What Extent the Developing Countries Depend on the Industrial Countries for Economic Growth and Development

Topics: Developed country, Human Development Index, Developing country Pages: 5 (1776 words) Published: May 18, 2013

A developing country, also called a less-developed country (LDC), is a nation with a low living standard, undeveloped industrial base, and low Human Development Index (HDI) relative to other countries. Meanwhile, an industrial country also known as developed country or "more developed country" (MDC), is a sovereign state that has a highly developed economy and advanced technological infrastructure relative to other less developed nations. Most commonly the criteria for evaluating the degree of economic development are gross domestic product (GDP), the per capita income, level of industrialization, amount of widespread infrastructure and general standard of living. There are lots of arguments about should developed countries help developing countries? Some scholar thinks that developed countries have responsibility to help developing countries, meanwhile some things that it is not necessary. "The economic recovery remains fragile and uncertain, clouding the prospect for rapid improvement and a return to more robust economic growth," said World Bank Group President Jim Yong Kim. "Developing countries have remained remarkably resilient thus far. But we can't wait for a return to growth in the high-income countries, so we have to continue to support developing countries in making investments in infrastructure, in health, in education. This will set the stage for the stronger growth that we know that they can achieve in the future.” To help developing countries help themselves, developed nations must begin to lift the burdens they impose on the poor. Currently, the developed world uses international trade agreements to impose costly and onerous obligations on poor countries. The most egregious example has been the WTO’s intellectual property agreement, the Trade-Related Aspects of Intellectual Property Rights (trips). Almost all successful cases of development in the last 50 years have been based on creative and often heterodox policy innovations. South Korea and Taiwan, for example, combined their outward trade orientations with unorthodox policies: export subsidies, directed credit, patent and copyright infringements, domestic-content requirements on local production, high levels of tariff and nontariff barriers, public ownership of large segments of banking and industry, and restrictions on capital flows, including direct foreign investment. Since the late 1970s, China has also followed a highly unorthodox two-track strategy, violating practically every rule in the book—including, most notably, securing private property rights. India, which raised its economic growth rate in the early 1980s, remained a highly protected economy well into the 1990s.Even Chile—Latin America’s apparently “orthodox” standout that managed to achieve both growth and democracy— violated conventional wisdom by subsidizing its nascent export industries and taxing capital inflows. Conversely, countries that have adhered more strictly to the orthodox structural reform agenda—most notably in Latin America—have fared less well. Since the mid-1980s, virtually all Latin American countries have opened and deregulated their economies, privatized their public enterprises, and allowed unrestricted access to foreign capital. Yet they have grown at a fraction of the pace of the heterodox reformers and have been strongly buffeted by macroeconomic instability. The contrasting experiences of eastern Asia, China, and India suggest that the secret of poverty-reducing growth lies in creating business opportunities for domestic investors, including the poor, through institutional innovations that are tailored to local political and institutional realities. Ignoring these realities carries the risk that pro-poor policies, even when they are part of apparently sound and well-intentioned IMF and World Bank programs, will be captured by local elites. Developed...
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