Promoting private investments pitfalls to avoid and pathways to success

Abstract

There is no attempt in this paper to reveal, in some normative manner, what are the guiding lights to promoting private investments nor all the pitfalls to avoid. Indeed there is no accepted doctrine or formula for unconditional flows of private investment. Rather, in this paper, an attempt is made to sort out a number of issues relating to the promotion of private investments. The first section provides a background on the resurging importance of direct foreign investment in the context of a generalized interest in privatization. A second section cursorily looks into the recent record of direct foreign investment flows in general and across Asia in particular. In addition this section examines the varying form of capital flows from major sources and the impact of incentives on them. The third section tries to answer whether there are rules for encouraging private investments successfully, or conversely whether there are mistakes to avoid. A final section concludes.