This short paper explores the complementarity between foreign aid and foreign direct investment (FDI). Recent studies on aid concluded that aid should come to an end or be reduced with a radical modification of the terms and conditions and FDI and trade should replace aid as the engine of development. In this paper, we argue that aid complements FDI and advances the efficacy of FDI in promoting...

The process of internationalisation or ‘globalisation’ involves a thorough transformation of the Australian economy from being inward looking and protectionist, to being externally oriented in both trade and investment. The process has been helped along by the liberalisation of capital markets and the removal of barriers to trade, but other factors such as technological advances and innovations...