Write two disadvantages of foreign loans.
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1. Increase Dependency.
Less economically developed countries (LEDCs) may become increasingly dependent on donor countries, and become heavily indebted.
2. Risk of Corruption.
There is likelihood that foreign financial support do not reach their rightful recipients, but go to the hands of corrupt political officials.
3. Economic/Political Pressure.
A donor country may place economic and political pressure on the receiving country, forcing them to return the favor.
4. Overlook Small Farmers.
5. Benefit Employers.
Most development may only benefit large corporations and already-wealthy employers, and not the people who do not have jobs or proper livelihoods.
6. Hidden Agenda of Foreign-Owned Corporations.
7. More Expensive Commodities.
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