I don't understand. A 4% yield is a 4% yield, whether its in my currency or in USD. And so any yield needs to exceed my local inflation rate or else I'll be losing money. If I gain 4% on my investment in USD, but local goods prices rise by 6%, then my investment isn't getting me any closer to FIRE. I'm getting poorer, by 6% - 4% = 2% per year.
As someone else pointed out, due to Covered Interest Parity, my currency should weaken against the dollar too due to the inflation, offsetting the issue above. But this doesn't seem to be what you and EvenSteven are pointing out?
Just to highlight the whole sentence from my earlier post (bold added):
It is called Covered Interest Parity.
If you have an investment of comparable risk (eg government guaranteed bonds in developed country, same level of credit and duration risk), then the expected return after inflation should be the same.
So there is also the fact that emerging markets offer higher interest because the credit risk is higher.
For instance, the world would have to decay into armageddon for the US government to default on US government bonds, so they are about as safe as you can get.
In developing countries (or even some developed ones like Italy, Greece), there is clearly a higher chance of government defaulting and not not paying back that money back. It might be a small chance, but it is higher, and because investors around the world would not invest in those if they offered the same return as US government bonds, they have to offer a higher return.
This higher return is not free - you are paying for it with a higher risk.
The same way that corporate bonds offer a higher yield (for a higher chance of default).
The same way P2P lending has a very high interest rate (for an even higher chance of default).
So you may be getting a higher rate after inflation is taken into account if the quality of the investment is not comparable, but of course if this is the case, it is not a free lunch, you are paying for it with the safety of your investment.
I don't know if this is the case in your country, just wanted to point out that higher return (especially with credit) is pretty much always priced-in and any higher return will certainly come with some type of higher risk.
This article from monevator might be useful.
What is the minimal risk asset?