Globalization and Inefficiency in Less Developed Countries

Abstract

This paper explains theoretically that the present economic problems of less developed countries, particularly in Southeast Asia, are the direct offspring of the inefficiency of their industries, disabling them to effectively complete in the world market. Globalization simply exposed this inefficiency. The sharp depreciation of these country currencies is merely a consequence of such inefficiency. Thus, these country problems are not financial in nature but a real sector phenomenon.