Report from the 11th EADI General Conference
Nine papers were presented in the Working group sessions "Transnational and development".
In the first session of the WG, Claire Mainguy presented a paper on Foreign Direct Investment impacts in Less Developed Countries. Her paper focused on the impact of FDI on Mali. The participants of the session discussed the important role played by FDI for the development of LDCs. Six main issues were raised: 1. the lack of stability of FDI flows (and its consequence for the LDC); 2. The pre-conditions needed for a positive impact; 3. The role played by the institutions; 4. The importance of regional integration in order to increase the bargaining power of the countries in their discussions with foreign investors; 5. The impact of privatization (especially of public utilities) on the poorest; and 6. The role played by aid in promoting FDI in least developed countries.
In the second session four papers were presented : Alfredo Coelho (Structural Change, Multinational Corporations and Collective Action Problems in the Tequila Industry), Filip de Beule (Conceptualizing the reciprocal impact of TNCs and host developing economies), Michael W. Hansen (Theories of linkages), Eric Rugraff (Export-oriented multinationals and the exports of medium and high technology products of the Central European countries). The discussion focused on the interaction between FDI strategies and industrial development in developing countries and Eastern Europe as well as the challenges and opportunities of upgrading local clusters through integration into global value chains. A specific issue in this regard was related to the question of linkages, e.g. 1. The complexity of the question of linkages due to a plurality of theories and ways of analyzing linkages; 2. The importance of linkages for a host country in order to benefit from the foreign investment; 3. The necessity of a minimum of local capabilities in order to promote positive effects.
The third session was organized on the basis of four papers; Andrew Sumner (Can we conceptually link Foreign Direct Investment and Capabilities Poverty? ), Jens Lehrmann Rasmussen (GOOD GUYS AND BAD GUYS. An analysis of modern TNC strategies and counterstrategies), Brigitte Hamm (Socially Responsible Investment (SRI) - an instrument to enhance development issues in TNCs´ activities), Soeren Jeppesen (Impact of TNCs: The role of government strategy and industrial policy). The empirical studies are still inconclusive regarding the impact of FDI on development and on the alleviation of poverty. The NGOs and labor unions play an important role in maximizing of the positive impact. Nevertheless an active government policy remains vital if developing countries, and especially the LDCs, are to commit to growth and the reduction of poverty, even if the possibilities of intervention have changed with globalization. The promotion of socially responsible practices may be a good tool to increase the positive impacts of FDIs in the economic field, but also in the social field.
Report: E. Rugraff ; M. Hansen.
