Capital flight undermined private sector
13/7/2016 12:00 am
The Economist said Dr Abdul Karim shangar that States go to search for types of FDI to support domestic investment due to the gradual decline of the savings Inkling.
Shangar explained in an interview for local investment» morning» consists of direct and indirect investment, indicating that direct investment is through asset ownership or economic activities or the expansion of existing activities and control being long term investments and constitute the largest share of their need for huge resources, pointing out that indirect investment includes securities short term outweigh it doesn't mean their rights even owned debentures, bonds and currencies and loans.
He pointed out that there are several types of investment from domestic investment and the investment launches on the label be a funded and managed locally regardless of whether public or private sector, domestic income distribution economic theory between consumption and savings, compactness, in normal circumstance turns saving for investment.
And the difficulty of knowing shangar size compactness, stressing that income distribution is determined by the pattern of per capita income, so the national capital size small does not qualify for the necessary investments to promote national economy that big capital fled abroad because of force majeure.
He added that one of the main determinants of domestic investment is the income level, because the investment depends on saving that does not consist only in a high income, the public sector will be his role in financing investment to fill the gap after the lack of motivation of the private sector, the state here has the burden of general interest investments of infrastructure that doesn't turn the private sector, as well as the State invest capital-intensive sectors to enter the racetrack invest through a package of legislation and laws guaranteeing the rights of investors as well as From that State of infrastructure services.
Shangar pointed out that gross domestic investment was the construction of residential buildings and fixed business investment in equipment and other additions to inventory, and forms the residential quarter of private sector investments and 20 percent is the place in addition to the inventory, the remaining are either investments in businesses.
Shangar said that domestic investment is one of the determinants of foreign investment as giving signals to foreign investors about the nature of the economic and political situation of the State, an average size of domestic savings and private investment climate picture of GDP as well as focus on government spending on Brown Infrastructure.
Thus, foreign investment has developed various historic pictures after World War II as some industrial countries, particularly through public and private institutions to find overseas markets for capital investment, as well as natural resources believes markets and raw to run their factories, these investments have evolved from the commercial format (import and export) to establish departments and overseas branches of national institutions to the form of the acquisition of shares and bonds to establish multinational corporations based transit capital from the parent State to the host State.