Opinion Sur
Usually investment is said to be “the” key variable to boost and sustain “the” economic development. However, not any type of investment will boost any type of development. It is essential to explicit (among the many that exist) which type of development we are pursuing so we can then identify which investments are the ones that bring us closer to the development society longs for and which, on the other hand, might move us away from or even infringe upon such development.
All too often, economic statements that lack veracity are accepted. This generally happens when we consider aggregate variables such as consumption, savings, investments, exports, imports. They are stated as if there were only one and not different types of consumption, savings, investments, exports, imports, etc. What is critical about this is that every different type of these variables has different impacts and implications. If we did not explicit these differences in impacts and implications we would be ignoring (huge negligence) or worse whisking away (despicable snare) what each type of investment generates in the economy and politics.
Those who are committed with a trajectory towards a fair and inclusive development (in opposition to the concentrating growth that prevails almost everywhere in the world today) we would do well in promoting investments that strengthen this trajectory and not those that attempt against it.
In this way, if the productive matrix would have been structured in such a way that it would generate recurrent bottlenecks in the external sector (lack of foreign currency due to the inability to generate it at the pace that its demand increases to cover the import of inputs, external-debt payments, remission of dividends, hoarding), then investments in import-intensive sectors must be balanced against other investments that are generators of value-added exports.
If the restriction would come from the side of a restricted available energy supply, then, likewise, energy-intensive investments could not be favored without enhancing, at the same time, the energy supply with new investments. Given the different environmental impact of each type of energy, it would be advisable to select as much as possible renewable sources of energy that will not compromise the environment.
If the main value chains were structured in a oligopolistic way, where a handful of leading enterprises are able to appropriate a good part of the value generated by the rest of participants, then the fact that those leading enterprises keep expanding their scope and domination with more investments without facilitating the capitalization of the entire value chain, does not result in a fair and sustainable development.
That is usually the case of food chains that include small producers, stockpile agents, carriers, processors and sale channels dominated by large supermarkets. The prices consumers pay are several times higher than those received by the producers (10, 20, 50 times larger). If in the process of price formation, the supermarket or the agro-industry would have such preponderance as to appropriate larger margins thus preventing the capitalization and growth of other participants of the value chain, then investments by leading enterprises would lead to a larger concentration of power to impose prices and commercial conditions. Instead, if fair and compensatory prices for every value-chain participant would have been negotiated so as not to deepen the concentration but rather reduce it significantly, then new investments would serve the whole chain and not just a handful of leading enterprises. Indeed, this would demand an important adjustment in behaviors that can only be assured by the decisive transforming action of the State. Now, if it is not possible to secure that all participants of the value chain would receive a fair compensation for their productive effort, then the investments to promote should be orientated towards establishing different processing or commercialization structures.
In the case of investments from large international corporations, to the usual factors of any investment (generation and no extraction of value, new jobs, enforcement of labor, environmental and fiscal regulations, impacts on the external and energy sectors) we would need to add other factors such as technological contributions, insertion in new markets and, an important one, decisional sovereignty. Local subsidiaries of international corporations must adjust to global strategies established by their headquarters. Therefore, their investment decisions, despite considering some local circumstances, in the end must follow the criterion of maximizing results for the whole corporation conglomerate which might not match national needs and interests.
We could go on with more and more examples regarding other sectors and territories. However and despite the usefulness of reinforcing the analysis presenting a larger number of types of investments with their impacts and implications, what these lines aim at unveiling is the myth that all investments have a positive impact. What truly matters is appreciating how each investment influences the economic and political dynamic of each phase of the type of development that the society pursues. In a final analysis, who are favored and who are harmed by the new investments. The investments might help in moving towards a more fair and sustainable society or, on the contrary, they may reinforce the concentration that favors some privileged ones and leaves large majorities marginalized.
