In this world there are three types of countries classified by the economic level: Developed Countries, Developing Countries and Least Developed Countries, and the United States is a developed country. The U.S economy has been moving to Least Developed Countries (LDCS) for investments, and this moving has a good side and a bad side: The good thing about it is that the total costs of investing in a Least Developed Country is much lower than investing inside the U.S, but the bad thing is that there is a bit of risk because it needs many aspects which are not usually found in a Least Developed Country like a strong legal system, security and domestic conditions.
Least Developed Countries are not usually attractive for international investors, so it is an opportunity to invest in a place where nobody invests, nearly no competitors there. Moving to these countries can secure much cheaper labor than labor from U.S, and that means lower level of total costs. In addition, investing in those countries is a good gate through cheap raw materials because “Most nonfuel commodity exporters are located in Sub-Saharan Africa, Latin America, and Central Asia”. (UN, 2005, p. 221).
As the process of development goes on, those countries might become someday Developing countries. Markets in Developing Countries are very profitable target for foreign investments especially in the power sector, because the need for consuming electricity there is estimated to increase 4% per year within the next 20 years. (Lamech & Saeed, 2003, p. 1).
Moving to Least Developed Countries could make a successful step for the U.S economy. and investing in those countries boosts up their economies. This helps to accomplish the UN Millennium Development Goals plan. According to Mueller and Ball (2006) this plan is targeted to eliminate half billion people from extreme poverty by the year 2015.
Lamech, R., & Saeed, K. (2003). What International Investors Look For When Investing In
Developing Countries: Results from a Survey of International Investors in the Power
Sector. Washington, D.C.: The World Bank.
Mueller, P., & Ball, A. (2006). International Investing: A Global Demographic Primer.
Journal of Real Estate Portfolio Management, 12, 299-308.
Sachs, J. D. (2005). Investing in Development: A Practical Plan to Achieve the Millennium Development Goals. New York: Earthscan.