ABSTRACT
Let us first consider the need for capital irrespective of the extent to which it is given on aid terms. (For the moment, we shall refer to public capital as aid, whether or not it is subsidized.) The problem has been deferred until this late point, because one cannot approach an answer, until one has discussed the purposes of supplying capital, the trade problems of the underdeveloped countries, and the problem of absorptive capacity and all that affects it. We assume that capital is given or lent for development, or to prevent decline, and we shall deal only with such flows.1 Thus, as usual, we are not concerned with military aid. Nor do we attempt to assess needs on the basis that money should be given or lent without distinction between con sumption and investment. Clearly, there is virtually no limit to the amount needed, or that could be usefully given, if we counted direct contributions to the consumption of the underdeveloped world. In fact, i t is only within the context of development, that needs can be quantitatively discussed.
