In the context of educational globalization and increasing dominance of supranational organizations in educational governance, least developed countries (LDCs) have faced a new level of tension about whether their educational policies should follow the global educational models or seek solutions of their multifarious problems by promoting local indigenous literacy practices. This article critically analyzed key educational policy documents produced by major supranational organizations and selected LDCs and argues that the deficit perspective in education started in the colonial period and institutionalized during the structural adjustment period has shaped literacy policies and practices even after the 1990s. The article concludes with an appeal for developing contextually relevant literacy policies and programs through an asset perspective; and provides directions for further research for exploring LDCs' literacy policies.