It is a world known fact that developing countries always rely on developed countries for funds and many other purposes. Developing countries are in an ongoing process of development because of which there are problems related to the economy and society. Developed countries are developed because of technological advancement. Productivity is much higher than the developing countries. Also that the developed countries like US, UK, China, Hong Kong, etc have stable political and economic conditions. Developed countries also provide funds for the poor countries which increases the reliance of developing countries on developed countries.

Developing countries today are facing a huge problem of debt from external institutions like World Bank, IMF. The increasing trade deficits are weakening the developing economies day by day. In order to service these loans, poor countries take more loans from rich countries.

Additionally, the dependency is also because of FDI which is a foreign direct investment. There are both positive and negative impacts of foreign direct investment on developing countries. The positive impact is that foreign countries are a way of job creation as well as they damage the domestic industries which are a negative influence on the economy. Problems exist in developing countries which make them reliant on developed countries and it seems like the tradition of dependency will continue.

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