ABSTRACT
This chapter aims to analyse, with particular reference to the underdeveloped countries, the nature of some of the political and economic problems that bedevil the relationship between an international firm and the countries in which it operates. It begins with a brief description of the large international firm and of the contribution expected of the foreign investment that it undertakes. Control over affiliates of international firms in a foreign country is also used to achieve the economic as well as the political objectives of the parent country. In 1958 the only important refineries in India were subsidiaries of major international oil companies, who had a few years earlier established these refineries at the request of the Indian government under special refinery agreements with the government. Before 1963 the internal distribution of petroleum in Ceylon was exclusively in the hands of three international companies who owned all of the distribution facilities in the country.
