Abstract
Privatization means a transformation from the public sector into the private sector by means of the sale of the losing institutions in the public sector to companies or individuals from the private sector. General transformation policy is known from socialist economies centrally drawn up various economies to the new liberal economic system. Countries have adopted form programs for its economies to enable them preparing the economy and the society for this transformation and privatization is the last stage in the process of transformation into free market system. Foreign direct investment is considered one of the effective factors in the growth and development of states and an index of economic ability to accommodate with the global developments, transformation towards market mechanism. The dominion of the multi-national companies upon the movement of commodities and services and markets' openness which contribute in increasing financial flows volume towards countries. FDI contributes in transforming technology and assists in compensating (lie deficit in local savings; therefore it is considered a financing source for them and can connect countries with a global production net. Thus care has been focused on suitable policies to attract foreign direct investments which are considered an incentive for growth. 1980-2003.
