While the gap between wealthy and poor countries has been getting wider, the poorest people in the world have actually been getting richer thanks to foreign investment, according to Roberto Echandi, a senior investment policy and promotion official at the World Bank.
Foreign investment into poorer countries not only helps to build infrastructure and develop export industries but also, more crucially, passes on know-how and education, the official said.
"When Adam Smith wrote The Wealth of Nations, the gap between the richest country and the poorest was four times," said Mr Echandi.
“The richest country was four times richer than the poorest. Today that gap has increased by more than 400 times yet we live in a paradox world because at the same time that gap is increasing, the poverty is decreasing. If I want my people to live better, I need my people to learn how to produce goods and services and foreign direct investment is absolutely necessary. It’s not a debate, it’s a fact.”
Mr Echandi was speaking during the second day of the Annual Investment Meeting in Dubai, where thousands of delegates from around the globe have gathered to listen to discussions on foreign direct investment (FDI).
UAE officials have also been making the case for the potential benefits from higher FDI levels around the world.
“We know the importance of direct foreign investment and its role in transferring technology to other countries and the transfer of skills as it has helped us transform our economy to one based on knowledge,” Sultan Al Mansouri, the Minister of Economy, said on the opening morning of the conference on Sunday.
The World Bank official's comments come on the heels of a plea from the head of the United Nations' trade arm, Mukhisa Kituyi, for investors to spread their money around the world to help combat trade protection and alleviate poverty.
The protectionist mood comes at a time when growth in global trade has stalled since the financial crisis of 2008, creating the urgency for an increase in foreign direct investment into the countries that need it most, Mr Kituyi told delegates to the meeting on Sunday.
Leading the protectionist wave, the US president, Donald Trump, has vowed to upend US trade agreements with countries around the world to create more job opportunities for American workers at home.
mkassem@thenational.ae
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