... is a significant barrier to the development of a country for several reasons. There is already a shortage of capital that further leads to less capital being produced; this creates significant problems for developing countries. In these countries the income levels are low leading to low savings and therefore little money for investment in capital. This lack of capital furthers the low productivity therefore the employment remains low. This also leads to a lack of demand for goods and services the low demand means that less needs to be produced therefore less capital needs to be produced. This then forces the country into a cycle of underdevelopment. This consequently creates a barrier for the country to develop. An example of this is in most less developed countries where they are in constant times of war and civil unrest. Their capital is destroyed through war making it difficult for the country ...

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