ABSTRACT
The plight of less-developed counties (LDCs) since 1980 has been quite dismal. Since the rescheduling of sovereign debt by Mexico in 1982, many of these countries have had to reschedule their burgeoning external debt, totaling more than $1.2 trillion at present, or have resorted to temporary moratoriums on their loan or interest payments. Although world energy prices have declined somewhat (except for the price spike caused by the Persian Gulf War) and interest rates have declined since the early 1980s, real prices have remained relatively high and industrialized nations have not significantly increased their imports of LDC goods and services. Thus, the economies of LDCs have remained, with a few exceptions, relatively weak. Foreign direct investment (FDI) could greatly benefit these countries. However, general political and economic conditions in most of these nations discourage increased flows of FDI.
