QUESTION OF THE DAY WHAT ARE THE TWO GREATEST DANGERS TO INVESTMENT?

QUESTION OF THE DAY
WHAT ARE THE TWO GREATEST DANGERS TO INVESTMENT?

An unstable country and unstable currency are the greatest dangers to investment.

When a country becomes unstable like Syria many citizens would want to go out. Hence investors are likely to keep away. Political stability is therefore very important in attracting investments.

This is why Governments which are committed to development must become open and democratic which would promote free expression of divergent views. When governments have the capacity to deliver they must govern with the participation of unions, youth movements, women movements, human rights organisations and other civil society organisations which would serve as it’s eye and guide it to know which problems are urgent to address. However, Governments which do not have the capacity to deliver must become intolerant of divergent views and would not open up the media for their free expression. They would see trade unions and other civil society as trouble makers and do everything to suppress them. In doing so they do rob themselves of the opportunity to know the concerns of the people. They end up having silent critics who join their ranks to get benefits but would criticise them whenever it is safe to do so. They call such people wolves in sheep’s clothing instead of acknowledging that they have imposed a reign of fear which drive their critics underground. The endless grievances also create another form of instability and do drive away investments.

Furthermore, an unstable currency also drives away investments. For example, when the state intervened to fix the value of dalasi above its market value many who had foreign exchange would retain them knowing that if one invests under such a climate one would have something of lower value than the true worth of one’s currency. This would undermine investment.