Economic Development Finance

the biggest problem faced by less developed countries in financing development is…?

please helpp me with this huam geography question!

the options are
a) confrontation with more developed countries
b) identifying unique economic assets
C) inability to repay loans
d) promoting self-sufficiency
e) currency inflation

Well, it all depends on the country. Each country has its own problems but in order of difficulty I would say:

a) Inability to repay loans
b) currency inflation

c) promoting self sufficiency
d) identifying unique economic assets
e) confrontation with more developed countries.

I’ve split the answer intwo two paragraphs because a & b are by far the biggest problem- financial and economic problems and worries about debt service are the biggest stumbling block in getting an LDC to grow. Although assistance from Supranationals such as the World Bank, EBRD etc is forthcoming it is not easy and the following have to be in place first:

The last paragraph c,d & e are achieved by the many financial aid programmes in place and by foreign investment. Free Trade is the mantra these days and so is Fair Trade. Again, advice & assistance is available from the Supranationals and also international banks who can introduce foreign investors from developed countries to invest in LDC’s. This happened a lot following the fall of the Berlin Wall in the late 80′s in Eastern Europe. I wrote my thesis on the developments.The major problem for foreign investors was the worry about the convertability of the currency, legal issues in repatriating profits and of course, the competence of the governments involved.

There was also resentment at multinationals coming into the country and “taking over”.

Hope this helps!!! Good luck.

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