Capital Flows such as foreign direct investment (FDI) and foreign aid supplement domestic resources for the economic development of Less Developed Countries (LDCs). However, FDI is regarded to be more costly than beneficial to developing countries for the development process.

1. (a) Discuss strategies that LDCs might adopt to make foreign investment fit their development aspirations better, without destroying all incentives for foreign investment. Give various country examples to support your answer.

2. (b) What are the motivations for giving foreign aid to developing countries? What are some of the important areas foreign aid can be used to assist the economic and social needs of the nations?

3. (c) What are some of the differences between official development assistance (public aid) and private development assistance from nongovernmental organizations (NGOs)? Which type of aid is more desirable from the perspective of recipient

4. (i) How important is foreign aid for developing countries in relation to other sources of foreign exchange?

5. (iii) What are some of the important areas that foreign aid and foreign investment can be used in developing countries to assist the needs of these countries?