Foreign Direct Investment & Aid funding in development sector

  • npopat
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Foreign Direct Investment & Aid funding in development sector

To development sector professionals,

a.How different is FDI & Aid funds (multi/ bilateral)?
b. Aid funds are project specific and do act as catalysts in developing economies, can they be considered as form of FDI?

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  • muench
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Re: Foreign Direct Investment & Aid funding in development sector

Dear Nikita,

I always try to ensure everyone gets an answer here on the forum. In general, I think you'll get more answers if you flesh out your question a bit more. What are your own thoughts on this matter and why do you ask?

There is a good Wikipedia article about Foreign Direct Investment (FDI) which can act as a starting point:
en.wikipedia.org/wiki/Foreign_direct_investment
The first sentence says

"A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country."


Then there is the article on aid: en.wikipedia.org/wiki/Aid

In international relations, aid (also known as international aid, overseas aid, foreign aid or foreign assistance) is – from the perspective of governments – a voluntary transfer of resources from one country to another.


So I think aid is not included in FDI. But I am no expert on this. Please tell us more.

Regards,
Elisabeth

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