Documents on Mexican Politics.

    Sources of Investment & their dynemics

  By Manmohan Sinha


  Sources of Investment and their chemistry:

  Even though Investment is no guarantee of economic progress,
  no economic progress can take place without investment of
  money, labor or ideas. Investment is a precondition for
  economic progress. If investment no guide to economic
  progress and yet Investment is a precondition for progress,
  than real key to economic progress can not be in the act of
  investment but rather in who is making the investment and
  where investment is being made.

  We know by now that investment by state does not lead to
  economic progress. That means that source of investment is
  the major determinant of whether investment will yield
  progress or not. So when our politicians tout investment as
  a economic penicillin without telling you what each source
  of investment brings on the economic table, it amounts to
  hoodwinking the public. There are certain sources of
  investment that do not bring economic progress. Period.
  There are certain sources of investment that might yield
  dubious economic gains but might inhibit the political,
  social or cultural growth or sovereignty of nation. Some
  sources of investment might imperil the social harmony by
  creating sharp inequities. Some sources of investment might
  impair the cultural and political identity and sovereignty
  of nation. Such wide mix of consequences produced by act of
  investment and different sources of investment establishes
  the cardinal truth that act of investment can not be judged
  on its own, sources of investment can not be judged by its
  mere economic value, economic progress can not be judged on
  its own. Period. Man and nations do not live by bread alone.
  No doubt, meeting the economic necessity of nation should be
  a top first priority of nation. But nation's priority can
  not end just there and other equally pressing national and
  people's needs can not be held hostage to a fixation with
  material progress. Nation has to provide for people's
  cultural and spiritual growth too. Any economic theory that
  either does not let you meet the economic needs of nation
  has to be shunned no doubt. Any economic theory that does
  not allow nation to go beyond the stage of catering to the
  economic needs has to be shunned at all cost also. This
  caution is added because certain sources of investments come
  with embedded economic theories of their own. So when a
  nation invites investment from such sources, nation is also
  unwittingly inviting and implementing larger economic
  theories which have definite consequences that are hard to
  get rid of later. That is why critical look at different
  sources of investment and their chemistry should be
  undertaken in order to avoid falling in the trap of
  unnecessary sources of investment and economic theories.
  Enlightened and educated nations would be in better position
  to pick and choose a healthy mix of investment sources and
  put in place a system of checks on unwelcome sources of
  investments and economic theories to meet the specific needs
  presented by each nations.

  Broadly speaking, there are 7 sources of investment:
  (1) Investment by Individuals
 By individuals, families, friends, relatives, non-
  corporate entities.
  (2) Investment by Domestic corporate sector  
  (3) Investment by Domestic Government
  (4) Investment By International Agencies
  (5) Investment by Non-resident citizens
  (6) Investment for Foreign Private sector
 By foreign citizens, foreign corporations and financial
  (7) Investment by Foreign Government

  Each source of investment brings different dimension to
  economic and political arena.

  (1) Investment by Domestic Private citizens:

  As private individual does not spend his resources without
  expectation of some return, the productivity of investment
  is guaranteed. It eliminates wastefulness. Since this kind
  of investment eliminates intermediaries, a direct link is
  established between individuals, investment, productivity
  and economic rewards. And people are not restrained by
  restrictive definitions of investment. It allows people to
  consider not only money as investment but also land, skills,
  ideas, labor, contacts, and almost anything. Thus it brings
  about revolution in scope of investment, entrepreneurship
  and wealth creation. All without the help of state,
  politicians, ideologies, political parties, financial
  institutions and anybody else. Thus, not only economic
  progress is guaranteed but the fruits of economic progress
  also go directly to the people in direct proportion to their
  investment without the artificial need for political and
  corrupt and wasteful schemes of supervision, administration,
  political intervention, controls and redistribution. It
  assures that wealth goes directly to the people and only to
  those who had directly produced it. It ensures that there is
  no misappropriation, robbing, transfer of wealth among
  people within nation. The wealth of nation remains within
  nation and with the citizens of nation. There is no wealth
  transfer to the outside nations, no exploitation and robbing
  by the outside nations. When people within nation can not
  get to rob other people's wealth using state, it gives no
  scope to the foreigners to rob the nation using
  international schemes. People become their own destiny-
  makers, nations become their own destiny makers.

  It should the goal of every nation and its political process
  to bring about such economic reality. Nations can uses other
  sources of investment in the interim only to reinforce,
  supplement in order to bring about the such economic reality
  as a goal. Merit of any economic policy, economic theory,
  economic measure and source of investment has to be judged
  by how much it facilitate and brings about such economic

  (2) Investment by corporate sector:

  Investment by corporate sector makes large-scale economic
  activity possible. It brings unmatched efficiency and
  productivity to investment. It brings collectivism in
  economic arena which could undertake things that non-
  coporate sector can not. Use of innovation in technology,
  administration, financial tools can make it a formidable
  tool for economic progress. Inherent motive of profit and
  direct rewards gives it vitality and viability. It simply
  does not reward inefficiency, wastefulness and failures.
  However, if it has so many economic strengths, what it
  brings to the non-economic arena can make it only a mixed

  First of all, corporate sector brings collectivism instead
  of individualism. Thus it demotes individuals and family
  over a fluid collective. Thus fair distribution of wealth
  and economic prosperity to people become big politicized
  issue on which seedy ideologies and politicians make
  rewarding careers. Corpocracy also demotes man. It gives
  primacy to capital, efficiency, profit and subordinates man.
  Thus issue of exploitation, disposability of man,
  interchangability with another man or inert technology and
  techniques gain strength under corpocracy. Man is thus
  marginalised, subordinated and exploited and kept numb with
  bribery of hedonism, lifestyles which are by the way
  available not to all but only to those who strengthen
  corpocracy. The division of labor make man vulnerable.
  Division of knowledge make man ignorant. Division of
  ownership disenfranchises man and make him helpless. Yet
  corpocracy thrives on such division of labor, division of
  knowledge, division of ownership. The corpocracy is also
  expansionist. It seeks to expand commercialization and
  conversion of nature into commercial enterprise. It can not
  be chained within boundaries of either basic necessity or
  geographic/demographic entity of nation. The goal of
  corpocracy is not to maximize employment and distribution of
  wealth but to minimize payroll and maximization of
  concentration of economic power and wealth. The employment
  stability or growth is not the inherent need or goal of
  corpocracy but rather a function of expansion of
  commercialization and market share.

  The capital formation of private sector depends on wealth
  distribution, entrepreneurial climate, savings rate which
  are seldom evenly distributed in any society and it is more
  so under corpocracy. Thus, means of production are not
  available to all but only few under the corpocracy. The few
  would control the economy while rest have to toil for those
  few rich. It is thus a complete antithesis of investment by
  individuals. Uneven distribution of wealth and restrictive
  definition of investment exercises control over means of
  production and consequent rewards from economic progress.
  This is an inherent flaw of trade and investment based
  economic model. It produces 3 classes at national level and
  3 worlds at global level. But since alternative economic
  models that pre-empt or substitute trade, investment,
  property rights in favor of self-sufficiency are too radical
  and too far removed from ground realities, they are neither
  economically nor political viable forces and hence nation
  must focus on working within the least damaging framework of
  economic model based on trade, investment and property
  rights. We have no choice but to accept that no matter what
  be the source of investment, it will always produce
  disparities and classes. Any attempt to abolish classes or
  to equalize them through state and state-sponsored
  ideologies have failed and multiplied problems. Nations have
  no choice but to manage the antithesis represented by
  investment by non-corporate private sector and investment by
  corporate sector. Nation has to produce economic progress by
  creating realities that compliment each other rather than
  allowing corporate sector to create a negation of non-
  corporate sector. There are things that corporate sector can
  do well. But corporate sector must not be allowed to gain
  upper hand or free rein as it is inherently expansionist,
  market-state and dominion conscious and subjugative.

  Nation has to manage the economy though private sector made
  up of corporate and non-corporate enterprises. However
  unevenly progress and wealth might be produced and
  distributed among people, but they still remain inside
  nation, they are still part and parcel of nation. Goal of
  nation's economic policy has to be to expand the overall
  progress and wealth of nation and worry only secondarily
  that every person is able to participate in the production
  of wealth. Nation must not worry that wealth is not
  distributed evenly or fairly among people. If that is the
  national priority, than it must honestly do the needful to
  discard the trade and investment based economic models
  altogether and adopt alternatives rooted in decentralized
  self-sufficiencies. Best that nation can do under the trade
  and investment based economic model is to ensure that
  everybody is able to participate in the creation of wealth
  and not distribution of wealth.

  (3) Investment by Domestic Government:

  There is no reason for government to enter into business of
  business. It might have a stake in overseeing the nation's
  economy but that oversight can not justify usurpation of
  economic power in its own hands. Government is known to
  expand its role, perpetuate conditions to perpetuate its
  role. A government that centralizes all political power as
  well as economic power can become tyrant. In an
  underdeveloped country where private sector is still
  emerging, where capital and skill-formation is slow and
  lacking, where nation has no experience with trade and
  investment based economic model, state might be tempted to
  directly enter into business of producing GNP. It might even
  proclaim that it is merely jump-starting the economy. The
  infrastructure, literacy, energy, communication,
  transportation, defence etc can not be left to private
  sector initiative as nation have direct and immediate stake
  in their growth and control. Thus, state enters into
  investment business with all the good intentions and good
  sense. However political process that guides the state and
  political parties that guide the political process are all
  expansionist, hegemonistic, exclusionary institutions. They
  would love to gain control over the bread of nation and pick
  winners and losers for political considerations. Thus when
  economic power is handed over to state, it attracts those
  who would like to play politics with it and hold the nation
  hostage. They would keep economic power hostage and release
  is it only in exchange for usurpation of powers from people.
  thus state would attract power-hungry, corrupt,
  unaccountable brokers, intermediaries and politicians. State
  would not be able to resist ideologies like socialism and
  communism whose primary mission is not economic empowerment
  of nation but de-construction of social, cultural and
  religious spheres; who distrust historical and traditional
  institutions; who distrust individual, people, nation and
  private property, private ownership. Thus, economic goals of
  state become tangled with ideological and political agenda
  and corrupt process. State under such spell acquires
  suspicion about people, private sector, decentralization.
  Investment and economic decisions ans economic activities
  that are no longer governed by pure principles of economics,
  productivity, market forces can not but fail to deliver
  economic progress. This is what most nations guided by
  socialism and communism are finding out. They attest to the
  truth that investment by state impoverishes nation. the only
  people who benefit and get empowered are politicians, cheer
  leaders in media, politicians-cum-businessmen, political
  parties, power brokers, political parties with welfare and
  empowerment agenda, fake liberation ideologies and statism.

  Thus, investment by state represents the complete antithesis
  of investment by private sector. Nation has to produce
  economic progress by creating realities that compliment each
  other rather than allowing Public sector to create a
  negation of private sector. There are things that Public
  sector can do well (e.g defence, nuclear, space, energy,
  communication). But Public sector must not be allowed to
  gain upper hand or free rein as it is inherently
  inefficient, political, wealth-negating.

  Nation must not resort to investment by state for economic
  progress. It must do so only for defence and other national
  security areas. But for economic progress, it must empower
  private sector and particularly non-corporate sector. The
  key world is economic decentralization and not economic
  centralization in corpocracy or economic centralization in
  state or economic centralization in global order where
  nation is mere atomized and marginalised entity. The watch
  ward is domestic decentralization, domestic liberalization
  and domestic privatization. No more economic progress by
  remote control. Unless every citizen is allowed to be become
  a producer, an economic entity, people can nor have economic
  progress and nation can not progress. Period. The reason
  word domestic is so critical is because dire straits of
  private sector and government sector would otherwise invite
  global international ambitious sharks who would pounce on
  the nation in its weakest moment for eating up the nation
  alive. These sharks will come up with fake promises of fake
  utopia and self-serving economic paradigms and bribe their
  way inside the nation to peril the very existence of
  nationhood and independence. And more importantly, the same
  politicians who put the nation on such economic paralysis
  will try to rescue their political careers and ensure their
  lucrative hegemony by selling the nation to the
  international sharks for short-term gains.

  (4) Investment by International agencies:

  Many nations that followed the economic policies of
  promoting investment by corporate sector as a substitute for
  investment by non-corporate sector, investment by government
  as substitute for investment by private sector, such nations
  found their economic policies going nowhere without the
  outside reinforcement from international agencies.
  International agencies stepped in and reinforced such
  defective policies which were never not working for good
  reasons. Such nations, instead of discarding wrong-headed
  policies, got trapped in their policies as international
  agencies reinforced them. So in a way, these nations got
  trapped by the international agencies. Their policies would
  not succeed without IMF reinforcement.

  Even though International agencies are not fiefdoms of any
  single nation, G-7 nations collectively drive the policies
  and strategies of such agencies. G-7 nations are not doing
  this for charity. They have their macro-level and geo-
  political objectives in investing in other countries through
  IMF/WB. Operations of IMF/WB are not neutral but rooted in
  specific ideologies, specific economic theories, specific
  political and economic needs of their patron nations. IMF/WB
  merely carries out the mandate produced by the domestic
  needs of G-7 nations and not the borrower nations. IMF/WB
  policies are formulated to serve the domestic political,
  ideological, geo-political and economic needs of G-7
  nations. Period. IMF/WB are accountable to the political
  process of G-7 nations and not the borrowing nations. G-7
  nations carry out their economic engineerings and designs on
  other nations through such international bodies. It allows
  them to side-step their own political apparatus and help
  them accomplish their goals though such international
  bodies. So when nations depend on such agencies for
  investment, they are really allowing their economies to be
  macro-managed and channeled into directions that primarily
  benefit the patron nations of such agencies.

  All the nations who have traditionally depended on IMF/WB
  are in the worst economic state. Why? If investment from
  IMF/WB were so good and if the remedies and conditionalities
  imposed by them were so good, than these nations should be
  on their feet by now and not on the life-long life-support
  of IMF/WB. For every failure of previous IMF mandated
  policies, IMF/WB will blame the next set of hurdles that
  they want to clear. For every crisis created by past
  blunders, IMF/WB will give you more rescue loans with even
  more conditionalities that perform even more macro-
  management of your nation until finally IMF/WB takes over
  the complete policy-making function of nation. What IMF/WB
  have been doing all along is to wipe out the nation's
  vitality and to hook the nation on artificial life support
  system that only international agencies can sustain. So much
  so that even national budgets get prepared by IMF/WB. So
  IMF/WB do not stop at just micro-management, they begin to
  micro-manage the economy also. They begin to manage the
  political process also. They do not just want to formulate
  policies, they want to oversee the implementation also.
  Their investments comes with two sets of conditionalities.
  The other one is kept secret. The risky and highly sensitive
  conditionalities are kept secret to avoid political fall
  out. (IMF privately admits that it imposes secret
  conditionalities to avoid political risks) Now if these
  people were do-gooders for the economy and nation, then they
  certainly do not need to fear or hide from political process
  of nation. It gives credence that these agencies conspire
  against the borrower nations to wreck their economies and
  political process. All this to achieve ideological, geo-
  political and economic interests of G-7 nations. We know
  that any investment that is not guided by purely economic
  reason is bound to result in lack of progress. Predictably,
  all the nations that have depended on IMF/WB in the past are
  in mess. They have nowhere to go but to allow patron nations
  of IMF/WB to invade and capture their economies. Investment
  of G-7 nations in IMF/WB have paid off.

  Investment from IMF/WB is risky, a slippery slope of
  crisis, more bail-outs and more dependence on foreign dole.
  Nations fail to recognize that they are being macro-managed
  and steady strings of crisis are produced as a result of the
  deliberate macro-management. At the first sign of any
  trouble in nation, these agencies toughen their
  conditionalities in stead of correcting their macro-
  management. So international agencies can engineer crisis on
  a nation and in stead of being held accountable, they can
  turn it around for even tighter noose on the nation. 'Bail-
  out' with even more strings attached!

  As soon as nation steps out of its boundary for help, it
  will find that nobody is running charities anywhere and that
  everything comes with a political cost. Heavy costs. Long-
  term costs. If goal of national rulers is to help the
  nation, they must avoid international agencies. Solve
  national problems within nation with national resources.
  Live within your means. And if that keeps you poor, change
  the rulers or change the economic model or learn to live
  with it.

  (5) Investment by Non-resident citizens:

  Unlike any other foreign source of investment, investment by
  nationals abroad comes with no-strings attached. Bitten by
  conditionalities and strings of international agencies, many
  nations have found this easy sources to be a life-saver.
  Successful non-resident citizens abroad can transfer
  valuable wealth, skills, technology, know-how and experience
  back to nation at no cost to nation. Unlike foreign
  citizens, national citizens abroad do have roots in their
  homeland even if their loyalty and allegiance can not be
  vouched by any certainty. Some of them do get alienated from
  nation and nation's needs and priorities, nation's self-
  interests. So investment from Non-resident citizens can
  bring in an element of risk for the nation and perhaps a
  slippery slope. Many Non residents hold composite marriages
  and composite citizenships and composite loyalties. That is
  husband and wife and children holding different
  citizenships, different national orientation, and different
  allegiance to different nations. Thus Investment by Non-
  residents paves the way for investment by foreign citizens
  who intern can bring in all kind of foreign institutions to
  enter into domestic economy. Thus, any National need for
  investment from non-resident should be a signal that
  nation's economy is in trouble and is about to get into even
  larger trouble. Unlike investment by any other foreign
  sources, nation would prefer to have investment from its non
  resident citizens as there are no overt and direct strings
  attached. However an economy that is so desperate that it
  needs to depend on outside investments can not just stop
  with investment from Non Resident citizens alone. For, it is
  a sign that economy is structurally unsound and no amount of
  investments can the solve the problems unless structural and
  ideological defects are removed.

  This source of investment stands in between domestic
  investment and foreign investment. As we have established
  that domestic investment is the key for progress and as we
  will see later that foreign investment is the complete
  antithesis of domestic investment, Investment by Non-
  resident citizens represents a bridge that links the two. It
  paves the way for foreign investment to enter the nation.

  The very existence of Non-residents citizens is a sign that
  says nation is unable to meet the needs of its citizens and
  hence exports them. The very need for investment from non-
  resident citizens is a sign that says that nation's economic
  policy is on a wrong footing and that policy-makers are
  trying to cover up the defects by pumping money from
  anywhere they can lay their hands on with out regards to any

  At the first sight of trouble in the nation, these source of
  investment will be the first to flee the nation. Their
  investments are fair weather friends. They come to the
  nation not only out national concerns but only to help
  themselves, their remaining family members in the nation or
  to their friends. Nation can not build any sound or lasting
  economic policies based on such source of investment. They
  can be resorted to only in times of sever crisis but not for
  normal functioning of nation's economy.

  (6) Investment by Foreign nationals:

  Unlike international agencies, this source comes with no
  conditionalities and unlike non-resident citizens, this
  source is not limited. In fact, this source comes with bribe
  of latest and greatest. It is too eager to come to you. Only
  if you remove regulatory maze and provide security, this
  source will willing to flood your country with investment
  and goodies. Nations, that are following such bankrupt
  Economic policies that they need all the investments of the
  world to satisfy its national needs, have to finally come to
  this source that is known for its unlimitedness. So
  unlimited need for investment by a nation meets unlimited
  reservoir of investment.

  This source of investment comes to explore new markets, new
  sources of raw material, wage differentials, cost
  differentials, difference in regulatory and tax climate. Thy
  come for new avenues of profit, savings and wealth for
  themselves. In capitalism, nothing happens without such
  motives. Industries are in search for greener pastures,
  newer and untapped markets, commercially unexplored nations.
  Once a given market is commercially saturated, they have to
  move on in search of another untapped market. Industries
  have to maintain profits, employee base year after year, so
  they must constantly acquire fresh markets. Market has
  become a presiding deity for market-seekers and market-
  providers. All of a sudden nation has ceased to be nation.
  It has become a 'market'. Until yesterday, these used to be
  called 'third world', 'poor nation', 'under-developed
  nation', 'developing nation'. Now all of a sudden such
  nations have became 'emerging market', 'underserved market'.
  The transformation of nations to market is amazing.

  Even tough investments and location of economic operations
  are done in market-nation, they are done as an extension of
  economic activity back at home. Thus, this kind of economic
  activity links two economies in which investor country
  acquires ownership interests in the weak market-nation.
  Since fruits of economic activity goes to owner, economic
  progress achieved by such investment goes to foreign nation.
  Consumerism and job-creation goes to market-nation and
  wealth-creation goes to foreign nation. Job-creation does
  not add wealth to the nation as it as neutralized by
  consumerism that transfer wealth to foreign nations. Any
  growth in purchasing power is spent right back on foreign
  goods to give all gains back to foreign nations. Foreign
  Investment does not come alone to market-nation, it joins
  the large company of market-seeking goods and services to
  tap the existing and newly created wealth of nation. Once
  foreign nations become dependent on prosperity at home from
  wealth transfer from abroad, foreign states begin to look at
  such common-wealth/market as sustainer of their tax-base and
  welfare state at home. As market-nations lose their wealth
  and capital formation over consumerism, and become dependent
  on foreign investment for sustaining their life-styles and
  job base, they can not get rid of their dependency on
  foreign investment. In the mean while, foreign investment
  sucks the wealth out of the country and at the same time
  acquire hegemonistic ownership interests in market-nation's
  economy. Foreign nations begin to take active interests in
  political process of such market-state to safe-guard their
  ownership and economic security interests. Prosperity
  brought home by investment abroad   allow foreign nations to
  offer tax-cuts and wage-hikes. So much of domestic
  prosperity, domestic statism, domestic employment base,
  domestic wage scales, domestic taxation, fitness of
  corporate sector come to depend on wealth transfer from
  foreign market-nations that foreign states can not remain
  helpless spectators about internal affairs and internal
  political process of the market-nations.

  Growing encroachment of foreigners on nation can produce
  strong nationalistic and patriotic counter-force. Thus
  political situation becomes very vulnerable inside such
  market-nations. It puts the ruling elites very vulnerable.
  On the one hand, nationalist challenges make their political
  life miserable, while at the same time loss of policy-making
  an political sovereignty of nation make them stealthy and
  defensive. They sustain their power only at the mercy of
  foreign help. In exchange for helping them retain the rule
  over nation, foreign interests extract all kinds of self-
  serving and one-sided treaties from such puppet rulers.
  Foreign interests acquire king-maker powers. They can
  overthrow rulers that stand in their way and install rulers
  that do their bidding. Anybody who neutralizes the native
  patriotic forces is given highest priority and support.
  Thus, market nations lose control over its nation-state.

  This is how political instability is created by entry of
  foreign investment. Another trait of foreign investment is
  that it flees at the first sign of political trouble of
  their lobbyists. As long as 'economic reformer' are crushing
  the opponents, foreign investors feel safe and no amount of
  political turmoil can bother them. But should even a small
  political setback is received by its allies in politics,
  foreign investment begin to flee leaving a total chaos in
  the nation. Draconian policy changes imposed by foreign
  investors in order to make the economy suitable for them
  also unleash its set of political instability. Financial
  crisis, inflation crisis, devaluation, collapse of currency,
  stock-market collapse can trigger troublesome times for all.
  Each bailout bring about more conditionalities and
  stringencies taking the flexibility of everybody. Because of
  vulnerability faced by foreign investment, foreign
  government have to acquire direct stake in the political
  process of the market-nation. It can take several form.
  Either trigger war with neighbor, helping hand given to
  separatist movement, demonization of nation's history and
  culture, trade sanctions and embargo, military blockade,
  arms twisting on sovereignty negating treaties, organized
  international terror though global agencies etc.

  If a nation wants to become part of another nation's
  economy, another nation's politics or wants to lose its
  identity by becoming common wealth and property of rest of
  the world, go ahead and commit national suicide. But if the
  goals is to benefit nation, you can not be anywhere near
  here. The fact that nation is swimming near this territory
  implies that rulers of such nations have doomed the nation
  and nation can not do anything about it. If you have come
  this far, sorry but you can not afford to remain as a nation
  much less an independent one.

  Tactical use of some foreign technology, some industry,
  temporary foreign help to overcome temporary phase might be
  ok. But to make a necessity out of it and make it integral
  part of economic policy is plain suicide. Nation can not
  gain progress from this source. You can lose the nation
  using this source of investment. You can get stuck with job
  and a lifestyle in exchange for nation and independence.
  Foreign investment can create a short-term illusion of
  prosperity, job growth, foreign exchange growth, export-
  import growth, flood of quality goods and services, latest
  technology and flourishing life-styles while losing
  everything else. people begin to wake up only when even
  these short-term bribes  begin to disappear. Unlike wealth,
  nation, sovereignty, independence, freedom, these things are
  not automatically transferable from one generations to
  another. Every body has to bargain and earn them year after
  year and generation after generation. One nation loses its
  bargaining power, all the goodies of globalism begin to
  evaporate. Road to hell is paved with such policies.

  (7) Investment by Foreign state:

  This is the final act in a long road to dependence on
  foreign sources of investment. It completes the antithesis
  of investment by domestic sources. Since domestic investment
  and foreign investment are complete antithesis of each
  other, they bring about opposite consequences.

  When a foreign nation's prosperity, wage scale, cost of
  living, standard of living, job base, tax-base, political
  balance depend on getting wealth from other nations through
  free-trade, the state and its political process can not sit
  by idle. It has to regard any likely disturbance in wealth
  transfer as national crisis and national security issue.
  Unlike private foreign investors, foreign state does not run
  away at the first sign of rouble in market-nation. In stead,
  at the first sign of trouble, it rushes to the market-nation
  to intervene politically, diplomatically, economically,
  militarily in order to set things right. Rulers can be
  overthrown, parties can be made and unmade, local resistance
  can be crushed, patriotic forces can be crushed, policies
  can be imposed, one-sided treaties and bailouts can be
  imposed on nation to restore realities favorable to foreign
  nation. Internal democracy can be side-stepped, will of
  people can be ignored, genuine opposition can be silenced
  using instruments of statism. Foreign private investment may
  not have the security of army but foreign states can deploy
  CIA, Gun Boat diplomacy and army to safe-guard its
  investments, property rights, ownership rights. Foreign
  state will not remain idle while its interests are violated
  by weaklings. It will bring full weight of its trade-tank-
  missionary axis to bear of the market-nation.

  Direct investment by foreign state comes when political and
  economic crisis grip the market-nation that threaten the
  private foreign investments. It comes when crisis threaten
  the puppet ruling party that can not survive without
  political and economic help from foreign state. You only
  have to look at Yelsin, Congress party of India, PRI of
  Mexico to see how they are sustained by active state
  sponsored help though international agencies, private
  foreign investors in the name of saving the reform
  government. When all other methods become inadequate, direct
  involvement of foreign state becomes essential. And since
  state aid has to be approved by political process of foreign
  state, all the political and ideological agenda ride with
  the state investment. The result. Investment not guided by
  purely economic factors meets the fate of assured failure.
  It creates vicious cycle where nation goes through series of
  crisis and every bailout by foreign state trigger loss of
  economic and political sovereignty until nation is left with
  none. Thus, investment by foreign state can not be good for
  the health and longevity of nation. If investment by
  domestic state has proven to be worse, how can investment by
  foreign state can be otherwise? Its benefits would be to few
  while it would misery for generations.

  Normally, investment by international agencies hook the
  nation of addiction for foreign dole. Its tough
  conditionality lure nation to hunt for no-string-attached
  sources of foreign investments. They go for Non-residents.
  But they soon find that Non-residents blur the line between
  non-resident citizens and foreign citizens. Foreign citizens
  blur the line between investment by individuals and
  investment by corporate and institutional entities. And they
  all in set the stage for investment by foreign state and
  eventual acquisition of 'market' by foreign state. Foreign
  private sector might treat the acquired nation as market but
  foreign state do not treat the acquired market as market. It
  treats it as its subject. Welcome to colonialism.

  Thus, moral of the whole story is that investment would is
  seldom monolithic. Investment by domestic sources is not the
  same as investment by foreign source. They both are
  antithesis as far as their consequences on nation are
  concerned. Unless investment is further qualified by its
  source, no judgement can be made weather investment is good
  or suicidal. We can not take investment to automatically
  imply progress and development. One should really be
  suspicious of politicians who wave a magic wand of
  investment as a panacea of all ills. We should we suspicious
  of them if they put all sources of investment at par and
  hide the antithical nature enshrined by different sources.
  If they do not qualify investment with the source, they must
  have reason for it and not a pretty one. It only proves that
  such politicians are part of deliberate hoodwinking of
  nation and evil conspiracy against nation.

  Today, we are witnessing desperate socialists trying to save
  their political careers by desperate measures and quick
  salvations. USA is offering them quick paradise for a great
  national price. Both sides want to quickly get over with it
  like crooks trying to clean up the house before house wakes
  up. There is desperate cries and screams of
  reforms(globalization) not going far enough and fast enough.
  As people numbed by novelty of American TV, Movies, fast
  food are still in virtual world to feel the pinch of
  economic and political deforms. They are panicking that
  their reforms are not going fast enough and not producing
  declared results. In India, the deformers are lining up
  communists to give lip-support to economic reforms as if
  communists are expert on economics or genetically inclined
  for national interests. And if Indian communists are
  supporting the economic policy, than that is a compelling
  case for not following it. It has to be bad for people and
  nation for communist to support it. If communists support
  it, it has to be bad.

  There are no short cuts to economic progress and there is no
  alternatives of living within ones boundaries and means.
  However long it takes to progress, one has to depend on
  local resources, local conditions and local investments.
  With it comes pride, dignity, respect and independence.
  Without it comes their loss.

  By Manmohan Sinha