Private Foreign Investment and Development: A Partnership for the 1990s?

Pradip Sarbadhikari is a political science professor at Lakehead
University in Thunder Bay.

This concise monograph, although cast in the mold of the 1980s, provides
a useful background to the increasing literature on globalization in the
present decade. It addresses four major questions: whether foreign
investment can replace bank lending as a source of external capital;
what contribution it can make to income and employment creation; whether
it transfers appropriate technology; and whether it deals with new forms
of investment. The authors believe that “foreign investment cannot be
viewed as a substitute for lending from international banks or for
official flows, but rather as a complement.” Moreover, private foreign
investment is not likely to flow into crucial sectors of development
like health and education. On the other hand, foreign direct investment
provides technology, hard and soft investment, and marketing knowledge,
as well as capital. The study offers several prescriptions for
increasing or improving Canada’s private investment. In its six
chapters, Culpeper and Hardy present an introduction followed by a
useful background; Chapter 3, which is central to the book, deals with
specific issues (investment, technology management, markets and
ownership, income and employment); a short conclusion is then followed
by policy prescriptions for developing and developed countries as well
as for Canada incorporating conflicting signals. The North-South
Institute needs to update this book to that it covers recent historic
measures aimed at liberalization and at the wooing of private foreign
investment for development.