Poor Countries Attract More Private Money
PRIVATE money flows to the developing world have risen from $44 billion in 1990 to $167.1 billion last year, according to the World Bank. These private capital flows account for 72 percent of total flows to developing countries.
Meanwhile, foreign aid to developing countries has stagnated this decade. Rich nations and multilateral institutions gave a net $57.9 billion in loans and grants to poorer countries in 1990, and $64.2 billion in 1995.
''Private investment flows proved resilient in the aftermath of the Mexican crisis, especially in those countries with strong economic policies,'' says Michael Bruno, a top World Bank economist. ''The continuing trend toward globalization and active reform programs in many countries suggests a good medium-term prospect for sustained private capital flows to developing countries.''
In its latest World Debt Tables, the bank notes that foreign direct investment in developing countries tripled in the past five years. In 1995, this investment in offices, plants, and equipment reached a record $90 billion, up 13 percent from a year earlier.