The regulation of foreign direct investment towards economic development

Abstract

The dream of every least developed country is to one day reach the standard of the more developed Countries and also be considered a developed country. In order to reach this level of development which includes infrastructure changes and improvement in the well being of the population, these developing countries need capital for them to finance such projects-Developing countries have found a panacea in Foreign Direct Investment FDI in that there is a high likelihood that returns will be huge dependant on the resources in that country. In order to attract this FDI, most developing countries engage in a massive incentive exercise which involves enticing foreign investors to make their investment in these developing countries. This paper considers the impact of FDI and whether or not it does indeed promote economic development. In this regard, the paper looks at the Zambia Development Agency Act and other statutes providing for incentives especially under the mining sector. The paper further considers whether the regulatory mechanisms in existence at present are to the benefit or detriment of the country. It is the recommendation of this paper that there should be laws in place that ensure economic development in the country including other measures such as protection of workers welfare and stronger linkages between foreign firms and the local industry.