Terminology Reference
In the 1960s and 1970s, a group of developing countries came together under the banner of the United Nations Conference on Trade and Development (UNCTAD), advocating for a New International Economic Order (NIEO) to improve their neglected position in the global economy. Known as the Group of 77 (G77), this alliance was founded in 1964, representing what was often called the Third World. The G77 sought a Third Way between capitalism and socialism, aiming to restructure international economic relations in their favour.
The NIEO, a term coined by these developing countries, described their call for a change in the international economic system. This change was intended to address the imbalance that left many developing countries at a disadvantage in the global entry.
As the world economy evolved, so did the tools used to measure its impact on countries. The Human Development Index (HDI), calculated by the United Nations Development Programme, is one such tool. Based on life expectancy, education, and standard of living, the HDI provides a comprehensive picture of a country's human development.
Trade, another crucial aspect of economic development, is measured through terms of trade. This term refers to the exchange ratio of a country's import and export prices. In the context of the G77's push for the NIEO, improving terms of trade was a key objective.
Direct Investments, economic activities by residents of one country in another, including the establishment or acquisition of enterprises abroad, also played a significant role in global economic relations. However, the flow of these investments was often uneven, with many developing countries receiving fewer investments than industrialized ones.
Fast forward to the present day, and globalization, a term for processes that increase worldwide interconnections between states, societies, and economies, primarily driven by changes in communication technology and transportation, has transformed the global economic landscape. This transformation has brought both opportunities and challenges for developing countries.
One challenge that has emerged is the 'Brain Drain,' the emigration of highly skilled workers from developing countries to industrialized ones. This trend can leave developing countries short of the skilled labour they need to drive economic growth and development.
In response to this challenge, the concept of Good Governance has gained prominence. Good Governance is characterized by the protection of human rights, participation of the population in political decisions, the rule of law, a market-oriented economic order, and development-oriented and efficient state action. Good Governance is seen as a key factor in attracting and retaining skilled workers.
Another important development strategy has been the Basic Needs Strategy, aimed at satisfying the basic needs of as many people as possible. This strategy includes providing a minimum supply of goods for private consumption and securing basic public services.
In the realm of debt relief, the Highly Indebted Poor Countries Initiative (HIPC) has been a significant effort. The HIPC is aimed at reducing the debt burden of highly indebted countries to a 'sustainable' level.
The World Trade Organization (WTO), an extension of the General Agreement on Tariffs and Trade (GATT), aims to facilitate free global trade by reducing trade barriers. Its member states negotiate on key trade policy issues and can use the organization's dispute settlement procedures.
Lastly, the strategy of Import Substitution, aimed at increasing domestic production of previously imported products to achieve financial savings and greater independence from foreign trade, has been a common approach in many developing countries. However, this strategy carries the risk of isolation from the world market.
In conclusion, the journey of global economic development, from the formation of the G77 to the present day, has been marked by various strategies, initiatives, and challenges. Understanding this journey is crucial for navigating the complexities of the global economy and working towards a more equitable and sustainable future for all.
Read also:
- Overcoming Yielding Regulations Hurdles in Indian Export Sector for EU Markets
- Shaping production and consumption tendencies via cosmetic certification
- Increased Investment in AI, Machine Learning, Internet of Things, and Quantum Computing to Propel Growth in the Digital Economy (2020 Budget)
- Deteriorated residence designed for trainees
