The role of foreign direct investment by multinational corporations in Africa
Foreign direct investment in conflict-affected areas is a contentious issue in the study of economic development and international human rights. Some analysts are enthusiastic about foreign direct investment (FDI) in conflict-affected areas, claiming that it supports economic growth and play a cons...
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| Format: | Article |
| Language: | English |
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UJ Press
2024-02-01
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| Series: | Journal of BRICS Studies |
| Subjects: | |
| Online Access: | https://journals.uj.ac.za/index.php/jbs/article/view/2429 |
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| Summary: | Foreign direct investment in conflict-affected areas is a contentious issue in the study of economic development and international human rights. Some analysts are enthusiastic about foreign direct investment (FDI) in conflict-affected areas, claiming that it supports economic growth and play a constructive role in peace-building efforts. On the other hand, a substantial body of literature suggests that FDI in conflict-torn areas may exacerbate instability and negatively undermine economic growth.
This article focuses on two multinational enterprises from Sweden and China that have been operating in South Sudan and Democratic Republic of Congo, respectively, to determine whether there is a link between their investment and the security crises in both countries. Findings shows that the corporations have been accused by both local and international rights groups of being extractive, involved in human rights violations, and building informal networks with local officials.
To avoid resource exploitation and human rights violations, as well as to allow companies to play a constructive role in the economic development in Africa, the article suggest that stringent laws and fiscal transparency in investment operations must be put in place.
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| ISSN: | 2519-7452 2519-7460 |