Foreign Private Investment - A Boon to Developing Countries

THE high standards of living and improved national security that industrialization can bring are so evident that no country can be named that does not cherish the hope of industrializing. With such a universal aim, why do many countries unable to develop their own industries accomplish so little toward attracting the foreign private investor, who alone can provide them with the necessary capital and skill? Obviously, because they fail to under- stand what constitutes a favorable climate for investment, because they have false notions about being exploited or dominated by the foreign investor, or because they are so nationalistic they refuse to permit outside assistance. The purpose of this paper is to aid the citizens and policy makers of developing countries in achieving their aims, by defining the conditions which en- courage investment and portraying the results of a policy of encouragement. The following is quoted from Eugene R. Black, president of the World Bank: