In contrast, between 2000 and 2004, foreign investments in developing countries stagnated and those in the OECD declined following the bursting of the dotcom bubble (Figure 1). Yet, between 2004 and 2006, FDI to developing economies rose faster than the total, following the introduction of legal changes allowing majority ownership by foreign investors, liberalization of profit remittances and gradual elimination of clauses on minimum domestic content, minimum export requirements, exclusion of strategic sectors and indigenization of management (UNCTAD, 2007, table 1.8). This leads to the conclusion that FDI reduces income inequality in Iow-wage, labour-abundant countries by accelerating capital accumulation, raising the demand for unskilled workers and offering higher wages than those prevailing in the informal or domestic formal sectors.