Hanlon, J. William||Basti, Abdul Z.
M.S. (Master of Science)
Department of Marketing
Capital for investments in productive enterprises is essential for sustained economic growth. Private foreign investment is a key source of capital for growth, but there are many barriers to acquiring it. Some of the more important ones are slow rates of growth, rapid inflation, foreign exchange shortages, political instability and the threat of expropriation. The present study is designed to analyze the nature and significance of internal environmental factors that affect the risk and profitability of foreign investment in Chile. The present study utilized secondary sources of information, and relied on the background of the author as a Chilean businessman. Library research included official government publications and published literature of both English and Spanish sources. The author is fluent in both languages. The analysis of the present internal environmental barriers to private foreign investment in Chile revealed that the climate for foreign investments in Chile is favorable although the uncertain political climate at this moment may be a deterrent. An increasing economic development, better education, adequate economic, political and cultural framework favors private foreign investments in Chile. As development efforts have gained momentum, the trend of rising public expenditures has been intensified. Chile is, and will be, faced with the decision of either slowing down on social capital outlays, or attracting more funds to be made available for investments in directly productive purposes, if it is to achieve fast economic development. It would be unwise to increase the debt burden with further loans on conventional terms. Chile's economy must not only expand rapidly but must at the same time become self-reliant and self-generating. Development plans calling for growth targets linked with the objectives of achieving levels of income capable of assuming self-sustaining growth can only suggest sources of external financing must be increased beyond normal to meet the expanding capital needs. An essential source of capital is private foreign investment which brings not only capital but the badly needed technological resources as well. Catering to export industries, with export expansion and diversification, will lead to a narrower foreign exchange gap, making it easier for Chile to service the external debt. A continuing inflow of foreign investment would add to the strength already gathered as the stage of self-sustaining growth is approached.
Garcia, Alvaro S., "An analysis of the barriers to foreign direct private investments in Chile" (1970). Graduate Research Theses & Dissertations. 1122.
v, 80 pages
Northern Illinois University
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