He added that foreign investment is one of channels or external sources of financing economic and service activities or projects of in other countries. Economically known, that there are channels or several sources of external financing for the economic and service activities and projects in different countries. They include investment, aid, private and official loans "external debt", all of which are remittances or financial flows entering the country and they differ in terms, nature, burdens and benefits to the country.
He continued: "However, the most important characteristic of foreign investment, compared to other financing sources, is that it does not burden the beneficiary country with debts. The financial flows in the form of foreign investment do not constitute a debt to that country as the case for foreign loans. They are not combined to any political commitments as is the case for some grants and foreign aids.
He explained: in fact, there are two types of foreign investment: the foreign direct investment and Foreign Indirect Investment. The difference between the two is that the first is a real, long-term investment in the productive and service sectors of the national economy, like industry, agriculture, energy, tourism, communications and others. The second type, the indirect foreign investment, is concentrated in the financial markets where foreign bodies, individuals and companies, own the shares and stocks, private or governmental and circulate them o achieve profit.
He said: it is noted that some of the international financial institutions consider the investment indirect in the case it possesses of the proportion of less than 10% of the shares in the financial market, which is a matter of debate, as the ratio does not constitute an essential criterion in the classification between direct and indirect. Usually, the standard of a certain field, sector or activity where remittances or external financial flows are used, is taken into consideration.
He continued: "What concerns us in Iraq is the research in the benefits of foreign direct investment, and concentrate at its benefits as an external funding source for economic and service projects in the framework of the national development strategy and its priorities. The truth is that the benefits of foreign direct investment are clear and of significant importance for the remarkable development experiences in many countries such as China, India, Malaysia, Mexico and Brazil and other countries in the world, in all continents. They are the acquisition of modern technologies, the fight against unemployment (creating job opportunities), the development and diversification of exports and the variation of the productive base of the national economy and others. This is what Iraq needs, more than ever, in the framework of his policies and orientations to reform and diversify the economy, reconstruction, tackling the problem of unemployment and improve the quality of services and expand them. It is an urgent necessity imposed by the significant lack of internal financial resources, compared to the high estimated cost to achieve these programs and projects.
He said: that foreign direct investment is today the focus of fierce international competition, where countries compete to earn foreign investments by providing incentives, exemptions and inducements designed to achieve that goal. Countries from both sides of the world, developed and the developing are engaged in the task. It is noted that China, in the framework of its new economic policy, has been successful in attracting the highest proportion of foreign investments, without compromising its interests and national sovereignty, which is a remarkable phenomenon and worthy of study and follow-up on our part. It also has a very useful intellectual and economic significance for the debate aroused currently on the law of investment in Iraq and the fears that it may cause for national sovereignty, in the eyes of some.(Source)AlBayan
