Contribution and problems of foreign investment to sustainable development of developing countries

Foreign direct investment impacts on investments in the domestic economy are significantly higher comparing to those of other capital flows. Besides evident direct FDI (foreign direct investment) effects on investments, there are so-called indirect effects that can be positive (crowding in) or negative (crowding out). Besides the transfer of new technologies, expertise and good practices with FDI inflows, the positive crowding in effects of FDI appear when FDI generate new investments by other domestic companies, where the relationship input - finished goods or inversely could be set up. Today the process of economic liberalization, improved transport and communication systems and increased global demand for commodities like energy, mineral resources and agricultural products, have fostered investments in related projects, especially in developing countries. This create opportunity, but also risks for sustainable development of these countries. That’s why governments must carefully evaluate the terms and consequences of investment projects and also the extent to which they advance-or undermine sustainable development goals, like poverty reduction or environmental protection. Key words: foreign investments, sustainable, development, developing countries, contribution, improvement