The Current Need for External Financial Resources in Developing Countries

In chapter 2 an attempt was made at presenting the theoretical justification of the need for foreign exchange flows to developing countries. It was noted that the contribution of foreign financing to growth is usually expressed in terms of supplementing domestic savings and removing import bottlenecks. In this chapter, attention is turned to the current need for foreign exchange and to projected future needs. Before proceeding, however, it might not be inappropriate to re-emphasize the urgent necessity for growth in the group of countries under consideration.