2007-02-16 04:05:30 · 3 answers · asked by terylisa2005 1 in Social Science ➔ Economics
The main obstacles are psychological. When a country is underdeveloped, there is an unwillingness of investors to be the first to jump in. This is especially true if the government is unstable, if there is a lack of reliable infrastructure, or if there is a lack of transparency (legal, economic, and financial).
If the country can get over that hurdle, it often has the opposite problem -- overconfidence. Foreign investment will come pouring in, and possibly overwhelming the banking system, which has to distribute the money to firms and households. Also, there will not be a lack of skilled worker, which will also migrate in if there are good economic opportunities.
Economists refer to this problem as the "stop-start" phenomenon.
2007-02-16 04:51:58 · answer #1 · answered by Allan 6 · 0⤊ 0⤋
Lack of skilled workers.
2007-02-16 12:13:01 · answer #2 · answered by mediahoney 6 · 0⤊ 1⤋
1) foreign investments-(its the only one i could think of).
2007-02-16 12:20:44 · answer #3 · answered by FreeHuGs 4 · 0⤊ 0⤋