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Foreign direct investment FDI is probably the single most important factor contributing to the globalization of the international economy FDI are increasingly strong economic links between developing and industrialized countries and also among developing countries Foreign direct investment in developing countries LDCs have increased nearly four-fold in the 1990s and now account for almost 40 per cent reaching some 120 billion in 1997 Foreign direct investment is now by far the largest source of all capital flows to the less developed world The objective of the FDI is to encourage the flow of investments for productive purposes among members countries and in particular to developing countries To serve this objective the WTO must provide some type of guarantees or insurance covering foreign direct investment for all parties host countries home countries and Multinational corporations against all the obstacles like Different needs political risks abuse of labor Transfer Restriction Breach of Contract corruption and Tax breaks WTO must carry out advisory and technical assistance for these parties so that their interests are protected and must emphasis on multilateral investment agreement MIA No unilateral action or bilateral Host Countries The host countries or the developing countries are interested in I development of their services communities and infrastructure that may help their industrialization and development III production of exportable goods and III continuous technological development in their industrial production and services Labor and natural source Abuse Once MNC has been attracted to a particular destination country they expect a high level of facilitation services Governments all too often give inadequate attention to servicing investors needs even though large sums of money may have been spent on promotion activities and success has been achieved against fierce international competition In retune Investors from industrialized countries want to come to developing countries for two main reasons First they apprehend that the return on capital in their home country is not adequate second they want to combine their capital with the
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