprojek het ten doel die ontleding van die faktore wat verantwoordelik
is vir die verskil en intensiteit in die aanlok van invloeie van buitelandse
direkte belegging (BDB) deur ontwikkelende lande en die voordele wat deur
hierdie BDB teweeggebring word. Daar word beweer dat ekonomiese groei
net bewerkstellig kan word wanneer handel nie belemmer word nie. Die
liberalisering van handel maak die kern uit van die strukturele aanpassingsprogramme
wat deur die internasionale finansiële instansies, die
Wêreldbank en IMF, voorgestaan word. Die teorie van vergelykende voordeel
is die kern van handel. Daar word geglo dat lande meer sal baat indien hulle
spesialiseer in die produksie van goedere en dienste waarin hulle bedrewe is
en wat hulle teen laer koste as ander lande kan produseer. Navorsers soos
Madeley, (2000:50) beweer egter dat die voordele van vryhandel net
verwesenlik kan word indien handel plaasvind tussen lande met dieselfde vlak
van ekonomiese ontwikkeling. Dit is wel die geval wanneer 'n mens die feit in
ag neem dat ontwikkelende lande nie goed toegerus is om met meer
ontwikkelde lande mee te ding nie en wanneer 'n mens na die intensiteit van
handel in albei gevalle kyk.
Met die liberalisering van handel en mededingende wêreldekonomie word
ontwikkelende lande genoop om hulle tot multinasionale maatskappye te
wend in die hoop dat hulle sodoende voordeel kan trek uit internasionale
handel en om die beperkte hulpbronne kan meeding. Slegs deur buitelandse
direkte belegging te lok of deur die besluite oor die ligging van multinasionale
maatskappye te beïnvloed kan lande volhoubare ekonomiese groei
bewerkstellig. Dit is so omdat globalisering en die liberalisering van handel
die handelsmag in die hande van die multinasionale maatskappye geplaas
het.
Multinasionale maatskappye geniet voordele in wêreldhandel omdat hulle
bepaalde / superieure bates het wat hulle in staat stel om mededingend te
wees in die wêreldmark. Hierdie bates sluit in doeltreffende
produksieprosesse en deurlopende prosesverbeteringe, die vermoë om onnodige prosesstappe uit te skakel, die feit dat hulle skaalbesparings geniet
danksy massaproduksie en standaardisering, bestuurs- en
bemarkingsvaardighede besit, en goedkoper finansiële hulpbronne kan
bekom danksy hul kredietwaardigheid. Multinasionale maatskappye se
gebruik van gevordere tegnologie verleen aan hulle die mag en voordeel in
dié opsig dat hulle hoë vlakke van gehalte in terme van konsekwentheid van
produksie asook tydigheid kan bereik. Multinasionale maatskappye het sterk
verhoudings met verskaffers, banke en ander organisasies op ander gebiede
wêreldwyd opgebou.
Ontwikkelende lande staan egter steeds voor probleme en uitdagings rakende
die aanlok en behoud van buitelandse direkte belegging, aangesien hierdie
multinasionale maatskappye ten gunste is van lande waar hulle seker is hulle
beleggings volhoubare toekomstige opbrengste sal oplewer. Dit is egter
noodsaaklik dat ontwikkelende lande hulself voordelig posisioneer wanneer
hulle om BDB meeding. In die lig hiervan het sekere ontwikkelde land besluit
om hul geskiktheid en· vermoë te verbeter deur die bevordering van
gebiedsintegrasie en samewerking tussen hulle en buurlande met die doel om
mekaar se swakhede aan te vul en saam te werk om gemeenskaplike
doelwitte te bereik.
Die faktore wat bydra tot die lok van buitelandse direkte belegging is onder
meer:
• 'n Streng basiese onderwysstelsel plus voorsiening vir behoorlike
opvoeding.
• Die grootte van die ekonomie en die mark.
• Koste en gehalte van plaaslike insette.
• Regering, politieke stabiliteit en stabiele makro-ekonomiese beleid.
• Infrastruktuur (telekommunikasie, paaie en die internet).
Met die ontleding van Botswana is daarop gelet dat die land baie afhanklik is
van die mynbousektor as die belangrikste bron van buitelandse direkte belegging en ekonomiese groei. Die land moet die nywerheidsbasis weg van
mynbou diversifiseer. Die regering moet aandag gee aan die faktore wat BDB
in Botswana verhinder.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/52742 |
| Date | 12 1900 |
| Creators | Kebalefetse, Batshedisi Pearl |
| Contributors | Roux, A., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 94 p. |
| Rights | Stellenbosch University |
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