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Saturday, July 14, 2012

Development and freedom

There is a common view that a poor country can either have freedom or it can have development, not both at the same time. This is wrong because multifaceted freedom is both the objective of development and the means by which it is achieved.

Friday, July 13, 2012

Promoting investment (not just FDI)

Investment promotion is often seen purely as encouraging foreigners to invest in a country, especially in the form of foreign direct investment (FDI).

This may be necessary if a country is so poor that it has no domestic investors. But this is rarely the case. Many poor countries have unequal distributions of income and wealth so that although their GDP per capita is low there are some very rich individuals and families with fortunes that could be invested in their country. It's no surprise that those fortunes are often invested outside the country. This isn't just a case of ill-gotten gains from corruption being hidden in Swiss bank accounts to provide income in case a crooked politician has to flee a coup or a rebellion, though this is probably more common than it ought to be. There are also people with legitimate savings who see no future investing in a country where the returns are low, high-risk, or both. The result is capital flight.

Investment promotion ought to address capital flight as much as it seeks to attract FDI.

Tuesday, July 3, 2012


The slogan of Growing Capacity, Inc. is "Invest for Development". "Development" here means more than economic development. It means the development of capacity of a society to provide opportunities for personal fulfilment. For this to happen, there has to be sufficient social capital to provide everyone with food, clothing, housing, education, healthcare, decent work and decent leisure. To devise policies to ensure this, we need to have an agreed and reliable way of measuring what the situation is now and how successful we are in improving it. That isn't as easy as it may sound.

Monday, July 2, 2012


I used to work at places with long names that were not easy to summarize when introducing myself. Say, for instance, I was meeting someone at a party or talking to a stranger at a bus stop. Unless they were working in the same line of business, it would be a bit of a mouthful for me to say,"I'm senior economist at the Vale Columbia Center on Sustainable International Investment under Columbia Law School and the Earth Institute at Columbia University" (up to last September) or "senior economist, principal administrator and head of global relations in the Investment Division of the OECD" (from 2002 to 2010). Even if they knew what Columbia University or the OECD was, probably the only word that would register would be "investment". So I might often just say,"I work on investment policies". The response would usually be something like "my cousin also works in an investment bank" or "so  you can tell me what to do with my pension, then?". And I would have to explain that I wasn't working on exactly that kind of investment.

So what sort of investing am I referring to in the slogan "Invest for Development"?

What this blog is for

Growing Capacity, Inc. is a consultancy founded by Ken Davies in March 2012 to promote investment for development. Its website www.growingcapacity.com explains its objectives and methods very briefly.

The aim of this blog is to expand on the ideas that you will find on the website and to provide a forum for discussion on issues related to investment for development.