First, aren't the largest 3rd world industries natural resource extraction and agriculture? These are notoriously low-return businesses. Othar than that, it seems to me that a typical investment in the 3rd world is in an industry with a proven, established market but one in which 1st world producers have lost pricing power. This makes sense if one keeps in mind that all 3rd world investments are relatively illiquid compared to 1st world investments. A foreign investor would not want to take on the added risk of a higher margin product with an unproven market. The Internet bubble suggests that 1st world investments are not only more liquid but sometimes "super-liquid" making an uncertain market for the product/service (or even no market) much less of a risk.