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The Role of Foreign Investment in Tourism Development

The Role of Foreign Investment in Tourism Development

The decision to invest is one of the most difficult economic decisions and the most dangerous, because it is associated with many factors and variables, which are often difficult to predict their behavior and trends of development.

Foreign investment is the vital and effective element to achieve economic and social development, as any initial increase in investment will lead to double and cumulative increases in the interior through the so-called investment multiplier, and an increase in income must go part of it to increase investment through the so-called accelerator.

The investment has received great attention in the literature of economic development because it is one of the factors affecting the national product, which in turn stimulates demand for production goods, as well as the fluctuations in investment affect income and employment.

The field of investment represents the type or nature of the activity in which the investor wishes to invest his money in order to obtain a return, in other words, the entity or space in which the investor intends to invest his money. When we say domestic and foreign investments we mean investment, while when we say real estate or securities, we define the tool used.

In short, when we talk about the field of investment, we mean a certain economic sector, while we mean the investment tool when we talk about the origin of financial assets or real.

It seems that the investment goes naturally towards countries whose currency is strong and at a constant high or at least does not fall in the near term and not the countries that suffer from rapid inflation and the collapse of the currency, but this rule is not fixed all the circumstances and in all places. It is enough that the investor enter his money in the currency of that country (ie, the country with a strong currency) and recover it after a period to find that the value of his money has increased, except for the profit that came during those cities if he was a citizen of those countries that melt their currency and rise in inflation rates.

In most cases, investment in tourism and travel depends on the same business principles as in the rest of the economic sectors. But in some cases investment in the tourism sector is made for non-commercial reasons as in the following cases:

1. Many countries invest in the tourism industry for social and environmental reasons rather than purely commercial goals.

2. In many cases, institutions such as banks invest in the tourism sector for non-commercial purposes, but more importantly, the substantial growth in the capital value of the property compares with those assets whose value declines over time.

Some investments are made for lifestyle reasons. Some people buy yachts, a leisure farm, horseback riding, leisure centers and commensurate with their lifestyle for individual or social reasons.

Internationalization has historically taken place in the economy that exchanges goods internationally. In other words, the free market preceded the capitalist economy. This internationalization of economic life represents an objective trend towards the transformation of closed domestic markets into open markets worldwide. The collapse of the feudal system and the growing importance of international trade, In the sixteenth century to the emergence of the elements of business thought whose ideas were crystallized by a group of heterogeneous writers later called the name of the commercialists (Thomas Mann, Jean Colcier), the topics have been crystallized between the two traders, necessarily The state’s intervention in economic life, to achieve an appropriate trade balance that contains surplus with the increase of the state’s economic strength by increasing its population achieve an accumulation of psychological minerals money which is the basis of wealth.

Source by Ahmed Ali Hussein

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