A Concern for Foreign Direct Investment by Canadian Firm

Published: 2019-09-09 07:30:00
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Foreign direct investment (FDI) is something that presents an opportunity to the local people to enjoy economic growth in their zone. However, the impacts of Foreign Direct Investment on the locals can have far-reaching consequences with regards to the long-term growth plans of a people. Serious concerns have been raised about the investment of foreign firms in large stake holdings within in a locality especially with regards to the sustainability of local businesses in the area. This part looks at the disadvantages of foreign direct investment to the locality should the Canadian investor bring in the largest shopping mall and entertainment facility to the locality.

One of the major concern that I have as a representative of the citizen group is the social effect that the firms investment will have on labor relations in the locality. The biggest entertainment facility and shopping mall will no doubt contribute to the largest employer in the locality. Therefore, the majority of workers will be servicing the facility. Being the chief employer, there is a possibility that it will have a large control over labor unions. This means that unions will be forced to hold down wages, benefits and other standards that would otherwise apply if the power of the employer was not as much. With such controlling interests in the labor sector, it means that workers can be misused, subjected to tough labor conditions among other social injustices that could come with the involvement of foreign bodies in a controlling share of the market (Donovan, Mooney, & Smith, 2012).

Another cause for concern is the effect to the economy that such an investment could have on the economy of the locality. While the employment levels will have risen, alternative providers of such services will have lost their business to foreign investors. The impact of the foreign investment will have meant that local businesses can no longer make profits from the small scale activities within the same industry. The creation of an all-in-one spot for all the shopping and entertainment experience that is required by the consumers of the locality will have been taken up into one place that is not locally placed. Furthermore, the implication of foreign investment is that the returns from the investment will be taken back to the parent country of the investors. This denies the host locality the benefit of such revenues in community enhancement and building exercises. Moreover, the shareholders of the company are most probably not locals. Therefore, very little local profit will come of the investment (Megele, 2012).

Another disadvantage of the foreign direct investment is that it will affect employment in another way. While the company will be based locally and will employ locals, the company will not use local supply chain techniques leaving the company at a disadvantage. This means that there will be limited application of the employment benefits to the locals. Furthermore, local competitors will be taken out of business with the expected size of the enterprise that the foreign company intends to put up. Local small-scale competitors may not be able to keep up with large investments that the foreign company will put up, and therefore render the locals jobless.

In my opinion, an investment of such magnitude would have some adverse effects on the population of the locality. The local authorities may need to examine the implications of the investment before approving such an investment.

Policy Making at Local and State Governments

Policy making can be defined as the processes through which authorities determine the provision of services to the citizenry of their jurisdiction. In this case, the local and state governments are the authorities in question making provisions for the rendering of basic services to the people within their jurisdiction. Despite the limited application of legislative duties in the state and local governments, there is a significant amount of related duties that these governments will undertake in order to ensure the smooth running of services at their level. For example, the provision of services such as healthcare, education, garbage collection, security and emergency services are some of the basic services that these governments are tasked with providing to the people. Therefore, the policy making process becomes a consideration of the cultural needs of the people and a response to these needs in the most effective ways. This part will look at some of the reasons why policy making is difficult.

One of the major challenges to policy making at the local and state governments are the calls for higher efficiency among government agencies. As a result, there has been continuous budget cutting that would improve overall efficiency of the governments. The aim of cost-cutting schemes is to give the best quality at the minimum possible cost to the citizen since such projects directly depend on the citizenry for finance. Therefore, it is imperative that the cost to the citizen is minimized, leading to a continuous cost-cutting program that has severely affected the implementation of new policies most of which require some input capital before the long-term goals are realized. With this in mind, state and local governments are severely limited in their application of innovative solutions to the citizens.

Alongside the issue of financing the changes, there has been quick and evolutionary technology that has characterized todays world. Things are changing quite rapidly in the field of technology. The need to improve infrastructure in the areas of transportation, information technology, water and waste management alongside other areas has brought the prioritization of state and local government needs to the limelight. With reduced funds being channeled to local governments, the only solution to such problems would be to encourage community initiative. This has however, led to fragmentation of certain areas of interest in the course of working on such projects as some neighborhoods will have higher abilities than others (Donovan, Mooney, & Smith, 2012).

In todays world, people will need to be engaged in what they are doing if they are going to participate. In an economic world that needs the attention of the citizens in making life better for themselves, it has become quite difficult to engage the ownership of the citizenry towards projects that the local government is working towards, further leading towards an increasingly challenging task in achieving set goals for policy making. The citizens in the local and state governments are no longer owning the policy-making process as was the case before, with increased levels of participation in other areas. Moreover, local and state governments still face the challenge of meeting the citizenry on social media and internet platforms, which would spur citizen participation in policy-making processes.

Governors as mini-presidents

When we consider the role of the governor at the state level, we can see that the governor plays the chief administrative and executive role within that jurisdiction. The United States presents a geographical boundary of the states that presents each state as an independent institution capable of making its own laws and governing its own affairs. As such, the leader of the state government will effectually be the leader of all the affairs of the particular state. Governorship thus includes the making of major decisions within the state that would be made by the president at the national level.

One of the major duties of the governor, for example, would be assenting to the law making process within the state. As the system of checks and balances apply, the executive have the duty to check on the legislative role of parliament at the state level. This means that the governor will have the role of ensuring that the laws made within the state reflect the values of the people within the state, bearing in mind the different socio-cultural factors of interest. In this sense therefore, the governor will have to represent the interests of the people of that state in various political gatherings and state-wide decisions.

The governor will also act as a mini-president with respect to the political representation of the states interest at the federal level. All the decisions made within the state will be communicated to the governor for representation at the federal government. Moreover, this role is similar to the president in that the president is tasked with representing the people of the United States in international forums and other socio-economic events. The governor is also tasked, within the boundaries of the constitution, to conduct certain socio-economic duties on behalf of the particular state in question. For example, state organized charities will be subject to the jurisdiction of the governors attendance if a political figure should be required to attend.

In addition, the governor will be seen as the top-ranking official in the presiding state. The governor is the host of all foreign dignitaries and officials visiting the state. In most state occasions where there is interaction between dignitaries of other nations or other states, the governor will always be considered the chief authority within the state, capable of performing official state functions even in the absence of the federal presidency. Moreover, governors are the representatives of the people at the state level and will thus be engaged to host the visiting dignitaries as state legislations call for (Megele, 2012).

However, the role of the governors is highlighted as that of mini-presidents because of their limited power in terms of control of overall function in the state. As a part of the confederation, the governors actions are limited by the constitution to preclude what they cannot do. For example, military alliances cannot be entered into by governors of any state with another sovereign state. The state sovereignty of individual states within the confederation has been limited, and this would mean a direct reduction of the powers of the governor with regards to his duties. Therefore, it is entirely true that the governor is a president of sorts, but does not have absolute power over the state as the leader.


Donovan, T., Mooney, C., & Smith, D. (2012). State and Local Politics: Institutions and Reforms. Wadsworth: Cengage Learning.

Megele, C. (2012). Local Government in 2020: challenges and opportunities. Retrieved from The Guardian: www.theguardian.com/local-government-network/2012/apr/11/local-government-2020-challenges-opportunities.


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