• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Discuss the alternative methods that developing countries might use to overcome the difficulties that they have when trying to compete with developed countries.

Extracts from this document...

Introduction

Geryn Evans Discuss the alternative methods that developing countries might use to overcome the difficulties that they have when trying to compete with developed countries. Economic development occurs when a country improves the economic welfare of its population through, for example reducing poverty. Some economists discuss the world as being the 'developed north' and 'underdeveloped south'. This refers to the gap between rich countries, which are mainly in the northern hemisphere and poor countries, which are located mainly in the southern hemisphere. This is not the only method used to categorise countries, The World Bank and United Nations classify countries into high, middle and low income countries while the International Monetary Fund (IMF) categorises countries into least developed, developing and industrial countries. I believe that many underdeveloped countries are involved in the 'cycle of deprivation', which I have shown diagrammatically above. If there is little investment in a country it is easy for a country to get caught up in the cycle and make things worse for the economy. If an LEDC (Less Economically Developed Countries) has little money available the country will undoubtedly have a poor infrastructure, this will act as a deterrent for industry to move to the area as the transport and communication will be of poor quality and will cause problems for firms. If little industry is attracted there will be no jobs available and unemployment will soar. As described in more detail below some Multi National Companies take advantage of the cheap labour in LEDC's but as they pay very low wages very little is invested into the economy and the majority of profits leave the country so there is no significant increase in investment. ...read more.

Middle

This increase production by the UK farmer means their costs are lower more than the Bangladeshi farmer so demand for UK crops will increase and demand for Bangladesh crops will decrease as consumers will switch to the cheaper substitute. This will result in less Bangladesh crops being bought, therefore making the Bangladeshi farmers less competitive in the global economy. UK crops Indian crops Price Price Quantity Quantity It is not all 'doom and gloom' however for developing countries which are trying to compete globally. There are a number of policies, which can be used to promote development and to increase the countries competitiveness on a global scale. Increasing agricultural productivity- This policy has often been overlooked in the past because of the income inelastic demand for food and the volatility of supply. However, increasing productivity in agriculture, as part of a development strategy, can stimulate demand for manufactured products like tractors. With this new technology farmers will be able to increase their yields as they become more productive and as their costs are reduced they will become more competitive. A firms costs will fall as they become more productive as they spread their overheads over a larger volume of output, resulting in reduced unit costs. Export-orientated industrialisation- Involves an outward orientation of development, opening up the country to international trade by removing trade barriers. The thinking is that the increased competition from industrial countries will force the developing country's firms to become more efficient. ...read more.

Conclusion

This policy can be a successful method of increasing development if the strategies are planned correctly. If money is spent unwisely as was the case in Brazil and Mexico problems can occur which will devastate the economies and will stunt development. Applying for foreign aid - can assist development if it is used in high productive projects which take into account the resource endowment of the country. Untied aid is thought to be more beneficial than tied aid. The latter requires the recipient to buy goods and services from the donor country. The World bank and IMF (International Monetary Fund) provide loans to developing countries designed to improve their infrastructure, education and health services, restructure the economy and cope with aggregate supply and demand shocks. I feel that this policy can once again either greatly benefit a country if it is used wisely or it can create even more problems for the economy. To conclude I feel that it is very difficult for developing countries to compete globally with developed countries as they are at a disadvantage in many respects. I feel that the best way to increase the competitiveness of developing countries is to increase the development in the countries and to increase investment and this often requires external assistance. I feel that developing countries can overcome the disadvantages they face by successfully planning and using some of the policies mentioned above. The third world should not be alienated but welcomed into the global market, and only then will they not feel so daunted by the prospect of competing with the superpowers of the industrial world. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Global Interdependence & Economic Transition section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Global Interdependence & Economic Transition essays

  1. Marked by a teacher

    Investigating Travel & Tourism

    5 star(s)

    I would be away from home for months at a time, and work long hours. The work is seasonal. Work is both indoor and outdoor. Conditions vary according to the location and climate of the resort. Experienced holiday representatives would earn between �15,000 and �18,000 a year.

  2. Marked by a teacher

    Referring to both pharmaceutical and tobacco companies, explain how transnational corporations can influence the ...

    5 star(s)

    They are not inaccessible as they were in MEDCs and for that reason the health of the population in MEDCs is often much better and the generic drugs provided to health services in MEDCs are often quite cheap and are easily accessible reducing the level of disease in MEDCs.

  1. The Impact of Transnational Corporations on Less Economically Developed Countries

    If the country is using as lot of energy to develop, then this can cause a national debt. Therefore, the rate of development will be stunted and the country will have been taken advantage of. This could cause upset within the workforce, creating strikes.

  2. Assess the extent to which Trans National Corporations (TNCs) have a positive impact ...

    The need of jobs also creates more opportunities for female employment in low skilled manufacturing jobs, additionally the reduction in racism and nationalism in people of different nations, as jobs draw people to move to different locations, people mix and become more aware and tolerant of each other's lifestyles and customs.

  1. Can developing countries ever catch up with developed countries

    Therefore, the solution takes the form of an attempt to make underdeveloped societies more like developed ones, by means such as "structural adjustment", privatisation, free trade, democratisation and anti-corruption drives. The argument which supports the 'development problem' analyses stems from neo-liberal economics.

  2. International Ecotourism Management: Using Australia and Africa as Case Studies.

    The tourist is often the passive consumer of the tour packages, the accommodations and the experiences provided. However, consumers with advanced environmental preservation attitudes demand certain levels of environmental impact and service quality related to their travel experience. Lubeck (1991)

  1. Newly industrialised countries have been, and continue to be, the driving force of globalisation. ...

    Companies such as BT and Coca-Cola outsource their workers in India and China respectively because of the cheaper wages of the workers in these countries. The laws regarding employment are also weaker; meaning that large numbers of employees can be hired from these countries for little cost, and have little supervision.

  2. Outline and suggest reasons for the issues facing countries at very low levels of ...

    Nigeria was able to become a developed country in 2002 because of this trade, most of which became naturally as they got little help from western countries who still isolated them due to the military dictatorships of the 1980?s. Therefore we can suggest that many of the countries that are

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work