EFFECTS OF

CONTEMPORARY
DRIVERS TO DEVELOPED
AND DEVELOPING
COUNTRIES
GOLD 1CL BARRAMEDA
NGEC 6 1CL CACERES
1CL DOMINGO
1CL MORENO
International Trade
 DEVELOPED COUNTRIES
UNITED STATES
Developed countries can easily dominate international trade. Most of their products or services have one of the
highest percentages when it comes to different industries.

On the other hand export products on international trade may be unaffordable to developing countries.

The top purchasers of U.S. goods exports in 2022 were:

Canada: 15% of total exports, $669 billion
Mexico: 15% of total exports, $656 billion
China: 13% of total exports, $587 billion
Japan: 4.3% of total exports, $190 billion
Germany: 4% of total exports, $180 billion

As seen on the data above, most of the importers of the USA, a developed country, were also developed countries
like Canada, Japan and Germany.
 DEVELOPING COUNTRIES
PHILIPPINES
The good effect on developing countries to participate in international trade is that they have the opportunity to
promote their local products. For example, mangoes were exported to other countries like Japan, South Korea,
Singapore, and the USA from the Philippines.

However, in developing countries like the Philippines there is a lack of facilities to accommodate products from
international trade. A researcher, Kris Francisco of the Philippine Institute for Development Studies, stated that the
country has more international seaports than most of its neighbors in the ASEAN but trails others in international
cargo throughput and shipping container volume.
Outsourcing
 DEVELOPED COUNTRIES
UNITED STATES
Positive:
The United States increases their economic growth by outsourcing people, services, or products who have a
cheaper labor cost from developing countries.

Negative:
Since outsourcing is getting or hiring foreign workers, there will be a concern in terms of security or information
breach that can affect the economy of the business itself in the United States. The US is also affected negatively;
since outsourcing leads to outflow of investments and funds to developing countries. Also, unemployment rate
increases since the jobs are passed to developing countries. Also, substandard working conditions are exposed from
the developing countries.
 DEVELOPING COUNTRIES
INDIA
Positive:
Outsourcing can provide people in developing countries with well-paid jobs that might not be available to them
otherwise. It can also expand labor opportunities and support business functions. Also improving the skill of the
locals.

Negative:
The culture of the country is affected by creating or changing the culture little by little because of the culture of
the Western countries who are outsourcing the country. Moreover, developing country shouldn't be fully dependent
to the outsourcing jobs for the outsourcing company could go out of business.
Offshoring
 DEVELOPED COUNTRIES
UNITED STATES
Positive:
Productivity and new jobs. With all the savings and new sales companies receive through offshoring, they have
enough capital to create new specific jobs for American workers. The US gain the opportunity to expand specific
services and professional field. Additionally, the U.S. gains easier access to the global workforce and increases
competition in global marketplace.

Negative:
On the contrary, the massive number of potential workers in developing countries such as India is so massive that
integrating them into the US economy will cause persistent unemployment in the United States. According to an
article from Blinder, he estimates that million jobs, accounting for a little more than one-fifth of the U.S. workforce,
are vulnerable to offshoring. He estimates the 10 most vulnerable occupations, where U.S. workers in these jobs
now face competition from overseas workers.
 DEVELOPING COUNTRIES
INDIA
Positive:
Offshoring needs a proficient workforce, and India is a suitable provider.
With its large population and exceptional universities, the developing nation produces engineers and doctoral
graduates on a massive scale each year.
Whether you need IT professionals, BPO (Business Process Outsourcing) experts, etc. An Indian offshore
outsourcing firm or company can offer a large number of qualified people. The demand for skilled labor in India
is big and growing exponentially.

Negative:
However, if this leads to drop of service quality or loss of control, sudden shutdown of offshoring operations
in India may happen and drastically affect the employment of the country.
Even though India has increased massive opportunity in terms of offshoring jobs, the infrastructure system and
their facilities for offshore workers are still relatively poor and requires compared to other countries.
International
Investment
 DEVELOPED COUNTRIES
UNITED STATES
Positive:
International investments favors the economic growth of the U.S. The U.S gains stronger oversight and stricter
regulations that supervise the operations of companies and corporations. They gain more liberalization of
investments since they are more politically stable and secure. In addition, according to UNCTAD's 2022 World
Investment Report, FDI flows to the U.S. rebounded strongly by 143.6 percent. International Investment
influences US economic growth by increasing total factor productivity and the efficiency of resource use in the host
country. It increases the capital stock of the host country and thus raises the output levels.
Negative:
On the contrary, the US market is very competitive. Consumers are accustomed to have many choices and are not
necessarily brand loyalists. Strong dollar increases the trade deficit.
In addition, international investment influences exchange rates globally. When exchange rates change, the prices
of imported goods will change in value, including domestic products that rely on imported parts and raw materials.
Exchange rates also impact investment performance, interest rates, and inflation—and can even extend to influence
the job market and real estate sector.
 DEVELOPING COUNTRIES
CHINA
Positive:
China gains the dominance to huge market growth potential, has a skilled labor pool and unparalleled
infrastructure, and is investing in its capabilities as a manufacturing base for industries of the future. Investing
in China is not always easy, but there is no other country that can replace it. A well-developed production sector
(manufacturing sector and heavy industry)A favorable geographic location (close to emerging Asian markets, to
Japan, maritime frontage).

Negative:
Even if the China shows huge capabilities, they’re still remain low in global investment outbound.
Some of the risks associated with investing in China include its communist structure, regulatory differences,
and insider trading.
Some of the disadvantages for FDI in China include:
* An ever-changing legal environment
* Bureaucratic and administrative complexities
* A lack of transparency and weak intellectual property rights protection
* Production overcapacity in several sector
Transportation
 DEVELOPED COUNTRIES
JAPAN

Japan is known for its reliable and fast trains network. The country has an efficient transportation system.
Railways in Japan are its main method of passenger transport, allowing fast and frequent access within and between
major cities and metropolitan areas.

Though Japan is famous for its fast public transportation, congestion is still one of Japan's biggest problems. Also,
the rapid urbanization contributes to certain issues that Japan faces.
 DEVELOPING COUNTRIES
PHILIPPINES
The Philippines provides commuters with a convenient method of transportation to reach their destination
faster and cheaper such as trains, buses, jeepneys, electric jeepneys and motorcycles compared with private
vehicles.

The rail network in the Philippines is small which results in relying on major public transportation. We all know
that the Philippines ranked 8th in terms of traffic congestion around the world.
Telecommunication
 DEVELOPED COUNTRIES
SWITZERLAND

Switzerland’ telecommunication system is so advanced that it helps reduce transaction cost in different sectors of
the economy that results in efficiency. Their telecommunication system allowed them to reach out to a broader
number of clients with lesser resources.

Security incursions have been identified as a tier 1 national security threat. Last 2017, Switzerland declared that they
suffered a data breach exposing around 800000 customers’ personal details.
 DEVELOPING COUNTRIES
MYANMAR

Myanmar’s telecommunications sector was monopolized by the

state-owned service provider, Myanmar Posts and
Telecommunications (MPT).
In 2015, there was a growth in the telecommunications sector
after it was introduced. But the military retook power in 2021 after
a series of troubles that heightened the repression.
Information
Technology
 DEVELOPED COUNTRIES
UNITED STATES

Positive
The United States of America is achieving more considerable success in the development of information
technology studies. IT has enabled instantaneous advantages of technology with increased information and
education in the U.S. They gain control over global communities that share and form ideas and resources through
technology. With the help of information technology the country will be more price competitive in the international
market with the help of the rising inventions brought by information technology.

NEGATIVE:
Since information technology is the root of the inventions and innovations that help the business to be more
productive and price competitive in the global market, at the same time this might be the reason for the start of
increase of unemployment for the business sectors that will rely more on technology.
 DEVELOPING COUNTRIES
PHILIPPINES
The Philippines uses information technology to increase the efficiency and productivity in manufacturing and
other businesses. IT also helps the Philippines in establishing relationships with other countries to form an
alliance to help each other. However, since the Philippines is a developing country, the present information
technology is not advanced unlike the developed
Negative:
Information Technology can help the industry to grow with the help of innovative or upgraded machines,
however; this might also affect the unemployment rate of the country. The country will also be more vulnerable
to crimes, security and information breach, cybercrime which may be a huge problem if not solved by the
country or since it is a developing country, the Philippines will be more vulnerable, or will have a hard time to
solve this kind of problems that might occur.

Also, there will be an imbalance in spreading the information technology all over the country for it doesn't
have enough funds to build infrastructures that the information technology needs.
GEOPILITICS
 DEVELOPED COUNTRIES
NATO

Developed Countries will have the upper hand or more likely to lead the expansion of global politics that the
other countries will follow. Geopolitics will make the country even more powerful depending on how it will use it.
It can give balance in the international/ global economy by making regulations to govern globalization.
Geopolitics can also open new trade routes and connections to the developed and developing countries making the
developed countries more dominant or powerful.

To cite an example, in 2022, the United States had the largest number of military personnel out of all North Atlantic
Treaty Organization (NATO) countries, with 1.35 million troops. The country with the second largest number of
military personnel was Turkey, with just around 447,000 personnel giving it the upper hand in NATO

However, since geopolitics is an international relationship influenced by geographical factors, cultural

globalization or changes or mixed cultural beliefs may affect the country's economic stability affecting the
economic strength. One of the challenges is the varied cultures of troops and even citizens from different nations.
This diversity of culture and norm is one of the considered hindrances in the unity of NATO.
 DEVELOPED COUNTRIES
ASEAN

Geopolitics creates stronger alliances among nations which will eventually develop their mutual relationships to
help each other to improve each nations’ economy.

Just like ASEAN with its AEC or ASEAN economic community which aims to improve the flows of capital and
skills, as well as of commodities, services, and investments. As a rules-based organization, ASEAN will be
strengthened and improved as a single investment destination with harmonized trade and investment laws.

For developing countries who have formed alliances such as ASEAN, the problem is when one participating nation
had an opportunity for investment, or other economic activities they often left others behind. Example is the
Philippines which when the USA offered some opportunities for development they often grabbed it without
consulting the other nations and even if other nations did not benefit from it.
References
Bose, 2012. Advantages and Disadvantages of FDI in China and India.
https://www.researchgate.net/publication/265083332_Advantages_and_Disadvantages_of_FDI_in_Chin
a_and_India

Alhashel,2020. Hail to the chief: The effect of political alignment with the presidency on corporate
investment. https://www.sciencedirect.com/science/article/abs/pii/S0275531920302622

Digest, 2008.Why do Foreigners Invest in the United States?

https://www.nber.org/digest/aug08/why-do-foreigners-invest-united-states

Alan S. Blinder, “How Many U.S. Jobs Might Be Offshorable?” CEPS Working Paper 142 (March 2007);
and Bureau of Labor Statistics National Occupational Employment and Wage Estimates, May 2007
(www.bls.gov/oes/current/oes_nat.htm,accessed May 28, 2008).

Sayed, Dadwal, 2012. Developed-developing country partnerships: Benefits to developed countries?

https://www.researchgate.net/publication/227341378_Developed-
developing_country_partnerships_Benefits_to_developed_countries