Asian Financial Crisis and Impacts of FDI
출판일 1999-01-01
연구원 홍성웅
1) With the financial crises in Asia, everyone has learned gradually the awesome power of the capital in the world of capitalism with no rival.
2) In the period of the rapid economic growth in Asia, FDI played an important role in providing extra capital for the insatiable thirst for the infrastructure development and expansion of industries in those countries. The rapid growths of some Asian countries have been, in part, sustained by the inflows of foreign capital. The rapid urbanization and concentration in the capital cities in Asia have been struggled with their urban sustainability with limited capital to invest in the urban infrastructure, housing, roads, water and the sewer systems.
3) The sustainability of cities and the environment are two double-edged knives. Cities can only be sustained by maintaining the economic viability for the present existence and for the future. On the other side, the over concentration of people and industrial activities, beyond the holding capacity, is destructive for the sustainability of cities.
4) The environment is another double-edged knife. On the one end, there is natural environment, diversity and recourses for the current and future generations. There is also man-made environment. The cities in Asia and other industrializing countries need the facility investment for the water, sewage, and road networks. If the source of the investment is not from the domestic saving, it should be from the overseas saving.
5) Under the financial crises, some of the Asian countries also discovered the dangers of ebbs and flows of the hot money in the portfolio investments, which rolled like "a can on the deck in the storm". As in the rapid growth period in Asian countries, the FDI seems to be a stable source of rescue for some of the Asian countries gasping for the debt service and foreign exchange crisis. However, people in those countries are now gradually aware of the fact that the FDI or portfolio investment will come and go under the rule of global capital market. It does not come to rescue. It will come at its will.
6) Some of the resource developments are unavoidable to sustain the world population under given technologies. The development can be sourced from domestic or overseas capital. Is the inbound FDI more polluting than domestic industries? Not necessarily. The affiliates of inbound FDI should share the competitive advantage of the host country. Thus the types FDI project could be the very industry which enjoy the competitive advantage in the host country. However, under the crisis, such as IMF bail out, the Asian host country may be forced to take more polluting inbound FDI than the society would choose. This is the point where prudent policy decision required. Important criteria, here, is the difference in the assessed value of the environment in different countries are weighed in the global scheme of economic decision making. The participants on this decision are the TNCs, the public in the host and source countries. They collectively make their decision on the FDI, their location, and economic and environmental sustainability of the cities.
(비매품)
2) In the period of the rapid economic growth in Asia, FDI played an important role in providing extra capital for the insatiable thirst for the infrastructure development and expansion of industries in those countries. The rapid growths of some Asian countries have been, in part, sustained by the inflows of foreign capital. The rapid urbanization and concentration in the capital cities in Asia have been struggled with their urban sustainability with limited capital to invest in the urban infrastructure, housing, roads, water and the sewer systems.
3) The sustainability of cities and the environment are two double-edged knives. Cities can only be sustained by maintaining the economic viability for the present existence and for the future. On the other side, the over concentration of people and industrial activities, beyond the holding capacity, is destructive for the sustainability of cities.
4) The environment is another double-edged knife. On the one end, there is natural environment, diversity and recourses for the current and future generations. There is also man-made environment. The cities in Asia and other industrializing countries need the facility investment for the water, sewage, and road networks. If the source of the investment is not from the domestic saving, it should be from the overseas saving.
5) Under the financial crises, some of the Asian countries also discovered the dangers of ebbs and flows of the hot money in the portfolio investments, which rolled like "a can on the deck in the storm". As in the rapid growth period in Asian countries, the FDI seems to be a stable source of rescue for some of the Asian countries gasping for the debt service and foreign exchange crisis. However, people in those countries are now gradually aware of the fact that the FDI or portfolio investment will come and go under the rule of global capital market. It does not come to rescue. It will come at its will.
6) Some of the resource developments are unavoidable to sustain the world population under given technologies. The development can be sourced from domestic or overseas capital. Is the inbound FDI more polluting than domestic industries? Not necessarily. The affiliates of inbound FDI should share the competitive advantage of the host country. Thus the types FDI project could be the very industry which enjoy the competitive advantage in the host country. However, under the crisis, such as IMF bail out, the Asian host country may be forced to take more polluting inbound FDI than the society would choose. This is the point where prudent policy decision required. Important criteria, here, is the difference in the assessed value of the environment in different countries are weighed in the global scheme of economic decision making. The participants on this decision are the TNCs, the public in the host and source countries. They collectively make their decision on the FDI, their location, and economic and environmental sustainability of the cities.
(비매품)