Introduction

It is obviously not possible to furnish a complete list of the factors impeding the investment of foreign capital in the developing countries generally. These countries are widely different from each other in culture, economic potential, development, and many other respects; and the factors tending to limit the flow of foreign capital to the developing regions are likewise of varying character and origin. The complete or partial elimination of some of these limiting factors may or may not in fact improve the rate of flow of foreign capital, for remaining obstacles may still keep the flow at a low level. But most of the countries need to eliminate one or more of the more effective impediments if they are to increase the flow of foreign capital.

The present study deals only with those impediments which could be removed through legal reform or state guarantees and incentives. Sudan and Saudi Arabia have attracted a considerable amount of foreign capital, yet it remains true that investment of foreign capital meets with impediments. The removal of these impediments is more important than the creation of new incentives; because the former tend to stifle the effect of the latter.

This chapter will now describe the obstacles that might still be encountered by the foreign investor in Sudan and Saudi Arabia. Not all impediments are pertinent to each of these two countries.