The Importance Of Economic Growth

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Thus, we know that economic growth in a country is strongly related with its productivity. The increasing of productivity will brings the increasing of economic growth. The increasing of productivity in a country means the ability to produce more goods and service with the same amount of inputs. Also, there are many indicators to determine the economic growth, such as high saving rates, high income (that will drive the higher GDP), and the number of employment. A country can be categorized to have an economic growth if they are having an improvement in terms of their productivity and the indicators that will determine the economic growth. Moreover, the econoAs the invisible root of a country, foreign direct investment is assumed as a nutrition…show more content…
In fact, in international business that involves global area, FDI comes as an external source of capital for a country. As a source capital of a country, FDI drives capital formation. Moreover, FDI also involves advanced technology. Since these two factors are the motor economic growth of a country, FDI is expected to promote and support the economic growth of the host country. As a source of capital, FDI will foster indicators that influenced the economic growth. For example, the input of production. It could be technology, labor, materials, and so on. The improvement of productivity in a country will contribute to the economic growth of its country. The improvement of a country’s productivity will support the increase of real GDP in a country. It is because the higher productivity drives a higher income and it will contributes to the increase of real GDP. Additionally, according to The World Bank, the economic growth in Indonesia is really impressive despite slowing down in recent years. The country’s gross national income per capita has steadily risen from in the year 2000 to $3,524 in 2014. This condition will continously increase the invesment climate. The better economic growth of country will encourage more foreign direct invesment to a…show more content…
On the onther hand. AEC stands for Asean Economic Community is an agreement among countries in ASEAN in terms of employment. These agreements will create less boundaries between countries in ASEAN in terms of trading and employment. By AFTA and AEC, each country has able to compete with the other countries in terms of their economic condition, human resource, infrastructure, and so on. Because with a less boundaries, it is much easier for a country to enter the others market in ASEAN. If a country does not able to compete, they will be taken over by the country who invests in their country. Several studies stated that FDI brings many benefits to the host country. They will get additional capital to support their productivity and economic growth. In fact, FDI bring more effects on developing country rather than developed country. FDI give more impacts Based on the OECD in 2002, countries with lower economics consider FDI as the way for economic growth and modernization in economy. For this reason, many governments in developing countries treats a foreign capital in a special way (Carkovic and Levine,
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