Summary and Personal Reflection

Posted: August 25th, 2021

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Summary and Personal Reflection

Dividing world economies into two groups, that is, developed and developing ones, seems to be losing meaning gradually. Since the 1990s, economic growth and development in emerging economies have been great. As a result, the global economic power has shifted its gravity towards the developing nations, and the current position of China with regard to the global economy is sufficient confirmation of this shift. In the article “The Path to Economic Development is Growing More Treacherous, Again,” this turbulence facing the world economy is exhaustively discussed, and the authors’ primary argument is that the gap between the advanced economies and the rest of the world is closing slowly.

The article starts by providing facts about how the gap between the developed and developing countries has decreased since the 1990s. Before 1990, most of the emerging economies were experiencing a chronic decrease in national income when compared to first world countries. This, however, changed between 1990 and 2000 when these developing countries started experiencing a gradual increase in GPD. The explosive global trade that came next accelerated the growth of income and the gap between the rich and the poor closed over time. These changes started taking a new shape from 2000 onwards. Poverty levels have since greatly decreased and the gap between the advanced economies and emerging economies has become much smaller.

Despite the observed economic growth and development across the emerging economies, the article explains why Asia has been on the lead when compared to the rest of the developing world. Industrialization, alongside trade and export industries, spur economic growth and development. Most of the Asian countries, led by China, have growth-oriented governments which have been able to build an extensive and competitive industrial base. This is in contrast to most of the African and Latin America countries. Industrialization in China has led to explosive economic growth, and through a trickle-down effect, other Asian countries have benefited, as well. The article makes it clear that this industrialization-led economic growth is what has placed Asia on the lead when compared to the rest of the developing economies.

The article provides alternatives to industrialization which could be employed to achieve economic growth and development. Firstly, improving exports has the potential of redefining the economic fortunes of an economy. The tremendous growth of the Indian economy is sufficient evidence of this rule. Secondly, proper and full exploitation of natural resources can stimulate economic growth and development. Botswana’s exploitation of gold reserves confirms this argument. From the article, thus, industrialization is not the only factor which can independently fuel economic growth.  

The article explains that the slackened economic development in African countries is a result of poor governance. While this reasoning is based on fact, I find it lacking. Poor governance in Africa manifests in the form of deeply entrenched corruption which stems from the government itself. Besides poor governance, though,economic progress is prevented by illiteracy, poverty, theinability to exploit natural resources, and negative trade balance. To encourage development, African economies must embrace policies such as free education, tax cuts, and unrestricted foreign direct investments. These policies have been succesfully implemented across a number of different countries with excellent results in respect to growth, job creation, and overall economic development. 

Altogether, the article is a precise critique which reveals why the terms “developed” and “developingcountries” are likely to vanish in a few years. The hypothesis of the article is that economic development in emerging economies is escalating with time and this continues to shift the gravity of global economic dominance. Although Asia, Latin America, and Africa are classified as emerging economies, industrialization has made Asia outmatch the rest of developing economies. The article also states that exports and natural resource exploitation can spur growth in these economies which have been experiencing slowed economic growth. Overall, the article is detailed and insightful.