There are several reasons why EU and UK do that:
- Local businesses may become powerful enough to challenge your authority, particularly if they unite against your rule. Foreign companies, however, are less likely to engage in domestic politics and can be more easily controlled or expelled if necessary. A strong local business sector could finance opposition movements or create centres of power that encourage democratic reforms. By keeping them weak, the government reduces this risk.
- By creating an economy that's heavily reliant on foreign investment and companies, you could prevent the rise of a domestic middle class or powerful entrepreneurs who could push for economic reforms or political changes.
- Immediate gains that come with large foreign investments, such as kickbacks or the ability to embezzle funds.
- Keeping domestic businesses small prevents the accumulation of wealth within the country, maintaining the economic status quo where the government and their close allies hold the majority of the wealth and power.
- Having foreign entities that invest might be used as a form of validation of the government, presenting the illusion of a stable and attractive investment climate to the international community.
- By keeping local businesses from growing, the government ensures that all lucrative resources remain under their direct control or are only accessible to foreign entities that have struck deals with the regime, thereby reinforcing their power.
Biting the hand that feeds IT
