During the 1980s, there was growing disenchantment with both the performance of public enterprise and the heavy burden they imposed on government finances. The result was a reappraisal of the role of the private sector, both indigenous and foreign. Although some of the negative perceptions of transnational corporations may still persist, many governments came to terms with the fact that the potential benefits that can be bestowed by foreign investment (additional equity capital, transfer of technology, access to managerial skills, creation of new jobs, and access to overseas markets and marketing expertise) were crucial to their development.
2. Capital invested will be largely money wasted if it comes before the creation of a sound infrastructure. There is quite enough capital in developing countries to establish the appropriate industries and infrastructure necessary to enable the poor majority to produce for themselves the things that they need for a low but reasonable living standard. That capital is currently being absorbed in part by foreign investors to produce highly inappropriate goods. From 85 to 90% of the funds raised by foreign investors to invest in developing countries is raised within the Third World, usually as loans from Third World banks. Within developing countries the capital is usually held by a small privileged class which is uninterested in investing in ventures conducive to more appropriate forms of development of value to the poor majority. Such capital is rendered unavailable because it is lent to foreign investors, used in speculative ventures or to purchase more land or imported luxuries, or sent out of the country to secure foreign banks.