Economic development in low income countries Essay

It is no secret that patronage the breakthroughs in transnational frugal dynamics, development is still elusive to some of the grounds poorer countries. However, current trends indicate that some of these unhopeful income nations are actually faring a lot better than others. Countries like chinaware, Vietnam, and India might be well on their expression to scotch prosperity. The purpose of this paper is to identify the current aspects that affect economic progress and identify existing trends within those aspects.This paper gauges the sensitivity of low income countries to such trends. In particular, this paper discusses the aspects of globalization and study the parts that distributively of these aspects play in determining the economic fate of low income countries. In the continuing rise of globalization, lines that have previously separated nations are at present being blurred. The advent of free trade a few decades passed has change magnitude not only economic, but cul tural interactions among countries worldwide.These developments preview a globalized position of the economy, where the c at oncept of nation as an economic barrier because of tariffs and trade regulations may no longer apply. If we look at how low income countries fare in the light of a globalizing world market, there are varied cause that can be observed. The influx of multinational corporations into countries of the third world brought almost by the prospect of more affordable labor boosts employment range and strengthens these countries current economic standing.Countries like India, Vietnam, and the Philippines currently thrive on jobs provided by various outsourcing corporations from the United States and Europe. On the other hand, some countries tend to pain trade abuse from countries with stronger markets when it comes to the lowering of trade barriers. Without trade barriers on opposed products, the local companies of poorer countries find it oftentimes harder to co mpete with their inappropriate counterparts. The larger companies plain have greater big(p) and can afford to lower prices much more than local small companies.On the other hand despite the lowering of tariffs in the countries where larger companies are based, smaller companies from other countries who wishing to enter into those markets still have a hard time. A redeeming(prenominal) example of this can be seen in the case of China and the Philippines. Chinas booming economy exported goods worth over $18. 6 one thousand thousand into the Philippines in 2005 while the Philippines was only able to export $2. 3 one thousand million (Rogers, 2006). Clearly, smaller companies in the Philippines are sorely outclassed by Chinese capital and cheap labor.China has is in fact making noteworthy market headway in the international arena despite the preponderating low average income per annum of U. S. $2,040. With regards to direct investment, smaller companies yet find themselves outgu nned once more by their larger competitors. Direct investment allows large companies to perforate chap labor markets where smaller companies operate. They are able to turn higher(prenominal) wages to workers from smaller companies owing largely to wide differences in capital which is boosted more by differences in foreign currencies.On the other hand, smaller companies neither have the ability nor the need to expand their workforce and operations into other countries. Foreign direct investment is not only futile to them, but it also creates an avenue for their workers to be pirated by larger foreign companies. so it can be concluded that globalization is value electroneutral when it comes improving the economy of low income countries. Both India and the Philippines experienced long colonised rule which resulted to staggering economies in both cases.Yet after their granting immunity from their respective conquerors, the economics as well as other aspects of rise in either cou ntry took different turns. Economi promisey, India lagged behind the Philippines for many old age proceeding World War II, but Indias investment in education eventually paid off. The Indian government sets aside as much as 55% of the national budget for the development of elementary and tertiary education from since 1968 (Basham, 2005). The Philippines also allocates sizable budget in education but rampant corruption in the country prevents any original development from occurring.As a result, the country fared consistently low in successive Trends in Mathematics and Science Studies examinations conducted in 1999 and 2004 (Basham, 2005). The trends brought about by education reflect the quality of labor that a country has to offer and consequentially, the strength of its economy. While outsourcing western companies still obtain services from the Philippines for their call centers and medical transcription needs, they go to India for specialized and technological professional serv ices. Therefore it can be concluded that advances in education equate to advances in a countrys economy.It also holds true that countries that make considerable genuine investments in their education system develop a the great unwashed that fares relatively better in the international job market than countries who do not. In conclusion, there are indeed varying rates of economic development present in low income countries. These rates are partially dictated by trends in globalization and in education. It is imperative for less(prenominal) developed countries to take heed of their neighboring countries actions and follow suit, or guess being left behind by a rapidly evolving world economy.