Afghanistan

The Impact of Corruption on Investment: Part 5 of a 6-Part Series on Corruption & Anti-Corruption Issues in Afghanistan

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Eray Basar
Assistant Knowledge Manager
Afghanistan@cimicweb.org

Steven A. Zyck
Economic Development KM
steve.zyck@cimicweb.org

This report comprises part five of a six-week series addressing corruption and anti-corruption efforts in Afghanistan. This piece reviews the relationship between corruption and investment, particularly foreign direct investment (FDI), in Afghanistan. Related information is available at www.cimicweb.org. Hyperlinks to source material are highlighted in blue and underlined in the text.

Foreign Direct Investment (FDI), according to the Organisation for Economic Cooperation and Development (OECD), is defined as the following: “a category of investment that reflects the objective of establishing a lasting interest by a resident enterprise in one economy (direct investor) in an enterprise (direct investment enterprise) that is resident in an economy other than that of the direct investor.” More simply stated, FDI involves an individual or enterprise from one country investing in the economy of another country. This report highlights the benefits of FDI for developing and conflict-affected countries but also cites research which shows that investors may be deterred by corruption.