From an investor's point of view, what is the main cause of poverty in developing countries?

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readerofbooks eNotes educator| Certified Educator

There are many reasons for poverty in developing countries. These will also cause hesitation for investors. Let me list two of them.

First, there is a lack of infrastructure. By this we can include roads, communication lines, and anything else that might make commerce more eefficient. So, even if a country has great resources, they might not be accessible. This can cause a nation to remain in poverty. Moreover, this may cause investors not to invest. The infrastructure might be too costly and this might eat into all the potential profits.

Second, poverty and education are also directly linked. Many developing countries do not have their educational system in place. This will cause a weaker work force and in turn  these people will be far less qualified to compete with the rest of the world. From an investor point of view, the quality of workers is an important factor. One practical question would be: will the local population be able to sustain the business?