Incentivizing Investments with Political Vehicles

(Originally written: 10.12.2018)

American leadership promotes of governance, democracy, human rights, and global stability. How does this translate into social investments overseas?

Businesses consult political risk, such as power structure and roots of political legitimacy, to make decisions on overseas investments. Democracy, which involves social systems, tax laws, and a regulatory environment, enables a positive, sustainable, and local growth for social enterprises.

Economic growth often provides legitimacy to dictatorship, but democracy provides a stable political environment, with less corruption or government seizures of business. Therefore, it protects financial return with the discipline of the market by supporting our key allies under diplomatic turmoil.

For instance, India is an economically independent country with aims to enhance its strategic space and capacity for independent agency. If the objective of bilateral economic engagement is to accelerate the integration of the two economies, only a resolute defense of the free market with an open focus on increasing FDI – would allow it to overcome its vast development deficits to liberalize the economy while strengthening state capacity.

India can increase the use of digital payments and support digital finance technology projects to not only scale its technologies, but strengthen its resilience.

The most important task in strategic logic of each bilateral relations is the success of the affiliation, and how its benefits are to be conceived. Especially in a country where geopolitical rivalry coexists with economic interdependence.

Investment readiness remains a key issue for ventures. It requires understanding of risk and how to price it. Transaction and reporting requirements can be quite high. By opening up the private capital to solve difficult foreign policy challenges fundamentally guide critical capacity building and equip allies to support strategic priorities. Therein, it responds to on-the-ground conditions targeting specific vulnerabilities for sustainable and scalable growth of enterprises. I hope we can provide a role in development – the social impact investment ecosystem – to create liquidity in the market incentivizing a genuine strategic partnership with deep-rooted shared interests.