Page:Pentagon-Papers-Part-V-B-4-Book-I.djvu/231

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011  resources to provide medium and long-term credit to meet needs for industrial development is considered desirable.

(4) Initiation of an effective research program applying professional techniques and practices to identify and promote investment opportunities is also suggested.

If private investors can be attracted to the priority industries, the great bulk of profits can become government revenue or private savings. By comparison, large public sector investments that do not produce comparable surpluses clearly do not provide the same kind of help for sustained development.

c.

Public sector investment may be undertaken for a variety of reasons. For example, private capital may be unwilling to invest its limited savings in project that require several years to complete and that sometimes offer uncertain business prospects thereafter. It has been found that public sector investment often stimulates private investment. Within limits, the one complements the other. But public investments in productive enterprises will serve the economy less satisfactorily than private enterprise unless prices are set to cover full costs and produce comparable surpluses.

Where public investment is necessary to initiate or promote productive enterprise, such investment should as public policy be on an interim bases. At the earliest practical time, public investment should be converted to private investment. Rh