[rmnunez]

Decisions to invest are made based on a variety of factors and their interplay. Sometimes its the value of the natural resource that matters most (gold, diamonds, oil...) but it may also have to do with the distance to market, the costs in extracting the goods, the technology required and availability of skilled workers to participate in the productive processes, are all part of the calculation.

Canada and Scandinavian countries have fine lumber, but very high labour costs, confiscatory fiscal practices, onerous environmental regulations and tremendous labour costs, which together reduce the amount of trees profitably harvested. Then there's Brazil and Subsaharan Africa which also have lots of lumber of even higher quality, but fewer environmental restrictions, more lenient tax policies and lower labour costs, so that even though they are farther from the markets and despite the relative difficulty in finding qualified workers, more trees are cut in these places.

Its a fact-sensitive issue that requires weighing all of these things. Multinational corporations making foreign investment choices are looking for ways to maximize their profits, they aren't investing to improve global outlooks or standards of living, they really are just looking for ways to maximize their shareholders' dividends.

Governments seeking to improve their citizens' outlook need to compete to offer the most favourable and attractive conditions for investors. They need to facilitate repatriation of profits, offer strong assurances capital investment will be protected, provide adequately trained workers in sufficient numbers and at lower wages -otherwise the multinational won't invest its capital there.

A 350-room hotel on the Mexican coast will set an investor back $30-50 million and take 30 years to amortize, with a crew of about 120 workers at a tenth of what such workers are paid in the US and without any strikes, given Mexico's relatively high taxation. If they had to pay the workers a bit more, it might be more attractive to invest in Costa Rica, which is farther from the market. I've seen how they calculate these things with hotels and its amazing how little a difference can move such a huge investment from one place to another.

Resorts sustain huge communities of golf-course gardeners, stable boys, windsurfing and scuba-diving school instructors, maids, waiters, bell boys, cab drivers, tour guides, life guards and all sorts of other folks catering to their visitors, whole towns depend on a single hotel. A single obnoxious union leader demanding just a minor concession could ruin the whole village's prospects.