What country is abbreviated AN?

What happens when an industry is developed in a country?

• What are the benefits to the country? From what i'm seeing... A country encourages investment, perhaps with some subsidies. A company invests by building a facility in the country. The company employs a lot of locals, as well as a number of foreign experts. The company is taxed. The industry is more developed, hopefully leading to results (good sales, good tech infrastructure), and this encourages others to invest in a facility in the country. So, the country gains 3 things: 1) corporate tax money, 2) jobs for people (which is money inflow to the country or just money circulation within the country) and the money from taxing these people via income tax or through their increased spending, 3) more investments to repeat the cycle. Now i feel that i'm definitely missing a ton of things here, but i don't want to speculate too radically. What am I missing? Why would a country decide to actively develop, say it's automobile, industry?

• Answer:

  I agree with everything you say. A market-led development investment creates jobs, income and exports. Exports are specifically important because business in the country will naturally use a alrge part (1/3 to 1/2 perhaps, typically) of the foreign exchange to import "investment goods and services" i.e. the capital investment (as you say, 'to repeat the cycle') such as machinery, roads, sewers and training. You can look into the development of Malaysia's motor and electronics industries if you want to look at successful examples. When on the other hand this kind of thing is government-driven rather than market-driven, the choice of industry/ies may be stupid and/or the profits may be dissipated in 'prestige' projects. Malaysia skilfully avoided this and the harmful corruption that often is associated in other countries by letting government ministers own good-sized stakes in the developing enterprises. Instead of getting the 'fruits' of power as backhanders and cash-in-hand just for their political decisions, the UMNO leaders got their millions of $ if and when the enterprises they backed were successful in the outside world (selling their Proton cars and their Malaysia-made Panasonic radios and so on).