ABSTRACT
This chapter examines how investment and pricing policies have changed since the mid-1980s, and how political and economic reforms have interacted in the process of pricing and investment reform. Economic rules are made in the political arena and changes in pricing and investment have mirrored domestic and international political changes. The chapter focuses on an analysis of political process in making these decisions. The two-tiered system was far more modest than reforms in other components of the economy. Prices listed in the cataloguing system have been used as a base to calculate power tariffs for 'electricity produced by generation capacity that was financed by the State and managed by provincial power companies'. Foreign direct investment was made possible by the changes of general economic guidelines, from 'socialist planned economy' to 'socialist market economy', adopted in 1993 by the central government and the Party.
