ABSTRACT
The need for external resources increases sharply with growing investment in developing countries. Dynamic programming can determine the optimum distribution of investments and allocation of both national and external resources, once the objectives and the availability of resources are given. The recognition that substantial additional external resources are needed to raise the rate of growth of less developed countries led during the last decade to several attempts to estimate the amount of foreign capital inflow required for this purpose. The scarcity of foreign exchange—which may be even greater than the scarcity of other resources—explains the need for planning their use. All estimates involve in the nature of things oversimplifications accounting at best very slightly for those human, institutional, structural and social variables which have a preponderant influence on absorptive capacity and the rate of growth. Planning the use of external resources should proceed—like the estimating of the need for them—according to the program, and not the "single project approach".
