Question

“The growth of the global economy and individual nation’s economies is dependent upon FDI largely by MNEs. Regarding the nation that you are investigating this semester, analyze this nation’s business-friendly and/or prohibiting policies and that position’s influence over FDI for the last 5 years. Do you think they are successfully drawing the right kind of investment that makes the country more sustainable? Explain.

the nation is Portugal

Answer 1

As in most OECD member countries, FDI played a larger role in the portuguese economy over the 1980's and early 1990's. This has been particularly appearent for portuguese investment abroad, which increased from about 4 percent in 1991. Inward direct investment has also increased from 0.4 percent to 1 percent in 1990 and rising steeply to 2.8 percent in 1991, but from a low base and remains, except for the extraordinary year 1991, relatively modest by international standards. Around three quarters of portuguese outward direct investment has occured in the OECD area, and is traditionally directed to the manufacturing sectors. More recently, portuguese FDI has gone to the real estate sector in EC countries. Similarly, around 80 percent of inward FDI into portugal has come from EC and ECTA countries and appears to be directed to the manufaturing sectors, distribution and the finance sector.

Foreign direct investment in portugal as measured by FDI statistics has been modest, both in relation to out flows and to GDP. In nominal terms, FDI in portugal did grow some what during the decade from $0.3 billion in 1981 to around $2.2 billion in 1990. As a proportion of GDP portugal's inward direct investment remained fairly steady throughout the 1970's and 1980's. Although portugal's inward FDI / GDP ratio increased in the latter part of the countries with the exception of only japan, germany, italy, finland and canada. Similarly, inward direct investment also appears modest when examined in relation to outward FDI.