THE ROLE OF FOREIGN CAPITAL AND AID IN ECONOMIC DEVELOPMENT
The Foreign Assistance Comes In Three Ways
---FOREIGN GRANTS------FOREIGN LOANS------FOREIGN INVESTMENT---
a. Foreign Grants: The Foreign Grants are free and are not to be returned. These can be in the form of goods or economic grants.
b. Foreign Loans: The Foreign Loans are to be returned. There are two types of loans Soft Loans and Hard Loans. Loans can be bilateral and multilateral.
a) Soft Loans: In soft loans Interest Rate is very low and Time period to return loan is long and also there are no strict instructions interims of usage of these loans.
b) Hard Loans: Where as on the other hand in hard loans The Interest Rate is very high, time to return the loan is short and there are strict policies on the usage of loan.
c. Foreign Investment: The Foreign Investment is brought in to a country for business purposes. Foreign Investment can be Direct and Indirect and it can also be Public Investment and Private Investment.
a) Direct Investment: In Direct Investment the control over the capital lays in the hands of investor.
b) Indirect Investment: Where as in Indirect Investment the investor just has some shares, just like a sleeping partner.
a) Public Investment: In Public Investment the investment is done while considering the needs of the peoples. It is important in accelerating economic development.
b) Private Investment: In Private Investment the investors invest in the fields which they think ...