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In a nation with an ailing economy, new investments must often come from external sources to help spur new growth and drive the economy out of recession. In order to receive consideration and attention from external financiers, (with the exception of economic aid), a country must present itself as a safe, secure, and potent location for investment. A country must develop an FDI Strategy. How does a country make itself a great destination for FDI? What does it take for an FDI Strategy to be successful? Investors with capital to spare will seek out the highest returns possible. If a country has great potential for returns it must make itself noticeable, otherwise investors will look elsewhere. The FDI Strategy must convey both current and future strengths. The idea of development and improvement, “emerging” markets, is gold to any investor. One need not look far to see amazing growth in the recent past. The economies of China, Brazil, and India have all grown exponentially. Mexico, too, is improving its image and receiving more foreign investment. Nation’s must also take into account macroeconomic factors. After 2007, a general scaling back of foreign investment occurred, falling 14% in 2008 and then another 39% in 2009. With scarce capital and recessionary pressures, investors will resort to safer more conservative investment opportunities. Risk aversion increases dramatically after any bust, and only nations with the strongest reputations will continue to receive FDI. Creating an FDI Strategy is an intricate process that takes time to yield results. Nation branding, a relatively nascent concept, is essentially what marketing is to any large corporation. The destination is the product. A nation must create a comprehensive and realistic branding strategy to achieve results, that takes into account prevailing perceptions and opinions, and steering itself into the best possible. The value of a good FDI Strategy must not be underestimated. It is integral to the long-term success of a nation. Two nations with equal prospects may have the same risk and potential returns, but the nation with a better branding strategy will always prevail.
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FDI Strategy, Foreign Direct Investment Strategy, Nation Brand, Impact of Foreign Direct Investment, City Branding,
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