One of the most crucial policy variables in the external adjustment strategy adopted by the government in Brazil after the first oil shock was the level of investment. The government made a fundamental contribution to the investment effort, as well as to its allocation among the different economic sectors, by providing financial support and subsidized credit to investment projects in the priority sectors. The task of undertaking structural change in an economy experiencing very adverse economic conditions, internally and externally, demanded a gigantic investment effort and an extremely difficult rearrangement of social, economic and political interests. There are basically two approaches to the analysis of external financing policies – i.e., the question of how much to borrow. A comparison between the real rates of interest on foreign borrowing and the rates of foreign exchange return on investment in the 1970s indicates that there was a strong case for Brazil’s growth-cum-debt strategy.