Discuss causes of unfavourable balance of payment for most developing countries,

Discuss causes of unfavourable balance of payment for most developing countries,

Causes of unfavourable balance of payment for most developing countries include:

1. Reliance on primary products for export. Most developing countries mainly export primary agricultural products which fetch low prices in the international market.
2. Heavy importation of finished goods. Most developing countries import finished manufactured goods whose value are very high hence spend more on them.
3. Low levels of technology. Most developing countries rely on low levels of technology in production which compromises the quality of their exports and also lowering their value.
4. Too much reliance on foreign borrowing. Most developing countries finance their development projects through heavy borrowing yet such loans are repaid with heavy interests.
5. Susceptibility to natural calamities. Many developing countries are easily affected by natural disasters like drought which adversely affect their production.
6. Preference towards foreign goods. Most consumers in developing countries prefer goods manufactured in foreign countries in the belief that they are of better quality.
7. Unfavourable world economic order. The developing countries have very little say in international trade forums and cannot influence the world economic order in their favour.

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