Blog post 2

FDI what is it good for? Absolutely nothing? FDI is a confusing thing because it carries with its assumptions and structures which some perceive as equalizing and liberating, whereas others perceive it as destructive and exploitative. As someone who is typically critical of MNCs it is hard for me to imagine FDI as an inherently positive force. Examples of FDI and austerity as pursued by the IMF and world bank hurting third world countries are visible many places. In Jamaica and India, the destruction of the ISI programs, and state protectionist programs and being replaced by FDI, while increasing GDP, has been increasing exploitation of the land and the population. Yet this cannot be said to be FDI’s fault, but rather the fault of the broader liberal and neo-liberal regime which uses FDI as a tool to seemingly undermine state sovereignty. But if this structure and regime is already pre-established, is FDI the actual issue, or is FDI and MNC involvement in the third world a necessary evil as Susan Strange might put it. Susan Strange, a Marxist IR theorist, argues that while FDI and MNC exploitation of the global south is deeply destructive and harmful, yet she pessimistically believes it is currently a necessary evil within the overall immobile capitalist structure. For Susan Strange and Marxist like her, FDI and MNCs provide the base capital and investment to kick start development in the developing world, and therefore through FDI countries and people become less exploited—after they are initially greatly exploited. This argument actually sounds less Marxist than liberal, because rather than attempting to change the world—which is Marx’s main goal—Susan Strange admits defeat in the face capitalism and decides the only way to improve the conditions of the poorest, is for them to be exploited even more. Yet does FDI actually improve the conditions of the global south or decrease them? These questions can’t actually be answered by me, but again I feel that when FDI is used as a way in which to remove more state-centered policies, one allows the global capitalist regime to implement austerity and market-centered policies. This removal of the state power, through state power such as trade treaties and global IO’s, the implementation of FDI—while perhaps not directly negatively affecting the material conditions of the working power—erodes the states capacity to regulate MNCs and capital. As such while FDI may not have a directly negative impact, it may in fact indirectly hurt workers by disempowering the governments which may have protected the workers.

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