Business English

Group 1
International Business Management

The challenges of developing countries in a global economy

From a global point of view, mainly technological forces have moved the economy
over time. The challenge of each economy has been to adapt themselves to the
global economic changes in order to be active player on the international
competitiveness. Through time, the global economy has moved towards the world
production, manufactured products and trade in order to have an integrated
economy. This has been the fundament for the development of each Country and
the growing of the International Competition. In the history the war period has been
a step for the further economy transformation.

The World War II, and the post-war period marked the beginning of the industrial
progress. In order to be part of that global trend and respond to the challenges of
the changing and growing global economy, the developing Countries involved
themselves on a technological system which includes the government, different
firms, the universities and the society as a whole. As a result there was a growing
industry and economy on the third world countries. They managed to increase the
manufactured exports (goods industry) from the industrial market economies.

It is surprising that at the moment, the common thinking had been fell apart and
had been changed for the personal thinking, where the society is not the center of
the growth and where each government thinks on enrich themselves and the
society is every time more relegated. The common thinking for the development
and the economic growing of a country is part of the past.

The economic growth after the World War II period was not only for rich
economies, but also for the developing countries (Latin America, Sub-Saharan
Africa and Asia). Indeed, the third world economies achieved to grow faster and
with twice rates more than the developed countries 1.

In the post-war period, the developing countries faced the challenge to be part of a
schooling system as a base for the global economic growth. Therefore, the growth
of those Countries was accompanied by an educational growth. This was mainly
focused on scientific and engineering disciplines. The growing economies were
successful in decreasing the educational gap with the industrialized countries. The
improving of the education system and the good policies brought a general growth
rates to developing countries’ economies.

In spite of there was a support from the industrialized countries for the educational
growth on the developing countries, there was brain drain from the third world
countries towards the developed ones. This brain drain was directed under the
base that studied people on the developed countries started to decrease since
there was a skill deficit there.

Since, the tertiary education began to fall on the developed countries, the brilliant
students from the third world countries started to go abroad. It seems like a good
strategy from the industrialized countries, in order to get intellectually trained
personnel for the growth of their industries.

The growing economies of the third world countries had the same performance
with same average economic growth. There was an increase on the manufacturing
and export production. In contrast, there was a de-industrialization of the
developed Countries2. However, at the 80´s, the average annual growth rate of
GDP of Latina America and Sub-Saharan Africa economies started to decline and
collapse, whilst the economic performance of the Asians (China, Japan, Korea and
Singapore) started to grow. They were more successful and constant with their
economic performance and policy of growing. It appears to be the Asians (leaded
by japan) adopted a long-term technological-economical strategy with national

1
[ CITATION Sin94 \l 3082 ]
2
[ CITATION Sin94 \l 3082 ]
integrated systems, while the Latin America and African countries adopted a mid-
term economic strategy.

From the past records, it was possible to see that developing Countries could lead
the Global economy. As far as they applied a national integrated system of
enhancing technological capabilities, they started to get a growing economy and be
part of the global economic requirements. Those countries started to grow as a
whole, where the social welfare was a starting point.

Unlike Asians, the Africans and Latin Americans countries did not protect their own
markets and the advanced countries had free access to them. Consequently, there
was a crisis debt and they were forced to privatize their public firms and domestic
industries, happening to depend on the developed Countries 3.

Therefore, the industry moved backwards, most firms imported products. The new
importing system, lead to a decreasing of the national technological system
production and housing efforts. This made Latin American and Sub-Saharan
African Countries be less competitive on an International scale and more
dependent on the growing developed economies.

Unfortunately, there has been a change of mind, where the Governments are not
transparent. Nowadays the governments are not part of the society any more. The
idea of grow as a Country has changed by the idea to sell a Country and to
introduce international firms in order to exploit what the Country was able to
produce in the past.

Currently the third world countries only produce labor and the intellectual people
are leaving to the first world Countries in order to enhance its development. The
privatizing industry is growing with time, and the third world society has every time
more commercial blinding. The third world society is increasingly involved in a
capitalist and consumerist world.

Clearly, the developing countries have to achieve new strategies in order to be

active players of the global economy again. Third world countries should think as

3
[ CITATION Sin94 \l 3082 ]
they used to do in the past with the aim to be more producers rather than
consumers. It is a challenge for the governments to incentive the students to be
more creative, to have more progressive minds and to be more open to work on
hand with more experienced people (bosses, teachers, and parents). Governments
should encourage schooling towards generating and applying knowledge beyond
the classroom. Every project as a result of meetings, congress and forums should
be executed at a National level in order to favor the development of the
communities. Afterwards, the governments should support those productive
projects in order to compete internationally with the aim to be an active part of a
growing global economy.
Bibliography
Singh, A. (1994). Global Economic changes, Skills and International
Competitiveness. International Labour Review, 167-182.