COTE D'IVOIRE INVESTMENT GUIDE
http://www.aabf.org/cote_divoire_inv_guide.htm
Direct Investment is supported in Cote d'Ivoire
Since 1985 the Ivory Coast has had a foreign investment policy that allows for companies, large and small to invest their money in Ivory Coast. In 1995 the government has added provisions to the investment policy in order to give other companies more freedom to come to Cote d'Ivoire. This policy was made when the economy was constantly improving in Cote d'Ivoire, but now this policy is a lot more useful, because the country needs to bring in some foreign direct investment in order to help economic development. This new provision for foreign investment is good, because it allows for more larger companies to come into the country to create more larger and immediate change. Also the provision allows for companies to reach out for investors from outside the country through the Investment Promotion Center which was created to help smaller businesses.
One thing that the larger companies can accomplish in the country is to come in and inject foreign capital which will in turn increase aggregate demand. By increasing the aggregate demand of the country the GDP will also rise. The GDP rising can have trickle down effects on the whole economy, because the employment will also rise and these large companies can offer more work for a broader range of people with different skills. Also the increased GDP will give the government more money to close the savings gap of the nation. In more recent times the Ivorian government has struggled with foreign direct investment, because the country has been through a war and then also has had much political corruption. Foreign direct investment would be good for the short run of the economy, because it would immediately put in money to the economy that has only slowly been rising over the years.
Another offer in the provision is to offer more incentive to companies that will invest outside of the capital in more rural areas. What happens when the larger companies in rural areas invest is that more people will be able to learn skills and increase their standard of living. More infrastructure can be built in those areas also, because the area can become more populated and industrialized when an investment or a company comes to the region, because other things will follow it. The growth of the people will improve even after the investment decreased, because they would have some sort of skill that would lead them to another job.
One disadvantage that Cote d'Ivoire has to look out for, because they are so rich in cocoa and coffee resources, is if a company comes in to use up those resources. This would skyrocket economic development in the short run, but then in the long run the economic production would downfall, because the resources would run out. This would hurt the country for a long time after the MNC left, because they would have no more resources to base their production off of.
One thing that the larger companies can accomplish in the country is to come in and inject foreign capital which will in turn increase aggregate demand. By increasing the aggregate demand of the country the GDP will also rise. The GDP rising can have trickle down effects on the whole economy, because the employment will also rise and these large companies can offer more work for a broader range of people with different skills. Also the increased GDP will give the government more money to close the savings gap of the nation. In more recent times the Ivorian government has struggled with foreign direct investment, because the country has been through a war and then also has had much political corruption. Foreign direct investment would be good for the short run of the economy, because it would immediately put in money to the economy that has only slowly been rising over the years.
Another offer in the provision is to offer more incentive to companies that will invest outside of the capital in more rural areas. What happens when the larger companies in rural areas invest is that more people will be able to learn skills and increase their standard of living. More infrastructure can be built in those areas also, because the area can become more populated and industrialized when an investment or a company comes to the region, because other things will follow it. The growth of the people will improve even after the investment decreased, because they would have some sort of skill that would lead them to another job.
One disadvantage that Cote d'Ivoire has to look out for, because they are so rich in cocoa and coffee resources, is if a company comes in to use up those resources. This would skyrocket economic development in the short run, but then in the long run the economic production would downfall, because the resources would run out. This would hurt the country for a long time after the MNC left, because they would have no more resources to base their production off of.
http://www.economicsonline.co.uk/Managing%20the%20macro-economy%20graphs/AD-shifts-test.png