The increased use of countertrade over the last few years may help developing nations accelerate their recoveries out of the global recession.  When compared to industrialized nations, developing economies usually are affected much worse by recessions.  During a global recession, it is difficult for LDCs to continue trading using traditional financial instruments.  The ability to use cash, letters of credit, or a loan is virtually impossible for a nations suffering with credit problems or political risk.  Also, the need for trade credit is growing at a time when banks are less able or incapable to facilitate international trade.  Aditionally, tradable (hard) currencies would be too expensive for LDCs.  This hostile trade environment is forcing many countries to look to counter trade as a catalyst for survival - and hopefully recovery. To complicate things further, even if a LDC's credit or cash reserves were good, a global recession would decrease the demand for raw material and everyday consumer goods.  One of the unique features of counter trade is that is appears more effective when used between two developing countries.  Knowing this, LDC will be able to weather a demand-side slump by trading with each other.  Additionally, the current level of globalization gives LDCs more access to each other than ever before.  With an ever increasing globalized market, the opportunity for direct counter trade between LDCs is better than ever before.  However, being able to side-step hard currencies and credit problems, while continuing trading activities, is not a walk in the park.  One of the stand-out challenges of counter trade is determining a fair exchange ratio for the products or services being exchanged.  How many barrels of oil is a ton of rice worth?  And what is the quality of the oil considering a predefined quantity and quality of rice?  Regarless of these questions, many LDCs are realizing that cooperating with each other pays off.  In the 21st century, LDCs can keep exports at healthy levels regardless of the global demand for their products. Reference

John P Angelidis,  Faramarz Parsa,  Nabil A Ibrahim. (2004). Countertrading with Latin America: A Comparative Analysis of Attitudes of United States Firms. International Journal of Management, 21(4), 435-444.  Retrieved April 30, 2009, from ABI/INFORM Global database. (Document ID: 804348701).