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Article II Section IX Prosperity and Independence

The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

How Does Foreign Investment Promote Economic Growth

Foreign investment is essential for a country's economic growth and prosperity. Specifically, investment by multinational corporations leads to an increase in standard of living of individuals. Multinational corporations demand high volumes of a product; products are generally labor intensive, leading to an increase in the demand for workers and thus allowing for the availability of more jobs. By acquiring jobs, individuals are able to obtain an income and, consequently, an increased standard of living. Additionally, increasing demands for labor will force wages to go up, which in turn will also increase the standard of living. As illustrated by Table 1, with an increase in standard of living, individuals will acquire more wealth to purchase products; thus, the investment by multinational corporations indirectly creates economic prosperity.       

Vietnam:  Per Capita consumption expenditures per year |

General Population | $205 |

Workers of Foreign-owned enterprises | $420 |

Workers in foreign-owned textile enterprises | $303 |

Workers of foreign-owned leather goods | $371 |

Table 1. Per capita consumption expenditures per year of the general population versus export industry workers.

In addition, investment into export industries contributes to economic growth, primarily in developing countries. Participation in the export industry means that countries will have more consumers to produce products for, thereby increasing the demand for labor and creating more jobs. These jobs are more likely to pay better, because they cater to foreign consumers...