Role of Foreign Direct Investment in Telecommunication Industries: A Developing Countries’ Perspective

Abstract

During the past few decades, foreign investment has rapidly increased worldwide and has enhanced economic growth in developing countries. Although foreign investment brings huge economic benefits, many developing countries fear that by opening up markets to competition and foreign investment without restriction, they will lose control of their strategic industries. Among those industries, telecommunications is a sector with substantial impact and influence on national security, social stability and economic development. Therefore, the balance between economic gains from foreign investment and national telecommunications sovereignty presents a challenging task. Is foreign investment a necessary mechanism for developing countries to promote their economic growth? With different developmental models and a myriad of different economic difficulties, is current foreign direct investment on telecommunications suitable to meet the different demands for developing countries? This article will examine current international investment regime and their relation with telecommunications as an influence in developing countires. Assessing these crtitical issues, this article hopes to find a new poisition for telecommunications in a formingly integrated global market.