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Jakarta Post

Social capital no less important than foreign direct investment

  • Dewa Gede Sidan Raeskyesa

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Jakarta   /   Fri, July 19, 2019   /  11:56 am
Social capital no less important than foreign direct investment Women participants performing Gotong Royong (mutual cooperation) Dance as part of the Adeging Kutha colossal dance. (JP/Ganug Nugroho Adi)

Nobel laureate Joseph Stiglitz once said, “The erosion of social capital created an environment that was not conducive to investment”. This expression is a relevant warning to the government, which has been aggressive in promoting domestic and foreign direct investment (FDI). Investment has become important for developing countries to promote economic development. A country without adequate investment, especially in infrastructure, human capital and technology, will not be able to create sustainable economic development. Mostly, developing countries have the challenge of finding funding because of a lack of domestic savings, which means a lack funds for investment. As a result, they need investment from abroad to support development. Despite its dilemma, FDI plays a pivotal role in driving economic growth. FDI provides not only monetary benefits but other social and ...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.