chapter  5
31 Pages

Domestic Resources For Development

Most LDCs mainly depend upon domestic resources for their development. Foreign resources and trade also play some part in financing the economic development of the LDCs, but a more comprehensive discussion of their role will follow later (see Chapters 6 and 7). At the outset, it is necessary to emphasize the importance of shifting funds from low to high productivity users and also the need for small farms and other businesses to have working balances and funds for new (and replacement) investment. Here we shall chiefly examine the roles of (1) monetary, (2) inflationary and (3) fiscal policies in financing growth. We shall first analyse some features of the money markets of the LDCs.