101653 ATTACHMENT I PERFORMANCE CRITERIA STIPULATED BY HOST COUNTRIES M. Narasiroha.m PERFORMANCE CRITERIA STIPULATED BY HOST COUNTRIES Introduction: One of the issues identified by the Task Force as requiring further study is the stipulation of performance criteria by host countries on foreign firms investing in them. Such criteria constitute an aspect of host country regulation of foreign investment in the context of the macro objectives of their national economic policies which aim at augmenting national output and employment and attaining viability in balance of payments. Host countries naturally seek to weigh the benefits of additional income generation arising out of the foreign investment against its likely impact on balance of payments or on the growth of domestic (indigenous) industry so as to maximise what they regard the positive and minimise the negative aspects of foreign investment.* Performance criteria can (and generally do) take several forms but this paper focuses attention on the two *Performance criteria have been stipulated "in order to shift bene£its from trans-national corporations and home countries to host countries, to minimise the cost of private investment and to force investors (without, however, losing them) to contribute as much as possible to the achievement of the host country's development objectives". - K. Billerbeck & Y. Yasugi. Private Direct Foreign Investment in Developing Countries - World Bank Staff Working Paper No. 348 - Washington (July 1979) P. 19. "The significance is their(performance oriented policies) clear intent to shift toward the host country the package of benefits brought by the foreign firms" C. Fred Bergsten: Coming Investment Wars? Foreign Affairs, October 1974. - 2 - most widely stipulated forms of regu±ation.* These require: (i) that firms shift procurement of inputs to host countries as against importing such inputs; and (ii) that they export a specified percentage of production either by volume or value. 2. The Rationale for Performance C~iteria: The justification for the above mentioned type$ of performance requirements are based on the following objectives of national economic policy: (i) Increasing national output and domestic employment and protecting domestic industry. (ii) Strengthening the balance of payments. (iii) Controlling transfer pricing practices. (iv) Helping the transfer of technology. The application of performance criteria as an instrument in the achievement of these objectives is discussed below. 3. Performance Criteria and National Output & Employment: The contribution of foreign investment to domestic output and employment in the recipient country, both directly and through foTWard and backward linkages, is a point that does not need to be laboured.** Nonetheless, a major concern of host countries *Some of the other types of performance criteria are requirements that over a period foreign firms indigenise management and/or that the share of local capital in the total equity be increased to a specified percentage or restricting access to local capital/money markets. For other types of performance criteria, please see K. Billerbeck & Y. Yasugi's Op. cit. PP 19-2 **There has, of course, been a lively debate, perhaps beginning with H.W. Singer's celebrated article (American Economic Review 1950) about the impact on host countries of private foreign investment - 3 - arises from what is perceived to be inadequate secondary processing of raw material in sectors where one of the motivations of foreign investment is securing raw material resources. This leads host countries to indicate a phased program for an increasing proportion of local value addition to the product designed for export as against material export in rawer forms. In many LDCs where labour is surplus and underemployment (or unemployment)is endemic, labour intensive processing clearly makes sense. Even where the motivation for foreign investment is domestic market related, foreign investment tends to move into import substitute industries which invariably are built behind the shelter of tariff walls or quantitative import restrictions leading to generation of monopolistic/oligopolistic rents. If one accepts th.e logic of import substitution for the final product it follows that the import substitute argument can be extended to inputs as well. The stipulation of procurement of inputs locally thus widens the base of domestic economic activity and employment. ·It could raise the cost structure of production for the investor but this may not represent a greater 'tax' on the domestic consumer if its impact is only to cut monopoly rents. In any event,the extenialities associated with such a stipulation of local inputs by way of its impact on domestic production and employment has to be set against a possible higher price to the domestic consumer. Especially in those LDCs which have large and expanding domestic markets and have a developed resources base and labour availability, the attractiveness - 4 - of domestic input stipulation is readily apparent. A related aspect is concerned with the protection of indigenous industry in the light of the fear that foreign investment"tends to preempt the good investment opportunities, leaving only the marginal projects to domestic enterprise".* 'Ihe other related concern is with the impact of foreign investment on indigenous small industry. In India, for instance, certain industries have been reserved for the (domestic) small scale sector broadly on the ground that such industries are labour intensive and can be promoted through economically viable small units with relatively low capital-labour ratios. If the foreign investor (or indeed even the domestic large scale sector) wishes to manufacture items reserved for the small scale sector, such investment is permitted only if the manufacturing activity has a strong export orientation so that the apprehension of the foreign investment (with, in several cases, well known brand names) swamping the domestic market to the disadvantage of the indigenous producer. TI'le protection to the domestic small and medium sized industry derives from the viewpoint of enlarging employment opportunities, widening the base of economic activity and avoiding market domination by any single (or group of) concern. Export obligations thus fit into overall industrial policies by insulating, in varying degrees, the domestic market from the penetration of the foreign investor. *Bos, Sanders and Secchi: Private Foreign Investment in Developing Countries. P.25 - 5 - 4. Performance Criteria and the Balance of Payments: 1be balance of payments barrier to growth is a widely observed phenomenon and does not require much elaboration. 1he implications for inflow and outflow of foreign exchange constitute crucial elements in developing countries' planning of investment, especially industrial investment and approvals of foreign investment. Foreign investment in the extractive industries with an export motivation may pass the test though it may have other implications for national control and ownership of natural material resources. In service sectors, on the other hand, the foreign exchange outflow tends to make foreign investment in them comparatively unattractive to the host country. As regards the manufacturing sector, experience in a number of developing countries indicates that much of such investment in the early phase of their industrialisation represents import substituting investment. In such a situation, most countries either prescribe entry criteria to cover these aspects or tend, at the time of considering foreign investment proposals, to scrutinise the foreign exchange implications of a proposed investment - weighing the outflow on account of imports of raw material and components, the payment of royalties, technical fees and dividends against the savings in foreign exchange as a result of the import substituting effects of the investment, and the earnings of foreign exchange as a consequenceof exports of the product, in short to calculate (whether explicitly described as such or not)the foreign exchange cost benefit ratio. Hence the attractiveness of stipulating - 6 - either domestic input procurement or exports in the hope that the sum of the benefits would outweigh the costs. In several instances foreign investment is accompanied by restrictive clauses with regard to limiting exports either in quantum or to certain specified geographical areas as part of the ·foreign investors' global marketing strategy. LDCs have resisted this with varying degrees of success. The imposition of export obligations in some cases has gone hand in hand with such restrictive clauses.* *It is interesting to observe, in this connection, that among the ownership or firm specific advantages which Dunning mentions, two that figure in the list are "exclusive access to inputs, e.g., raw materials essential to the production of a product and/or control over market outlets'' Prof. John Dunning: Factors Influencing the Location of Foreign Direct Investment. Mimeograph (1979) P.21 - 7 - S. Performance Criteria and-Control of Transfer Pricing: One of the major areas of concern for host countries with regard to foreign investment is in respect of transfer pricing - to ensure that only "arms' length" prices are, in fact, charged. Stipulation of indigenous raw material procurement and local value addition stems from the desire to correct the distortions arising out of high transfer pricing. A tendency - perhaps less common now than previously - is for the foreign investor to write into the investment or collaboration terms the import of raw material, intermediates or components from specified sources - often from the parent firm or its affiliates - with its own implications for transfer pricing. The drug and pharmaceutical sector in several developing countries is a case in point. National policy in several cases has required that foreign investors not confine themselves to importing bulk drugs and converting them into formulations and packaging them but to go into production of inter- mediates and basic drugs. This follows from the perception that continued import of raw materials and equating manufactures with only conversion, assembly or packaging hardly represents acquisition of technology apart from providing the opportunity to the foreign investor to charge high transfer prices. Cases are not wanting where the foreign investor wishes to stipulate sources of procurement of inputs (from - 8 - the foreign parent or affiliate/subs~diary in third countries) and sometimes of capital equipment leading to suspicions about transfer pricing. The imposition by host countries of a local value addition stipulation acts as a defence mechanism. 6. Performance Criteria and Transfer of Technology: One of the considerations for the stipulation of export perfonnance arises from the host countries' desire to ensure the adoption and absorption of technology and to help domestic manufacturers to conform better to international costs, standards and quality. The stipulation of export obligations (in the absence of export subsidisation) is expected to achieve this. In several cases, foreign investment takes place to obtain an 'export platform' to take advantage of a host country's resource base and its labour force and organisation. The stipulation of export obligation in such cases, though seemingly reundant, is a confirmation by the host country of this objective. Export obligations would help to ensure that the product manufactured satisfied the test of price competitive- ness and quality. This explains also why some performance criteria set not only quantitative goals but also qualitative goals such as requiring export of processed and high technology exports. The imposition of such obligations also seeks to obtain the benefit for the developing country of access to the global marketing strategy of the foreign investor; a related aspect of this is the institution of buy-back arrangements between the parent firm and affiliate of the foreign investor and the host country enterprise, though this may have implications for transfer pricing. - 9 - Basically, the host country seeks to turn the foreign investments to advantage by obtaining a foothold in the international market. This assumes special significance in an environment of increasing protectionism in the international trade.* 7. Other Aspects of Performance Criteria: An interesting use of export performance criteria is provided by Indian policy which seeks to relate the .. quantum of export obligations to the extent of foreign equity ownership. Indian regulations prescribe that a foreign investor exporting 60% or more of his production is permitted to retain ownership upto 74% . On a sliding scale basis, if the exports are above 40%, foreign equity ownership of upto 51% is permitted. Industries in what Indian policy refers to as 'core sector' and those that require sophisticated technology are permitted to have foreign equity upto 51% if their exports are at least 10% of their production. 8. Performance Criteria - Some General Observations: '!he impact of performance criteria related to input procurement and export obligations on international trading patterns - in terms of distortions in the *"Intra-firm International trade does have anti- protectionist advantages" - K. Billerbeck & Y. Yasugi - op. cit. p iii - 10 - international trade flows - is difficult to quantify in the absence of adequate data; some qualitative observations may however be attempted. Performance criteria, as mentioned earlier, seem to serve the macro economic objectives of promoting domestic economic activity ru:id strengthening the balance of payments of the host countries. In doing so there could be a conflict between these objectives and international economic objectives. To the extent that host countries require export obligations or domestic input use, there could be some reduction in such activity in other countries with resultant impact on economic activity in them. Tiley could also lead to larger share in international trade of the exports of these countries than what competitive market trends might suggest. Tiley could lead to demands in other countries for countervailing or protective action.* The stipulation of input procurement or of local value addition is an aspect of import substitution and its distorting impact on international trade is perhaps no greater than that of import restrictions through tariff and non-tariff barriers on the final product. One is not writing on a clean slate. The alternative to local input procurement by stipulation could be import restriction on the * ··Stipulations that an investing firm export a sizeable share of output "go directly to the location of world production, jobs and the most sensitive aspects of each country's external position" C.Fred Bergsten loc. cit - 11 - inputs, which, of course, would have.- a more generalised impact than a covenant stipulating domestic procurement of inputs by a foreign investor. In the case of export obligation also some distortion to trade patterns is likely but here again the measurement of its impact is difficult. To say that export performance criteria should be insisted on only where the product is basically export worthy. in terms of costs and quality begs the question. If such were not the case, the stipulation can be complied with only by exporting on the basis of a subsidy, either overt or otherwise, with its own implications for distortion in the international trading pattern. The domestic resource cost of such products may not justify the export calling for subsidisation. Similarly, with respect to domestic procurement of inputs there is the danger of high cost industries being set up. Such distortion, it could be argued, would be deterimental to maximisation of global welfare as they negate the principle of comparative advantage. This calls for careful evaluation by a host country of the basic viability of the export and constant reappraisal of such stipulation. The necessity for obligation to export or use local inputs is itself an indication that, barring restrictive clauses, there is an economic cost in conforming to these stipulations. Whether this cost is justified or not depends on other objective of economic policy and particularly the foreign exchange situation. As the latter improves, there is a strong case for reviewing and reappraising the need for such obligation. - 12 - While the impact on internati-0nal trade both as between LDCs and the developed countries and as between LDCs themselves would be adversely affected to some degree, the stipulation of local input procurement and of exports have helped domestic economic activity and the establishment of an export base which over time could be sustained even in the absence of these requirements. In many developing countries, industries which started off as import substitute industries have now grown to a point where they do not require the earlier degree of protection and indeed have emerged as exporting sectors. 9. Conclusion: Performance criteria, in a sense, represent the obverse of incentives and constitute host countries' attempts to transfer to themselves what they perceive to be as much of the benefits of foreign investment without stretching these requirements to the point of positive dis- incentive to such investment*. *It should be added, in parenthesis, that such requirements are not necessarily confined to Direct Foreign Investment. Several countries impose such requirements in respect of industrial investment in general and these thus constitute aspects of industrial and trade policy rather than specific regulations governing foreign investment. India is a case in point. - 13 - Any impact of performance requirements on expansion of domestic economic activity and strengthening the balance of payments is clearly to the advantage of the host country but when such requirements begin to impinge on other countries - whether home countries or other developing countries - they have the same effect as protection or subsidies in altering international trade flows with possible consequences of affecting the international division of labour and going against the principle of comparative advantage. It is, of course, not always possible to deter- mine at what point these regulations become 'excessive' or when the situation calls for attempts to resolve possible conflict situations between the interests of different countries and to harmonise to the extent possible performance requirements preferably on a multilateral basis. In this as in the case of competitive incentives, or of home country policies to prevent relocation of industry towards developing countries, the attempt must be to seek an international consensus and a generally accepted code of conduct. Performance Crjteria in terms of exporj:s Qr import spbstituti on . --Ipdjan experi eoce. This paper seeks to set out the Indian policy and experience with respect to performance criteria in terms of exports or import substitution under its foreign financial and/or technical collaboration policy. The rationale for stipulating expert performance or import substitution criteria has been explained and the manner in vhich the foreign exchange situation, in particular, influences the policy has also been highlighted. 2. ~t the outset, it may be relevant to refer briefly to the foreign investment po.bicy of India. Foreign Investment has always been regarded more as a vehicle for the acquisition of advanced - technology that is needed by the· country but is not available indigenously than as a source for foreign capital to supplement domestic savings. It may J:e. said that foreign money capital has not played any significant part in India's industrial development. Over the years, the country has built up a :reasonably strong and diversified industrial base and has developed domestic technological capabilities to a significant extent. More importantly, it has built up a vast :rese~oir of scientific and technological manp~ner and skilled and semi-skilled labour. As a result, the areas where foreign technology needs to be imported either as a new technology not yet available indigenously or to upgrade existing local technology are increasingly beccMing selective and sophisticatedo Apart from the acquisition of advanced technology, the other pillar on whi\:h the : 2 : foreign investment policy rests is export oriented production. Foreign invest~nt is ~~!corned in ventures which are predominantly export oriente9, and in such ventures·majoirity ownership is also permitted depending on the extent of exports. A hundred percent export oriented venture can have even hundred percent foreign ownership. 3. Coming now to the ration.ale for imposing export obligations or import substitution when a new foreign collaboration is approved or an existing foreign co~pany (that is, a company wi.th more than 4o% f o:ceign equity) is given an industrial licence for the manufacture of a product, it needs to be made clear at the very beginning that an export obligation is not imposed as a matter of course in each and every case. Where such an obligation ~s stipulated, it is generally on account of one or other of the following factors: Ca) the foreign exchange situation (b) the impact on domestic industry and market (c) transfer pricing and (d). transfer and ~ absorption of technology. These are explained in the foll owing paragraphs. 4. Fran the late 1950s till early 1970s, the foreign exchange situation of the country was so stringent that the inflow and outflow of foreign exchange ·acted as a crucial factor in industrial approvals and investment decisions. The foreign exchange balance in te:rms of the inflovr of foreign exchange through export earnings or saving on current imoorts and the outflow on account of royalties, lumpsum.payments, technical know-how fees, capital goods and raw material imports, and dividends thus assumed considerable significante under industrial licensing or foreign collaboration : 3 : approvals. Since export earnings improved the balance and made the proposals acce_ptable f~om the foreign exchange angele, the export obligation was either off9red by the parties themselves or was stipulated as a condition of the industrial licence or foreign collaboration approval. It needs, however, to be stated that the export obligati·on was seldom unduly excessive or for unlimited duration. 5.· The significant improvement in the countfy'.s foreign exchange position since the early. 1970s has led to a reappraisal of this policy. Experience sh~d that in many cases, the export obligation had come to be imposed in a routine manner for the sake of "window dressing" the foreign exchange balance, although the products \•tere not economically export worthy or \\€re required on the domestic market. It was also found that such exports had resulted in loss to the company concerned on the one side and had absorbed governmental subsidies for exports on the other. With the improvement. in the foreign exchange situation, the present policy is, therefore~ that export obligations should not be imposed merely for the sake of earning foreign exchange or improving the foreign exchange balance of the foreign collaboration proposal. Such obligation should be stipulated only if the product is export worthy and the export is economically viable or if it is essential as a part of the industrial policy to safeguard the interests of domestic enterprises in thesmall or medium sector. In other words, export obligation will be a relevant factor under industrial licensing policy only and not under foreign collaboration approvals. In the'.' light of this position, past cases ~.vhere export obligation had been imposed in a routine way axe also being reviewed and the obligation removed wherever they : 4 : were unjustified on economic or industrial policy considerations. Thus, the earning of foreign exchange is no longer a determining factor in approving of foreign collaboration proposals but.it must be noted that this change of approach is the result of the comfortable foreign exchanqe position of the country. Such an approach may not be valid for a developiJ'.19 country in~he throes of acute balance of payments difficulties, · ' as India itself was until a few years ago. · 6.' The main consideration in stipulating export obligation now is the protection of the domestic industry, especially in the small or medium sector. Under the industrial development P?licy, certain industries have been reserved for in the small scale sector broadly on the grounds that they are labour intensive and can be promoted through economical! y viable small units requiring very low capital investments. Similar! y, the industries which are open to 11 Indian large business houses" and foreign companies have been listed, these a:re "core industries" considered to be vital to the national economy and requiring heavy capital· investments and advanced technology. If an Indian laX9e business house or a foreign company wants to manufacture items reserved for the small scale sector, i_t is pe:i:mitted only if the manufacture is entirely export oriented. Likewise, if they want to take up the manufacture of items not included in the list of "core industries" and outside the items reserved for the small scale sector, they I should 'export 60% of the production. It needs to be made clear that if a small unit takes up the manufacture of an item with for>-i gn collaboration or if an Indian large business house or foreign company takes up the manufacture of an item specified in the list of "core industries", no ' 5 : export obligation is imposed.· The rationale is that the small and medium ent¢repreneurs should be protected in areas which is within .-their capabi- lities frcm the onslaught of large business houses and foreign companies. Such protection is essential from the point of view of enla:r;gernent of employment opportunities, diffusion of . entrepreneurship, avoidance of market dominance and prevention of concentration of economic poi.·.ier. Thus, export obligation in these cases is an integral part of the overall economic and social policies· of the country. 7. .'Transfer pricing' is also one of the factors - albeit not a de·cisive factor - influencing goverrnnent policy in the matte·r of domestic production of the goods and avoidance of imports, especially from the parent companies. For example, in the. drug 'sector, the present policy is that the manufacture must start from the basic or intermediate stage because experience has sh01.vn that the import of bulk drugs for conversion into formulations is leading to high prices being charged for them, apart from perpetuating the manufacture of ~ formulations, requiring no sophisticateq technology~ ~;nod:heoc r !. ' i International Monetai-J Fund, Balance of Pa.,,V'!:lents Yearbook (washing-ten, D.C., various years). ~ Including reinvested earnings. ; l -7- Annex 2 TABU:: 1. - GEOGRAPHICAL SPREAD OF DIRECT FOREIGN INVESTMENT BY PRINCIPAL COT]}T'J:'RIES OF ORIGIN (%of total) Reel pi en t North United Europe C.E. South & Asia Africa Middle Country America States Central East America Country of 1968- 1973- 1968- 1973- 1968- 1973- 1968- 1973- 1968- 1973- 1968- 1973- 1968- 1973- 1968- 1973- Origin 1972 1976 1972 1976 1972 1976 1972 1976 1972 1976" 1972 1976 1972 1976 19i2 1976 United States 22.l 19.4 37.0 43.6 31.9 33.5 13.6 15.9 9.2 7.4 5.3 1.5 1.0 2.6 Japan 21.5 24.7 17.5 22.2 30. I 9.5 29.5 6.9 11.5 18.3 16.5 32.3 2.4 5.0 6.9 5.2 (e) (e) West Germany 18.2 20.8 8.9 15.6 61. 3 54.9 38.0 33.0 12.8 13.7 3.8 5.2 7.4 5.1 (a) (a) (a) (a) UK (b) 24.3 29.4 18.2 21.2 33. 1 31.0 27.4 24. I 2.5 5.6 5.4 4.9 18.5 18.0 O. I France (c) 7.8 18.o 25.8 31·.2 (d) (a) Asia, including Middle East ( d) 1968-1972 1973-1976 (b) Excluding oil sector Other OECD Countries 24.5 20.2 Rest of the world 41. 7 30.s (c) Excluding banking sector (e) Leaving aside investment financed through the London capitals market and a substantial project ... (illegible) •.• in the UK, the EC share was 4.4% and 5.2%, res~ectively. Comments concernin the countries of ori in: United States: (1) net capital outflows plus retained earnings. 2 statistical series which is adjusted from time to time. Japan: authorized direct foreign investment (shares and long-term loans). West Germany: net capital outflows. United Kingdom: net capital out- flows plus retained earnings. France: net capital outflows. General comment: the method of calculating net capital outflows varies from country to country. Sources: United States: USDC, Survey of Current Business. Japan: Bank of ,Japan. West Germany: Der Bundesminister fiir Wirtschaft, Vermogensa.nlagen Gebietsansassiger in fremden Wirtschaftsgebieten. United Kingdom: Business Monitor, a publication of the Government Statistical Service. France: the Notes Bleues of the Service de l'Information of the Ministry of Economic Affairs and Finance. -8- Annex 3 TABLE 7, THE SHA..RE RECEIVED BY DEVELOPING COUNTRIES OF TOT.ti..L DIRECT INVESTMENT JI.BROAD BY THE PRIVATE SECTOR OF DAC MEMBER COUNTRIES Annual Averages 1969-1970 1975-1976 Total direct of which Total direct of which investment in developing investment developing millions of country in millions country dollars share in t1f' of dollars share in % Australia 110 61 163 38 Belgium 85:": 32 224* 68 Canada 321* 17 599* 61 France 1 283 80 (est. 1127 23 Germany 790 32 2230 35 Italy 196>'< 61 251 "' 72 Japan 280 66 1878 35 Netherlands 512>'< 29 1104* 21 Sweden 225 14 513 20 UK 1314 20 2938 26 us 6662 27 13300 39 2 Others 57 40 304 3 27 All DAC member countries 10835 4 30 36 *These figures do not include retained earnin~s, which add up to very large amounts, but for which no estimates are available. 1. Including overseas departments and territories. 2. Austria, Denmark, Finland, Norway a.nd New Zealand. 3. Norway accounting for 130. 4. Excluding Switzerland (figures not available). Source: Balance of Payments Yearbook, Volume 28; OECD: DAC Statistics on financial resources contributed to developing countries. -9- Annex 4 TABLE 2. DIRECT PRIVATE SECTOR INVESTMENT (NET) IN DEVELOPING COUNTRIES 1970 TO 1977 AT EXCHANGE PRICES AND RATES FOR 1976 (millions of dollars) 1970 1971 1972 1973 1974 1975 1976 1977p Australia 236 99 187 145 129 50 75 78 Austria 11 7 7 9 7 33 17 Belgiur:i 98 54 98 66 60 69 236 -25 Canada 11 7 127 278 184 237 336 430 (360) Denl'lark 18 53 19 23 32 31 30 Finland 2 2 1 1 1 3 1 2 France 451 311 370 372 269 261 245 245 Gerr.iany 620 623 923 959 772 837 765 780 Italy 223 359 419 318 118 141 213 150 Japan 506 416 323 1589 739 234 1084 668 Uetherla..'1'.is 415 259 552 125 294 237 245 450 New Zealand -3 2 3 1 l 8 Norway 43 23 13 21 19 18 43 14 Sweden 74 74 70 31 62 87 125 116 Switzerland 126 132 124 106 149 209 226 203 UK 617 383 575 897 808 754 954 (560) us 2171 1829 1815 880 -1907 5626 3119 4500 All DAC member countries 5728 4744 5771 5726 1794 8901 7824 (8130) 1. See notes for Table 1. Source: Figures from DAC, OECD. -10- Annex 5 TABLE 10. DISTRIBUTION BY RECIPIENT REGION OF STOCKS OF NET ASSETS OBTAINED OUT OF DIRECT INVESTMENT BY PRIVATE SECTOR OF DAC MEMBER CO~TRIES In DEVELOPING COUNTRIES End 1970 End 1976 Recipient region Billions % of Billions % of of dollars, total of dollars total Eu!-ope 2.7 6.2 6.9 9. 1 Africa 7.9 18.3 9,7 12.7 Central America 8.6 19.8 18.5 24.3 South America 13.8 31. 7 19.2 25.2 Middle East 3.4 7.8 2.2 2.9 Asial 7.0 16. 2 25.8 19.7 Total 43.4 100.0 76. 2 . 100.0 1. South Asia, Far East and Oceania Source; Figures from DAC, OECD. ---·---·-----·---·--------------------- ------------------ -· - -~-------------- Table III-30 (continued) ·1 Total stock Stock in developing countries "" 1211 aZ i271. a/ i211 e.Z _.!.2-7~ oZ Country and inroad; for Italy: information sup11l1cd by Italian Forcian EY.chanee Office. Datu for other countries C3timated by the United Nat.iona Centre on 'lurnrnational Corporations. For further information on data, sec annex VII. Ai LEX 7 Source: United Rations Centre on Transnational Corporations, baaed on: for Argentina: information aupplied by Bubaecretar!a de Inveraiones Extranjerae, Gover11J11Cnt or Argentine.; for Dra?:il: Banco de Brasil, Relatorio Anual, 1971; for Colombia.: Ranco de la Republice., Reporte Anunl, 1915; for Hong Kong: information suppliel\ by Trade, Industry and Comm~rce Department; for India: Department of Company Affairs, Ministry of Justice, Research Statietics, 19'r6; for Indonesia: Dank or Indoneoia, Indonesian Finllllcial Statieticn 1 1911; for Mexico: Banco de Mexico S.A.; infortlllltion •upplied to the United Nations Centre on Trnnenatiopal Corpora.lions; for Nigeria: Central Bank of Nigeria, Economic a.nd P'ina.ncial Revi ev ( vs.rious iueues); for Panwna: Eetadistica Pan1.U11af111., Balanza de Pngos (various issues); for the T>11ilippineo: Central Bank of the Philippines,' Philippines Rueinees Re~iev 2 {1917); for the Republic of Korea, Economic Pl1111ning Hoard; Economic Survey (v11.riouo iaeues)i for Bingapor~: Economic Development Board, Annual Report, 191~; for 'l"i1Aill:U'1J: Board of Inv"atment Planning Di vision, 11 Report for 1976". ~. /, A N N E x g DAC(79)21 Stat.1et1c•.1 Aruiex T&ble A. 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') 5057 ... 6 59 ~ • ' l'i.\ "· l orr.EXP\J~T Cfir!:OJ TS 51&.6 S•7·8 131!;. ~ 11'.! u. ti Zlt~.t J•97.2 OTH!;f. 84 .. 4 z90. 3 l)1 J. 7 1 J&J •• 8~ ~. 7 1'5'59.7 lllUL TtlATO 'L oar •lol l10o6 n.1 127·: 1? b. 7 156-1 or llHlCru JtJfoD •1.J l96·6 ·~l· l 2€..' l"LJ,l, ,9. 8 !~:.;~ti." ?'") ..."96.l fQflil,. orr.FLJ•S 1U41.l 7e95.1 1'61/.9 1697J> 8 &14•f s 9l 'IOLUN•Ali(NC• ! .... e57.5 u11rit..a l l 9~ .7 \•.ii c. i 1665.5 Fl OW:$ s•e• .1 no2.1 HlrriH.5 !?H'Jol 31227.7 ... 2l.2 "IUTE 16 ~J • .,, 94~lL l!U,.4 DI• £CT JOESTM(f'ilf H.JY.I 1689· 1 l·'tt9J.d !ii. au.a. r.PoRr,."LIIJ ~711.G 696· 9 sz3e.s 5233· s fOH9.3 20•11. & itlA.TTL.l'IJHfOLtO 555.6 • 111ri.1 l55L • i 3~ ·~&. f. :t.t.l,,.;. ?:'5\S.1 [JPO"U Cio(,JJT~ tS•i • .? 2141· 9 1141. 9 .602~ 6 1337. I 9697.0 JSl.C 1111ri. 0 llriSH'o & \4900. 0) 6 .5"9.4' 2H8'.I O' ... 11HltHi'10"ti:T .SECTD" CMlNG:: dJL.(lAl MS I• fJll(lti"I CUit ... U•·" ,.o 226.8 U6'1 •35}. 3 Ii.~ ,4 ia2. ~) ~ •II Sl'H. 6 .......: ; ?136.' 11'14'1 Cri • .\ OJ'lt,.S fl C cu1i•. '-'·• o.o •·O c.' 555.1 '" .. JL. ttJ•u:J. p OP rr Cl I a 'fJ,5 ·~l .. l U&.J 111 ... b• l ... !t4.ti..; JOflL ll(SQIJ9C[ n.ows ll7'5v • S 15754·8 40 ]~,, .1 111 5!'--0 '5072L5 71JB•. 9 ur . . 1 or G•P 0. 75 0.11. 1.05 o•.77 1.08 1.26 PAtCICT 1U1tfl' I lf'F"JL. stii ei •# ADJUST.,~S:JUfiCE f'LO• ,,0$$ DU .. UPi(M(Nf$ ronL orrt c1.-.1.. &19~.l 9996. 9 ll 212.. 7 !l 56S9 2..'1.'J.J .!t 969. J OHtCtAL lL;'.ASSlST. 1 liob.1 1590.' I 4997. 8 l'l .5 Uj.i, l b0 .. 1. t> Zlsr::i.i OTH!9i OrfJCIH FL') 1tS 14 31.S 2'396. 5 bl 1 ".J. l &C60.3 b d ! l. s 9HO.t •( lll i)(t !I.. OP-it IH 1..0& NS .::~6 ... e !185.3 l l l e. SJ l. 9:;. 7 ?n-..t 4673.3 TOUL Ot~ T 1 t:O~GlHISTo J 9v. J ll~ .. , 1 \ s.. 6 19 ~ • 1 9l 'l • ., i 2&5. 2 fOJIL f'OO!l •ID 4• 1.1 C.N.,) ua~ ..4 1eu.a ~2 ~01L7 zt 79.1 orrtcr n ri:P.cr.~ons 115 s. 9 l Sl t. J 3'19. 9 J77~. t. " .,~. ·.• l ~-' \l 31. ! 3 7'1 •• 1451.l Tf:t 1J. ~ H6~.l (II 3·~ 1. s '5 l to,, • .3 Q l 5 & • .'.! 6 jJi.. t ~ 1 ~\ '5 .1 7167.' ClfNE' orr .rL1J•S 1 !.I.~ l 07'. 4 t1 'l " ... ~ 1Nf[R01' J(H' lH.1 H~. l ~b ., ~ • .:~ ?St.? ~82L J •O "If Jill ST". OP( lllSC:: S H.l) 119.) .... t. 9 !') ~ • ; Z.l/.) P-.NN:::X 9 !abl• J:.1 :S :ill.ion Debt Ov~r:teas (diabu:-:oe-d) O..bt Se:-vice Direc"t end 1977 ill 19n C'J•ulative Iz:ve3t:aent.s Country or Territory ~ants {PODI) 1960-1977 stoelc o! 'llih.1.cll o! w1ch end 1977 Tot.al DJ.C/OD>. 1'otal DJ.C/ODA (1) (2) (3) (4) (5) (6) TOTA!.. 100,657 84,996 264,422 40, 904 41,227 1,965 >.! 6-"uln 1 :> ta!l 605 20 1,059 180 3S 10 A.lge:-!.a 2,903 360 10,065 344 1'409 14 Angola A.nt:!lle3 (Netherla:ads) 90 223 ( 100) 2,000 120 270 3 150 28 28 - 6 .\rgentilla 200 2,850 6, 160 120 1 ,386 8 3.aLamm:s 6 1(470 39 - - 50 - 3ah..~i.:I 3ang~desb. 203 1,849 200) 80 217 2,305 1,290 39 83 16 - Barbados 22 160 60 13 11 1 :3eli%e 79 70 9 5 2 x Benin 365 33 137 50 12 3 3er-:iuon 783 355 825 165 79 8 Cape Verde Ce:n"'::-al A.:!'rican 60 - - - - - :::::l';lire 404 65 137 42 7 2 Chad 554 25 115 •5 12 1 Ch!l.e 522 1,215 3,TT3 888 857 75 Colol!lbia 579 1,410 2,956 889 399 39 Como:r:J :3land:s c.,ngo 119 401 - 165 39 581 71 5 1 73 x 3 Cos1:.a :Uca 155 . 270 752 73 106 2 <='-"!>a Cyprus 112 315 - 85 2,906 222 25 15 304 34 x 1 Djibouti 187 12 27 25 4 1 Oom:!.n.ica.c Repu~l1c 316 370 664 204 99 12 Ecuador 257 580 1,345 145 158 9 E:gy;:it 4, 722 217 a., ~40 1,504 1,050 63 E1 Salv;idor 157 140 303 61 71 3 -...: Eth.!.opia 649 (99) 472 is1 32 8 Falkland !!!land.!! F1j1 15 147 - 200 x 88 x 19 - 10 - 2 Cabon C111111bia ('De) 338 71 740 14 , ,281 28 ,, 55 240 1 s x Chan.a Cibral tar 364 34 2n 28 791 8 395 4 , 3S 18 x CJ.lo.,:-: Island!! Gr~~ce 3S 225 - 950 - 4,267 - 159 - 866 23 - Gu.adelou;:i,. 983 50 172 122 21 11 Cuatf!'!!lala 270 270 376 69 47 3 Cu!..:iea 137 i'.?8 817 113 155 6 Cu!..=e-e (!:qtat;iria:) Gu!.:!ea-B'!.3!t3U 46 5 20 - -3 -, x 1 - - Gu.iLC.a (,-:-~ncl:) 388 35 29 26 3 2 I - - 2 - :--01. ~.1 (cont'd): STOC?\ OF ~.u. ?_ESOUP. CES -'! E:llD 1977 A..'iD w:!::E'!' S~V!C'E IN iiZZ $ JL1ll1oo Ove?"':sea:s O..bt Oebt ~::-vice D!:-ect (di!!"::>u.-sed) ill 1977 Cl..tmulat!ve I::vest>oent.s and 19Tl CoUlltry or Territory ~-.s (?ODI) 1 977 .stock o! whicb ot Yhic.b and 1977 Total DAC/ODA Total OAC/OD>. ( 1) (2) C:5) (4} (5) (6) Guyana 9i 210 428 109 46 6 !'.ait1 zoo 75 izz 24 io x Honduras i74 250 475 67 53 2 Rong Kong 45 1,730 776 3 102 x Inc:Ua 7,365 2,450 14,928 8, 105 935 366 !Ddonea1a. 1,857 5,160 12,041 4,173 , ,371 149 Ir-all I:rsq I.srael 357 144 2,284 (1t~~ 920. 8,311 1 ,625 5,105 187 110 1 ,382 1 ,987 668 664 25 4 e.a i Ivory Coast S06 500 2,132 194 299 11 Jaaaica 83 ' 150 5 129 900 932 .Jore.an 2, 162 (70) 864 262 51 s lta.mpu~aa Kenya 6B6 872 - 510 36 1,142 31 325 x 99 x 20 Korea (i'!!!pu'blic ot) 2,455 1,280 9,066 2,195 1,254 106 ~it Laoa 11 946 (160} - 194 1.8 - 44 16 109 3 49 , - r..banon 383 (100) 144 3 ~aotbo 238 4 22 1 1 x u:ieria 199 1 ,035 514 105 86 5 w. bya.o ..u-. !:> Republic Macao 255 1 530 - 594 5 - - '-58 3 - - l'ta-agascar 836 160 217 71 23 4 Malawi 324 100 357 178 18 6 k.laysia 398 2,700 2,645 332 - 500 18 Jl!a.ld.1 V!!!I Mali 11 677 - 10 1 459 1 54 lit 12 x 2 Malt.. 279 103 51 21 3 2 Martinique Jlta u.r! t&ni a , , i64 543 - 25 131 457 92 26 18 42 10 5 Mauritius 125 23 75 21 15 2 Mexico 2'4 5,070 25,500 108 5,219 13 .Morocco 1,283 325 3,608 749 307 32 Jl!.oza.m'bique Nepa:t 1'-8 435 ( 100) 10 87 72 4 14 17 2 - 1 NeY C&l !!don1a 400 140 152 140 18 10 N"" !iebride" 102 35 7 7 x x Ni::aragua 135 90 868 1}4 101 4 Niger 757 80 209 102 i7 3 Nigeria 738 1,040 , '764 384 735 a:!!_ -.: 22 "' O.an Paci:!'lc Island.a 303 738 (50) - 578 x - - 128 :z - - Pale is tan 2,959 760 6,850 3,816 391 160 ?s.naaa 194 2,750 1,453 1C8 173 3 Papua Nev-Cu.1!lea 2, 190 800 355 26 51 6 I 36 Paraguay ? .. !"'U l'?U :.i:;:>p 1n u 1~ 523 1 ,206 1CXl 1 .930 1,620 356 5. 11..8 4,711 88 255 561 696 533 " 16 2'4 Polynesia (P":-11nc.b) :x,o· 40 66 53 6 3 ?ortu.o.al 49 450 2,549 151 299 ,3 ! I --. 3 S •ill.ion Ov"rseaa Do!bt Debt s,,rvic" Dir=t (cU.sbu:-~..C) in 1977 Cumulative I:iv!!~t::ent.s end 1977 Country or Territory ~·s (PODI) 1900-1977 stock o! vb.ich o! .,.......I.ch. end 1977 Tot.l DAC/OD,\ Total D>.C/ODA (2) (3) (4) (5) (6) Qatar 7 ( 100} 143 Rew:...!. on 1,715 130 29 16 Rhodes!.a 43 (350) 11 5 Rwanda 475 25 14 2 x Sao TOlll& 8.lld Principe 3 Saudi Arab!.a 56 (215} 1,537 9 1,046 Senegal 1,060 350 479 100 66 4 Seycllelle::1 Islands 73 11 4 1 x x Sierra Leone 136 80 207 49 28 2 Si.:lgapo:-1t 103 1,500 1,087 92 135 ·5 Solomon IslaDd.s 139 14 9 2 x Somalia 663 98 422 38 12 1 Spain 175 5, 114 10, 963 132 1,598 24 Sri L.a.nka 506 65 799 450 137 20 St. Hele!la & Depen- dencies 21. St. ?ie~ & !Uquelon 74 n 3 x SudAn 674 55 2,035 136 5 Suri.nalll i.53 380 117 x Sva::!.18.lld 123 45 55 5 3 Syrian !---ab Republic 1,812 (70) 1 ,551 137 1 Taiwac 530 , ,720 2,955 - 102 567 23 Ta.c.:: .ull.a . 1,122 160 1, 173 412 42 9 Thailand 874 400 , ,815 297 401 21 Tim or x ~ogo 328 95 331 73 27 2 Tonga 18 2 2 x Trill.!.dAd & Tobe.go 61 1,260 261 17 15 TwUsia 1, 170 260 2,005 800 190 Turk!!y 1 ,019 500 5,300 1, 75<3 4-lo8 Ugand.:it 274 (7) 247 &3 28 Unitetl Arab Emirates 57 (150} 1, 1-88 1 310 Upp.,,- 'lol ta 617 20 133 52 7 2 Ur.iguay 103 290 71.8 72 249 4 Vl!'!n~zu~la 171. 3,300 5,724 28 1, 160 8 Viet::ain 6,808 535 204 20 x Wallis West Lcd11ts & Futuna 13 399 8}0 x 52 . 31 x 8 , x 'l'!!ste!"'!l Samoa 35 37 3, Yemen Arab Republic 734 315 74 8 1 Yemen (?DR) 4.41 307 10 6 x Yugoslavia 455 140 8,589 605 , ,583 66 Zaire 2,017 (1,110} 2, 759 205 160 a Zambia 490 315 , • 1681 113 205 6 TOTAL 87, !59 84,996 260,64.8 40,780 41,068 1,956 plus: Un.allocat&d. 13,098 3,774 12<. 159 9 GRAND TOT.AL 100,657 264,422 41 ,227 1. 965 Source: Calctils du CAD de l'OCDE