corporation activity thereintheformofmergers andacquisitions andinterfirm agreements. TheExecutive Director saidthattheprospects fortheleastdeveloped countries werebleak, andcalledforaconcerted international effort, initiated by theCommission, toaccelerate theflowofforeign directinvestment tothose countries. 7.Theawareness ofmanydeveloping countries ofthepotential oftransnational corporations tocontribute totheirdevelopment continued tobewidespread. Delegations notedarapprochement between homeandhostcountries. Although during thep~stfouryearsforeign direct investment indeveloping countries hadrisenin absolute amounts, exceptinthecaseofLatinAmerica andtheCaribbean, their declining shareofworldflowswasamatterofconcern. Several delegations and theexpertadvisers stressed theneedforanetpositive transfer offinancial resources todeveloping countries. Manydelegations stressed theneedtoenhance thecontribution oftransnational corporations intotheresolution ofglobal economic problems. Anumberofdelegations expressed theirconcern aboutthe growing impactoftheactivities oftransnational corporations oneconomic development worldwide,particularly indeveloping countries, andoninternational economic stability. 8.Arecurring issuewastheimpactofpolicies instituted bymanydeveloping countries toattract transnational corporations. Thosepolicies werereflected in theadoption bydeveloping countries ofnewlawsrelating totransnational corporations andinincentives designed toattract foreign direct investment that included fiscal andotherbenefits andparticipation inbilateral investment -16- -.......-_--------"'---_ ....._--~-"., ,.''''... treaties. Theresults oftheefforts sofarweredisappointing andmanydeveloping .1 countries hadfailedtoexperience increases inforeign direct investment flows. j ) ! j9.Anumberofdelegations expressed theviewthatevaluation ofthechanges introduced bydeveloping countries wouldtaketime,however. Investments by transnational corpo~ations werebasedonconsiderations otherthanderegulation, suchaseconomic andpolitical stability, predictability andlegalcertainty. The qualitative aspects oftheactivities oftransnational corporations werealso important, andthegrowthofnon-equity arrangements mightallowdeveloping countries tobenefit intermsoftransfer oftechnology anddevelopment ofhuman resources. Nevertheless, changes inpolicies andattitudes ofdeveloping countries alonewerenotsufficient forincreased foreign investment activity. Economic growth wasneededtomakedeveloping countries moreattractive toforeign investors. Inaddition, policies indeveloped countries mightneedtobeevaluated inordertostimulate theflowofforeign direct investment todeveloping countries. 10.Theprospect ofaunified European Economic Community wasofinterest tomany countries. The1992process wasseenbyitsproponents asinvestment-creating, resulting inamarket morpefficient, technological andopentothirdcountries. However, theimpact onthosecountries, especially developing countries, depended toasignificant extent onwhether thenewintegrated market wouldprovide more attractive investment opportunities within Europethanelsewhere orwhether, on balance, itwouldgenerate newforeign directinvestment todeveloping countries. Onedelegation stressed theimportance oftheeconomic integr~tion process inthe Maghreb region andthepossible effects onthatprocess ofsimilar developments takingplacebetween certain developed countries. TheUnitedNations Centre on Transnatl~nal Corporations couldstudythatquestion inthecontext offoreign directinvestment flowstodeveloping countries. 11.Somedelegations saidthattherehadrecently beenamoveintheircountries, aspartofoverall economic restructuring, towards improving thelegaland regulatory environment withregardtoforeign company participation injoint ventures withco-operative andStateenterprises. Anumberofdelegations outlined
**Analysis**
The text discusses the role of transnational corporations in economic development, specifically in developing countries. It highlights the challenges faced by these countries in attracting foreign direct investment and the need for a concerted international effort to accelerate the flow of foreign direct investment. The text also touches on the impact of policies instituted by developing countries to attract transnational corporations and the importance of evaluating these changes.

**Category**
Economic development, International trade