Economic Implications for Developing Countries

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 As the importance of raw materials has declined since the beginning of this century, the structure of international trade has changed. Synthetic materials tend to replace raw materials and energy saving techniques will change the structure of inputs. Since LDCs often depend on the export of raw materials and commodities, this trend would affect their balances of payments
► The substitution of employment through automated process in the industrialized world will tend to erode the competitive advantage of the unqualified labor, which so far constitutes the main comparative advantage of LDCs
► The growing demand for new services in post industrial countries can partly be met through production in LDCs
► Any structural transformation of LDCs requires capital investment in infrastructure and institutions, however private capital markets tend to be highly volatile and access to these markets is typically inappropriate
► The protection environment will become an important objective not only in the industrialized world. A new form of protectionism in the industrial world is often called Social environment dumping by LDCs
   
 
 

Integration with the Global Economy Indicators for Low & Middle Income Countries
 

Country

Trade in Goods

Gross Private Capital Flows ( % of G.D.P.)

Gross Private Capital Flows ( % of G.D.P.)

% of G.D.P.

% of Goods G.D.P.

1990

 2001

1990

 2001

1990

 2001 1990 2001

East Asia& Pacific

47

 61 77.8 69.7

5

 11.1 1.7 4.6

Europe &Central Asia

-

 65.9 - 199.4

-
 

 13.2 - 3.9

Latin America &Caribbean

23.3

 37.6 66.2 110.4 7.9 12.1 0.9 4.4

Middle East & North Africa

48.1

 45.4 84.2 78.5

6.2

 9.7 0.8 1.3

South Asia

16.5

 23.4 - -

6.4

 3.2 0.1 0.6

Sub-Saharan Africa

42.3

 56 77.1 97.5

5.1

 17 1 8.1

Source: World Development Indicators 2003
 
 
 

Interesting Links
► International Monetary Fund (2001) Global Trade Liberalization and the Developing Countries (Washington : IMF)
► Wallace, Laura (1999) "AFRICA Adjusting to the Challenges of Globalization"  Proceedings of a seminar held in Paris—May 4–5, 1998 International Monetary Fund &Ministry of Finance of Japan (Washington:IMF)
► Fontana, Marzia. D.Phil. Research in Progress. The Gender Impact of Trade Liberalization in Low-income Developing Countries, mimeo. Institute of Development Studies (IDS). Brighton.
► Korayem, Karima (2000)"Social Implications of Globalization on the Developing Countries" paper presented to conference on "Globalization and the South; Economic and Social Implications" , Center for Developing Countries Studies, Faculty of Economics and Political Science, Cairo University, Cairo
► Mattoo, Aaditya (1999) "Financial Services and the World Trade Organization: Liberalization Commitments of the Developing and Transition Economies" Working Paper (: Washington: World Bank)
► Michalopoulos, onstantine (1999) "Trade Policy and Market Access Issues for Developing Countries: Implications for the Millennium Round" Working Paper (Washington: World Bank)
► Prasad, Eswar, Kenneth Rogoff, Shang-Jin Wei, and M. Ayhan Kose Effects of Financial Globalization on Developing Countries: Some Empirical Evidence  (Washington D.C.: IMF )
► Rama , Martin (2003) Globalization and Workers in Developing Countries. (Washington : World Bank)
► Youssef, Shahid (2001) Globalization and the Challenges for Developing Countries. (Washington: World Bank)
► Dodzin, Sergei &Vamvakidis, Athanasios(1999) "Trade and Industrialization in Developing Agricultural Economies" (Washington D.C.: IMF)
►  Adhikari, Ramesh & Prema_chandra Athukorala. (ed.) (2002) Developing Countries in the World Trading System: the Uruguay Round and Beyond (Northampton, MA: Edward Elgar Pub.)