ECONOMICS SL COMMENTARY NUMBER 4- Economics/1B

Title of extract: IMF exec sees Asia's developing nations 'moving up the ladder'

Source of extract: Business World Online

Date of extract: 22 March, 2010

Word Count: 690

Date the commentary was written: 24 March, 2010

Sections of the syllabus to which the commentary relates: Section 5- Developmental Economics

        This article addresses the structure, stability, and growth system of developing countries.  One major point this article makes that is important to note is that all developing nations have different, wide-ranging preconditions and problems.  However, most of the time, solutions to problems and main issues are similar.

        Specifically, the article addresses certain problems faced by struggling countries in Southeast Asia.  For example, the need for basic public services such as health-care, food and shelter. Stable programs like these are necessary for sustaining an organized economy and a strong government infrastructure.  The article mentions that increased integration into the global economy is a very important aspect in the growth process. What creates a stable economy is a country's ability to cooperate with other countries, balancing imports with exports. Boosting competitiveness is also a crucial aspect of making sure that a country creates a stable role in the trade system.  Most of these developing countries are in Southeast Asia; therefore, in theory it should not be too difficult for international cooperation to come from larger economies such as China or Japan.

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        These reasons, however, are only some aspects of these developing countries that make it difficult for growth.  For example, many countries have large deficits and public debt, high credit growth as well as inflation.  These are signs of a highly unstable economy, and are big issues that must be faced soon, or else these factors will only increase in multitude.  As the article states, the Asian Development Bank speculates that these countries would need to invest approximately $8 trillion over the next ten years in order to gain more prosperity in the next upcoming decades.  Figure 1 displays the change ...

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