A critical appraisal and evaluation of the constraints and legal protections for foreign investment - Dissertation Example

It is for this reason that states and international communities strive towards organizing transactions with the objective of extracting the maximum from foreign investments. Moreover, states and businesses aim at protecting their investments because of the fact that foreign investment is characterized with the internal and external movement of capital turnover and exploitation. Many developing countries believe that foreign investment is an urgent need for achieving economic growth and adopting better technology in their production processes.

Developed nations can exploit their technical expertise by investing their capital in developing countries and thus make optimum use of the resources available in these countries. But this need cannot be effectively achieved unless an appropriate environment is created for foreign investments. This implies that foreign investments cannot be made efficient unless a stable process is applied to carry out actions and transactions in a suitably created environment that is free from fear and uncertainty.

Additionally, such needs require the implementation of the initial provisions in terms of the existence of such circumstances in order to effectively deal with hurdles that could result in scaled investments and contractions. This is necessary in order to alleviate the intensity of such problems, which is possible only if a legal framework is determined in carrying out the required operations. This paper aims at achieving this goal by examining the varied constraints that obstruct or prevent the smooth flow of foreign capital.

It is also important to examine and search for protective measures in terms of legal security for domestic investments. This is best done by balancing conflicting commercial interests independently and without bias and without violating the legitimate rights of the contracting parties. In considering the given perspectives, a critical appraisal and evaluation of the constraints and legal protections for foreign investment will be made by making a descriptive and analytical appraisal of different issues.

The paper will first analyze the phenomenon of foreign investment in terms of legal and economic concepts. Next, an investigation will be done of the emergence and the development of the phenomenon of foreign investment. Finally, the role of foreign investment in the development of trade and the economics in different countries will be discussed. An acknowledged belief in regard to foreign investments is that the advantages accruing from them depend on how they are dealt with by the host country.

Researchers have made qualified propositions to the effect that properly regulated foreign investments have the potential to create economic growth, employment, technology advancements, skilled manpower, market accessibility and development of the economy. It is necessary to balance the negativities of foreign investments with their positive effects by adopting applicable systems of control and taxation. Thus, it can be said that foreign investments can be good or bad for any economy, depending on how they are dealt with.

This viewpoint is being increasingly accepted in many countries. It is believed in this regard that foreign investments are indispensable for the development and growth of developing economies, no growth is possible without foreign inflow of capital, foreign investments bring efficient ways of managing resources, technologies, competition and accessibility to international markets. Developing countries are not being forced by any entities to seek foreign investments but their governments need them.

The private sector is