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Report on Country Attractiveness for Foreign Investment to understanding of political,economic & legal system of country

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Country Attractiveness for Foreign Investment

Executive Summary

Remote speculation happens when an individual or business from outside Australia sets up another business here, or purchases property or offers in an Australian business. It likewise covers a scope of other money related exchanges, for example, advances. As an enormous, asset rich nation with moderately extreme interest for capital, Australia has, for more than two centuries, depended on remote speculation to meet the deficiency of residential reserve funds against local venture needs. Outside capital has enabled the Australian individuals to appreciate higher rates of financial development, business and a higher expectation for everyday life than could have been accomplished from local investment funds alone.

Introduction

When it comes to the case of foreign investment, Australia welcomes it with open arms as it helps build the country’s economy and enhance the state of living of the citizens. Foreign investments also help to develop future technologies which can make the life of the people much easier(Alonso & Kok, 2018). The paper deals with the political, economic and legal system of the country and how it helps to attract the investment of global organisations and institutions into the country. The paper also puts forward certain arguments as to why Australia is one of the best countries for foreign investments. 

Case analysis

After the end of the Second World War the politics in Australia is majorly dominated by two large parties, which are the Australian Labour Party and the Australian Liberal Party. The labour party is considered to be a socialist party which mainly stands forthe right of the workers and the working population of the country. The liberal party on the other hand stands for the liberalism in the economy and conservation of the Australian culture. Other than these two parties there are several small parties(Manu & Patel, 2018). The prime minister is the head of the largest party which holds the majority in the parliament. All the major decisions are taken by the senate of the country in the parliament or House of Representatives. 

To ensure the foreign investment in the country the parliament makes laws and policies which increase the ease of investment of a global institution in the country. There is a special government organisation in the country called the Foreign Investment Review Board or FIRB which reviews the significant proposals for investment and analyses the applications for investment which falls within the scope of the country’s investment policy. The act which makes recommendations on the behalf of the government, to the treasurer is the Foreign Acquisitions and Takeovers act of 1975. 

Australia being a country full of resources and also consists of high demand for capital and has a relatively small population(Mourao, 2018). The country enjoys a stable parliamentary democracy and has a high quality of governance in the country. The governance of Australia is considered one of the best in the world. The country ranks number 12th in the position of the condition of governance worldwide. This ranking has been provided by the World Bank’s Worldwide Governance Indicator in the year of 2017. 

The role of foreign investment to deliver a high rate of economic growth, to provide more and more jobs to the people and improve the standard of the living of the population depends indirectly for more than hundred years of the Australian economy. This argument will hold true for forthcoming future of the country(Aisbett et.al. 2018). When a person or an organisation establishes a new business in another country then indirectly the person is adding benefits to the country’s economy in terms of investment and this is called foreign investment. 

Foreign investment plays an important role in supporting the economy of Australia or any country for that matter. Many organisations find the demography of the Australian economics suitable for investment because the economy of the country enhances the operations of the organisation or the business(Yihdego et.al. 2018). Some organisations and businesses enjoy reduction of taxes when the company complies with the environment laws of the country, which makes the country stands apart from many of its counterparts(Davies et.al. 2018). The governmental banking institutions provide a better loan structure top the start-ups and supports the newly established businesses at all cost. Additionally, the policies set by the government regarding the export of commodities can be helpful to accelerate the financial structure of the country despite being affected by the slowing economy of the global market of gold and petroleum products among other.

The foreign investment in Australia accounts of every one in ten jobs in the country according to the Australian bureau of statistics. This enables the country to relax the laws in the country for the outside organisations in terms of duty free import and export on some items which support job growth. The harboured nature of the Australian landscape provide easy access to the companies to import and export their products by seas and major part of the transactions take place through the pacific ocean route surrounding the country(Meyer et.al. 2018). The country also enjoys close relationships with the other countries in the indo-pacific region. Therefore it can be established that the economy of Australia is vibrant which allows for more foreign investment opportunities. 

The government of Australia screens the foreign investment proposals case by case to determine if a specific proposal is of national interest or not. The proposals which get screened by the government include proposals of conducting business operations in the country in all sectors of the economy(Zhang, 2018). The government generally screens the proposal based on the factors that if the proposal is considered a threat to the national interest, security and local competition. The country currently has put sanctions on trade with countries such as Ukraine and South Sudan. The country maintains the trade ban due to the role of Russia in the interception of vessels of the navy. The ban on the South Sudan  is due to the on-going embargo of arms and the obligation of the country towards the United Nations Security Council. The country always put the wellbeing of the domestic and local businesses first and then considers the proposal for establishing business by the foreign companies. Therefore the government has mandated to give local people jobs in the foreign organisations(Kiburi et.al. 2018). This step accomplishes two things, firstly it ensures that the local Australian is getting his taxes worth by getting employed and secondly it increases the investment of the outside companies into the local market. 

The main regulatory laws that are established in Australia to look over the foreign investments in the country are the Foreign Acquisition and Takeovers Regulation 2015 and the Foreign Acquisitions and Takeovers Act 1975(Baltas et.al. 2018). Australia follows the modern trend to liberalise the regime of foreign investments which a step up from an inefficient policies of protectionist within the structure of the broader liberalisations policy in the country. The country has also found itself in dispute regarding trade with various countries from time to time. The recent dispute with India involves the measures taken by the Indian government regarding the export as well as procurement of sugarcane and sugar. Australia claims that the measures taken by the government of India is inconsistent and violated the agreement it has with the agricultural exports of India. The government of Australia continues to recognise the healthy benefits of the investments from the foreign organisations and also shows concern over the acquisition of the domestic assets by the foreign companies(Williams & Vrabie, 2018). The government acquits the smaller proposals especially in the industry sectors over larger proposals unless they are judged contrary to the interest of the country. Despite being slowed down of by the decrease in the global trade structure, the country has shown significant growth in the country’s GDP rate and continues to experience the longest constant growth in terms of GDP among the developed nations.

Conclusion

Australia being a country full of resources and also consists of high demand for capital and has a relatively small population enjoys full foreign investments with conditions ideal in the economic, political and legal sectors of the country. The paper also concludes that foreign investment has enabled the citizens of Australia to appreciate higher rates of development in terms of finance, business and a higher expectation as well as standard of life than could have been accomplished from local investment funds alone.

 

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