How can developing countries become developed

With such continuous growth rates, developing nations can converge with developed nations and that would mean higher standard of living and good economic and political power. But this growth is limited to few countries since many countries still have not opened their domestic market to international markets. These countries also have barriers in technology and availability and allocation of resources.

Buck up! Don't lose faith! Permalink Submitted by Shrinivas Chint Your article raises very fundamental questions about the plight of the billions of people living in the developing economies of the world and the future of these economies vis a vis the developed ones which have a clear edge over them.

I believe the solution to this problem is not the staple diet solution of economists - liberalisation, privatisation and globalisation. Each economy faces a unique problem. It is essential that any economy which wants to develop catches the tailwinds of these changes and becomes a superpower. On the other hand, economies such as Singapore are dependent on trade and commerce.

The United Kingdom became developed only through means of world domination in the 20th century. Our very own country, India was the largest economy in the world before the East India Company systematically looted the economy to serve British interests.

The point I am trying to make is that the road to greatness for any economy can never be through dependence on another. Rather, it is the other way around. Global dominance is also global independence. What does it take for a developing economy to become developed? An entrepreneurial psyche: For an economy to become developed, massive investments in people in the form of education, healthcare and the risk-taking ability of citizens is necessary. In India, if a person goes bankrupt, it is virtually impossible for him to get back to business because of the archaic laws on bankruptcy.

In the US, it is absolutely normal for a person to face bankruptcy. The legal system allows the person to borrow money again to start a new venture. The thinking behind this is that the majority of people wanting to do fair business should not be prevented from expressing their entrepreneurial ability just because a small number of people would go bankrupt for the purpose of defrauding banks and financial institutions.

This is where the legal framework has led to a negative psyche of risk taking and entrepreneurship. Developing a USP: Look at every economy as a company and developing a unique selling proposition becomes relevant. China has managed to become an exporter of cheap goods, the United Kingdom till now was a financial hub- there are chances of that changing thanks to BREXIT with the rise of Dublin. When we look at developing economies, such as India, we do not see any USP in the making.

I cannot think of any. People talk about demographic dividend to India in terms of a large young population. Such a population, which is largely uneducated is a demographic curse. Merely being a large market for goods and services is a bad idea for a USP. Developing countries need to introspect sometimes to look at the systemic challenges that they face.

Looking towards developed economies is not always the best alternative. Towards Equality in 21st Century? Angus Maddison, the famous British economist historian estimated that in A. While the share of many western economies remained very low. However, over the years the trend started to reverse and many western countries have now become very developed while third world countries like India, China etc. We are currently a 2 trillion dollar economy and the eighth largest economy in the world.

By , India is predicted to be the fifth largest economy in the world. On purchasing power basis, India is the second largest economy in the world only behind China. Despite so many bright spots, we are faced with the paradox of being an advanced economy and still being one of the poorest in the world. I will disagree with you sir on your view that PPP is not a fair measure for the size of an economy.

Infact, given the disparities in exchange rates and inflation, I feel it is a better method than measuring the economy on nominal basis. Our case to World Bank and IMF for loans and grants should not be on the basis of size of economy but the per capita income.

Any expenditure by these organisation in developing capital assets is going to have a multiplier effect which is going benefit the whole world. I completely agree with your view sir that even after 70 years of World War 2 and emergent of third world economies, the state of many countries is such that it leaves much to be desired. Our own neighbours in the subcontinent and many Asian countries continue to battle with high poverty, low investment and poor quality of life.

Africa has remained a dark continent till date, and given the political instability in many African countries, situation is becoming worse.

Developed countries continue to behave unfairly with many poor economies despite the injustices committed by them in past; More often than not, these countries become pawns and proxies in the hands of rival superpowers. Many Middle East countries and Afghanistan are an example of that. I agree with your view that for many countries the magnitude of inequality has reached such high proportion that it is impossible to bridge the gap. Many such countries who are highly rich in natural resources continue to be plundered by the developed economies.

Many countries continue to be haunted by the choices they made in past and turnaround being highly unlikely. All the questions asked by you in the end are highly pertinent and emphasises the need of careful planning and strategies for growth. The margin of error is very small. I feel this blog very rightly sums up the challenges faced by developing countries on their transition.

As pointed out by the blog, they are often not helped by the injustices meted out by the developed economies who continue to take decision in their own self-interest. I feel the time has come when all the developing economies need to unite and raise their voice collectively.

They need to speak about the unfair treatment meted out to them. These breakout countries can act like role models and help create a more equitable world. Too large of a redistribution, however, may create substantial disincentives to work and invest, or lead to tensions between formal and informal workers, employees of large companies or state-owned enterprises and small private firms. This danger now is clearer than ever: The changing world of work is clashing with persistent informality in developing countries and social protection systems that cover only part of the population.

However, there is overwhelming evidence that fiscal policy has been consistently pro-cyclical in developing countries, resulting in profound macroeconomic imbalances, unproductive debt build-ups, and ongoing instability.

Figure 3. Note: The Figure plots the correlation between the cyclical component of real GDP and the cyclical component of real government spending. Future Development. The Future Development blog informs and stimulates debate on key development issues.

This blog was first launched in September by the World Bank and the Brookings Institution in an effort to hold governments more accountable to poor people and offer solutions to the most prominent development challenges.

Continuing this goal, Future Development was re-launched in January at brookings. For archived content, visit worldbank. Future Development The Future Development blog informs and stimulates debate on key development issues. It is one of the primary movers that help impoverished nations to help themselves. The most common demographic among all of these populations—farmers, small-scale producers, victims of epidemics and terrorist groups—are women.

Children of both genders are vulnerable as well, but the impoverished boys who do not die prematurely or join the terrorists are more likely to have enough social mobility to get educated and leave than girls.

In the least educated African countries—Somalia, Niger, Liberia, Mali and Burkina Faso —over 70 percent of girls between seven and 16 have never attended school. By empowering women and equalizing academic opportunity, countries can increase incomes by an average of 23 percent. That way, neither parents nor children would feel pressure to force a decision between farm work and schoolwork and the poorest populations could begin to make progress. Americans have seen firsthand what happens when big businesses and lobbyists become too deeply involved with politicians.

When it happens in third-world countries, their poorest, most disadvantaged citizens are the ones who suffer. This often leads to violent uprisings with scads of victims on both sides. Aligning with people who have considerable political power and pathetically few scruples seldom benefits the poorer country.