![[In This Economy] Here’s a new paper by UP economists on economic charter change](https://i.headtopics.com/images/2024/4/12/rapplerdotcom/in-this-economy-here-s-a-new-paper-by-up-economist-in-this-economy-here-s-a-new-paper-by-up-economist-176A4DCF95F5DDC237C6C8FC2490ACAC.webp)
Our paper aims to 'disabuse the public of the notion that any and all forms of FDIs will be good for national development and a net contribution to economic welfare and efficiency.' Politicians, take heed.
This is AI generated summarization, which may have errors. For context, always refer to the full article.
We started the paper with a discussion of the Foreign Direct Investment Restrictiveness Index developed by the Organisation for Economic Co-operation and Development . If this restrictiveness index is 0, a country is totally open to FDIs; if it’s 1, the country is totally closed.But some sectors in the Philippines are less restrictive than others. And other not-so-open sectors can be significantly liberalized by tweaking ordinary laws that affect these specific industries.
We took pains to scrutinize three economic studies often quoted in the congressional hearings of late. The takeaway is that existing studies consistently find that elements besides foreign equity restrictions could play a more significant role in attracting FDI than equity restrictions.3) We should pay more attention to the quality of FDIs, not just its quantity.
Because of this, economists are hard-put to conclusively say that FDIs per se cause economic growth to accelerate. In fact, more often than not, FDIs tend torather than enhance economic growth. The link between FDIs and economic growth may also be explained away by the fact that “the determinants of FDI happen to be the determinants of GDP growth.”
In sum, our paper aims to “disabuse the public of the notion that any and all forms of FDIs will be good for national development and a net contribution to economic welfare and efficiency.” Politicians, take heed. Let’s say economic charter change succeeds. This fact alone won’t automatically bring in a tsunami of foreign investments. It will take some time for lawmakers to approve laws that will liberalize specific sectors.
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