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of FDI inflows [4] . The stock of FDI increased from USD 185 million in 1974 to USD 189 million in 1980. The share of total FDI in manufacturing increased from 20% in 1948 to 86.9% in 1980 (Kumar 1995). The data shows that British FDI declined from over 75% of all foreign investments in the 1960’s to around 50% by 1987, while shares of Germany, Japan and US steadily increased.

India’s ISI policy was riddled with contradictions. The assumption that domestic consumer demand and heavy public investment could provide the necessary stimulus to industrial growth was clearly misplaced. In reality, a skewed income distribution and negligence of agricultural development in the early planning process meant that domestic consumption could never play an important role. Moreover, the resources for massive public investment were raised by deficit financing and indirect taxation (Patnaik 1979). As a result, public investment was inflationary and unsustainable in the long-run. Thus, by the late 1970’s, the planning process was already showing signs of breaking down. The 1980’s witnessed a worsening trade balance owing to growing oil imports and a slow-down of exports. By 1990-91 the Indian government took the decision to liberalize its economy and undertake structural adjustment programs. An important part of this liberalization process was a much greater emphasis on attracting FDI.

FDI IN THE NEO-LIBERAL ERA

Brazil

After the debt-crisis of the 1980s, Brazil was persuaded to adopt neo-liberal policies. These consisted of drastic reductions in protective tariffs, privatization of state enterprises and the opening of many sectors for private foreign investments. These policies resulted in a notable re-appearance of FDI in public utilities and in the exploitation of natural resources. Foreign firms were allowed to participate in auctions for concession contracts in various fields of public utilities. Thus, public utilities which had accounted for 50% of the stock of FDI in 1929 and had dropped to 2.4% in 1992, rose to 25% in 2000 and then declined again to about 10% in 2010.

India

The 1990’s marked a major shift in India’s FDI policy. After having followed a restrictive policy towards foreign investment for four decades, India undertook major reforms in its economic policy. The new industrial policy of 1991 abolished industrial licensing requirements and eased restrictions on foreign equity participation.

As a result of these policies, FDI inflows increased steadily during the 1990’s and reached $ 3.6 billion in 1997. After a brief stagnation following the Asian crisis, FDI inflows picked up steam from 2003 onwards. During this period the share of manufacturing in total FDI stock declined from 85% in 1990 to 48% in 1997 (Kumar 1995, 2005). This trend continued even during the 2000-2010 period, with the share of manufacturing in total FDI inflows declining from 41% in 2005 to 20 % in 2008 (Dhar and Rao 2011) . At the same time infrastructure and services (banking and financial services, software and telecommunications) have increasingly attracted FDI inflows (Nagraj 2003, Kumar 2005).

FDI: A COMPARATIVE ANALYSIS

Both Brazil and India adopted an industrial development strategy based on import substitution. However, the policies towards foreign investment and FDI in particular have been very different. In the f本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。