Custom FDI in Poland Essay Paper Sample
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Today I was in a meeting at International Corporate Finance Class where some members presented an article that is worth noting. The article numbered 07 had a title “FDI in Poland.”The main idea that the group derived from the article is that foreign direct investment is a major factor that contributes towards the growth of an economy. I learnt from the ground that Poland had one of the worst economies in Eastern Europe. When the government paved way for FDI, the economy grew tremendously and currently, many nations are emulating Poland. Surely, the success of a foreign direct investment relies on government’s intervention.
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I’ll try to summarize the presentation as given by the members since you chose me to represent you in the meeting. First, the group pointed that FDI requires a stable and safe economy. A country must be able to maintain peace within its boundaries and also be in a position to pay external debts in time for it to promote foreign investments. Therefore, it is important that we should always examine the kinds of laws and procedures laid down regarding foreign investors in a given country. Secondly, the presentation highlighted that the investors can benefit greatly when the economy of a particular nation grows. For instance, the economy of Poland has been developing persistently as it welcomes more and moe foreign direct investors. Moreover, the government of Poland is known for effectively working hand in hand with the economy. For example, the government has consistently provided substantial incentives such as banning tariffs and improving infrastructures. As a result, many investors have been attracted to Poland.
It is advisable that before we venture into any economy, we ought to analyze the policies employed by the government and the political situation of that country. We should go for economies that are reliable and can support foreign direct investment activities. I believe that an economy with favorable legal policies for business is a good one for foreign direct investment.
I attended a presentation forum yesterday, 4/2/2012, organized by the International Corporate Finance. There is a group that presented an article which really caught my attention. The article was titled “Limitations of FDI in Poland”. It was article number 28.The main point articulated in the article was that foreign direct investment has caused negative balance of payments in Poland. It is true that incentives offered by the government to foreign investors may increase the rate of production. However, the behavior of some investors may end up affecting the economy of a nation. Therefore, investors ought to strictly adhere to the stipulated rules andd regulations of conducting a business.
The presentation indicated that exemption of taxes on foreign investments and availability of natural resources can help reduce production costs. This leads to increased goods for exports and no low importation of raw materials which promotes favorable balance of payment. Nevertheless, foreign investors yearn to make a lot of profits by increasing their volume of production. Thus, they intensify the importation of equipment and production inputs in order to increase their exports. Consequently, there have been an increased exports and imports in the economy of Poland leading to the decline in trade balance.
Furthermore, the presentation also mentioned that occasionally the foreign investors suffer great losses when they produce goods and nobody buys. Therefore, they are forced to invest in the production of goods that are relatively cheap which earns them substantial profit. Sometimes, the persistent low purchasing power makes them to withdraw from the market.
Before we make a move of investing in any economy, we should know the taste and preferences of the available customers and decide the kind of business to venture in. As a matter of fact, we ought to utilize the incentives offered by governments that support FDI in order to help them improve their economy.