Question

describe the position of the developing economies within the world economy. Are there certain inequalities that work against them? Do international agreements favor developed countries and multinational corporations? Can we talk about unequal exchange or resource transfer from developing economies to developed economies?

Answer 1

Developed countries are generally the one which has high percapita income along with a greater degree of industrialisation.Developing countries on the other hand are the ones which have a lower percapita income than developed countries and there will be lower level of industrialisation

Currently, the developing economies are lagging behind the growth trajectory. This is because of the financial stress, reduced investment leading to economic slowdown. The phenomena of depreciation of currency is more experienced by a developing economy than a developed economy.

There are certain inequalities that work against them. Most of the developed countries are investors and the international agreements will be framed in such a way that it benefits the foreign investors who invest directly in the developing country. This is because the developed economies is considered to be one with greater economic power which has larger financial stability.

There always exists unequal exchange between the developing and the developed economies. The labour force needed for the production process are supplied by the developing economy at a cheaper wage rate. Same is the case with the raw materials required for the production process . But inturn the developed countries trade manufactured goods which are much costlier than the inputs. This makes the developed countries to become more and more rich in comparison with the developing countries