Free Developing Countries Essay Sample
The improvement of the development performance of developing countries form a major function of the international multilateral institutions and organizations. Some of the broad factors that mostly consign countries into this category of underdevelopment include; resource, population, economic system and structure, historical background among others. On the other hand factors that can induce growth and as a result pull them out of this state of dependence include; increased production, sustainable levels of production, and increase in national output to name but a few.
Before a third world country, or any other country for that matter, can secure a grant or loan, the respective country in need of such a loan has to be appraised by experts and advisers of the multinational institution (world Bank in this case), the fact that majority of the third world countries do not have attractive balance sheet to pass such tooth-comb scrutiny block most of them from receiving the much needed financing thereby denying them a chance to break from the cycle of poverty. For instance, there was a time Cambodia was denied funding by World Bank after it already pathetic budget deficit was found to be receiving a lot of upward pressure from growth pressure World. In this regard, the World Bank would do well if it was to consider the individual case of each of every applicant of such financing.
Challenges that developing countries face in improving their economies
The debt owned to developed countries by third world countries stood at $100 Billion in 1973, this figure shot to $1.5 trillion in 1993 after being compounded at an almost equal annual rate of 20%. If this figure continues to be compounded at the same annual rate, then in thirty years it will have climbed to close to $13.78 Quadrillion. This demonstrates clearly the unassailability of compound interest which not only makes the repayment of these debts almost impossible but also their economic improvement next to impossible. The repayment of these loans is even more inhuman, not to mention the irony in a situation where a poor person is consistently repaying something that instead of reducing is perpetually increasing. It can only be likened with a rich debt collector who takes every new possession of the poor debtor in a loan situation that he/she is sure will never be retired, not by repayment, of course. Other challenges that stare developing countries in their bid to improve their economies include capital flight and the conditionality that are attached to these loans among other.
The business environment of majority of the developing countries has been found to want which is precisely the reason why investors shy away from investing in these countries. In this regard the World Bank ought to be proactive in improving the environments of these countries so that they can attract more foreign investment. It is encouraging to note that it has already embarked in a number of efforts to improve the environment of these countries. Some of these endeavors that are worth a mention in this case includes; promoting reforms that will guarantee stable micro-economic-condition while inculcating a sense of long-term planning; enhancing the quality, reliability, and efficiency of the services of the government; investing the human resource of the country through the provision of education and health; encouraging and also playing a part in the development of a strong and proactive private-business-sector; and preserving the environment; among others.
One of the areas where the World bank has been severely castigating for not doing much to rectify concern the funding of corrupt and unaccountable regimes that continues to squander the funding at the expense of the welfare of its citizen. World Bank effort at encouraging private investment seems to be bearing fruit, as can be demonstrate by the influx of fund from the private sector in developing countries, however the likes of education, health, and similar fields that do not promise profits remain in dire need of funding from the likes of World Bank and other similar organizations.
Important players in the world economy
As important players in the world economy governments ought to among other things; endeavor to create supportive environments for investment in their respective countries, something that is particularly required in developing countries who are the worst victims of un-conducive investment environment.
The Group of Eight (G8) is another important player in the world economy, this is essentially due to the way they singlehandedly move the world economy forward. Their influence is another thing that has shaped to a larger extent the direction that the world economy takes. The emerging economies are other important players in the world economy, in this regard we can look at China's contribution in the economic improvement of the third-world-countries' economies, something that has also come with influence on these foreign countries. A practical example of this can be seen in the China economic activities in countries like Angola and its exploitation of its oil resources.
The private sector is another major player in the world economies. In this regard we have multinational corporations operating in several countries, and in the process creating jobs, improving the economic through taxes, and also involving in social programs that benefits the community in their corporate social responsibility programs. A good example of this can be found in.