economic obstacles

In developing the country, there might be some resistance that hinder the development to foster. here, we are going to discuss two problems in terms of economy.


1)NATURAL RESOURCES- some of the countries are having problem to foster their country's development when they are lacking of the resources like land. Land is the most important element that a country has. With lesser lands, there will be significant fall in cultivation activities which are the main source of income for poor countries such as India. Even though, they have been criticized for encouraging sugar cane and oil seeds instead of rice, wheat and cotton which have more comparative advantages.Also the farmers could not reap the benefits from the farming activities because of the lands that have been fragmented either through force by government to ensure fairness of the society or pass on from one generation to another like in Zimbabwe, large-scale has nearly collapsed of the last nine years under the government's controversial land reforms.On the other hand, Singapore need to focus on maximizing the level of technology,manufacturing especially since they have lesser lands. They have to build taller buildings as to maximize the place for living for their citizens. Other than having inadequate resources, untapped resources is another problem in the economics. most of the poor countries have the natural resources. Lacking R&D is the most possible reason why the resources are not fully discovered as in Zimbabwe also. No commercial deposits of petroleum have been discovered, although the country is richly endowed with coal-bed methane gas that has yet to be exploited. With the inefficiently managed the resources, it will also hinder the economic development. Many poor countries might be inefficient in production and allocation. we take back Zimbabwe as the example. it has corn as the largest food crop but since the government has management that has exacerbated meager corn harvests in years of drought or floods, resulting in significant food shortfalls every year since 2001.


2) LACK OF INVESTMENT- Generally, there are two ways for a country to generate fund. it comes from foreign loans and foreign private investment. however, these two ways have their own problem for funding those countries especially less developed countries (LDCs). Through foreign loans, for financing LDCs, the flow of capital comes from individual national government, multinational assistance organizations and multinational companies. the individual national government usually give financial assistance to LDC's mainly for their own economic and political interest. As long as the developing countries are protecting the interest of the donor countries, the flow of capital counties. it normally will be stopped or slow down when the recipient country is no longer benefit to them. As America has stopped from financial assisting Pakistan after Afghan War was over. That is why developing country cannot be dependent too much on foreign aid. sometimes, to get foreign aid, the developing countries need to accept unnecessary requirements from the donor countries. that also contribute to undeveloped economic developments. the multinational assistance organizations also did quite similar action to poor countries like World Bank and International Monetary Fund(IMF). These organizations are mostly funded by developed countries which literally do it for the sake of their economic and political interests. All developing countries including Pakistan are now knee deep in the debts of these organizations. as explained earlier the problem occurs will affect economic growth of poor countries including the problem of debt servicing and rescheduling. from multinational companies, they usually search for country which has transportation, power, cheap force labor and raw material. so, generally these companies do not help much in establishing development in developing countries' economy. therefore, the problem of lack of proper investment remains in developing countries.


Manager: Nur Atiqah Bt Mohd Nasri