Development - Least Developed Countries

The poorest and most economically weak of developing countries with formidable economic, institutional and human resource problems, which are often compounded by geographical handicaps and natural and manmade disasters.

In 2014 there were 48 LDCs.

Classification:
1. Low income - under $992 per capita
2. Human resource weakness
3. Economic vulnerability - instability of agricultural production, economic smallness

Causes of debt in LDCs

• US spent money so $ devalued
• US then used QE
• Oil tied to $ so oil value drops
• OPEC increase price of oil in 1973
• OPEC puts savings into western banks and gain interest
• Banks have to loan money to make back interest money 
• LDCs take out loans to develop industry
• Prices of commodities drop and oil prices rise so debt cannot be paid back
• So solution also causes debt

Consequences 

• conflict
• environmental degradation - overfishing, over cultivation 
• drug production 

Solution

• Default
• Repay
• Cancel - e.g. Jubilee 2000 wiped debts
• Restructure - e.g. allocate 20% of export earnings