Competitiveness of Developing Countries in the World Economy

Abstract

The article, based on a series of computations and models, shows that during the last thirty years developing countries, by applying their comparative and dynamic advantages (among them low, although rising, levels of wages and steeply increasing levels of educational attainment and investment rates), have on the whole substantially enlarged their positions in the world economy — in global GDP, industrial production, gross fixed capital formation, R&D expenditures, exports, and inflows of foreign direct investment. Despite acute ecological, financial, social and political problems that Asian, African and Latin American countries are grappling with, many (including the largest) of them, by implementing institutional reforms and rational economic policies, have by and large benefited from ongoing globalization and substantially progressed in catch-up development, productivity growth, reduction of poverty and reaching levels of global competitiveness which turned out to be considerably higher than could be expected judging by their GDP per capita standards.