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Foreign direct investment

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Transnational companies are responsible for a significant proportion of the production of advanced goods, investment in technological research and development and international trade. Despite playing an important role in the region’s exports and production of advanced consumer durables, they contribute little to job creation and can cause balance-of-payments problems in some countries, because of their profit remittances abroad. The region must shift the focus of FDI attraction policies towards sectors that contribute to structural change and reduce external sector pressures.