Vitalii Albertovich Meliantsev

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.

This paper, which is based on a series of author’s calculations and models, analyzes current situation, trends, factors and major determinants of Least Developed Countries’ (LDCs’) economic development during the last three to four decades. It is argued that despite many acute problems that they do not cease to face, several dozens of LDCs have recently started to progress on the path of rather fast and more or less sustained economic growth. Although LDCs are still grappling with severe forms of multidimensional poverty, substantial dearth of human capital and modern infrastructure, adequate economic, social, political and legal institutions, and encounter considerable foreign economic and climatic shocks, they on average during the last decade and a half managed to have markedly increased their rates of growth of per capita GDP and human development index. It should be underscored that LDCs having benefitted from significant improvement of barter terms of foreign trade, some upgrade in government effectiveness and implementation of a series of pragmatic economic reforms, have succeeded in expanding rates of growth of agricultural and manufacturing production and exports. The level of their gross capital formation has by and large considerably risen due to significant enlargement of the share of domestic savings related to GDP, FDI inflows and workers’ remittances. It would be incorrect to overemphasize the progress achieved by approximately three dozen LDCs (as the basis of their growth remains shaky), but, nevertheless, they have demonstrated noticeable improvement in dynamics of their investment efficiency and productivity growth.

In the article, based on a series of computations and models, it is shown that despite the progress achieved in the world during the last three to four decades in technologies, innovations, and international economic links, paradoxically, there occurred a substantial slowdown in global economic growth and total factor productivity and human development index dynamics — primarily in DCs, but in EMs as well. Although some part of this phenomenon is due to underestimation of quality in growth dynamics, “new normal” of retardation in growth is real. It stems from massive distortions in the global economy and its main constituents brought about by its excessive financialization, substantial increase in indebtedness, huge rise in levels of inequality of incomes and assets. Although it is clear that some reallocation of incomes from super-rich to less well-to-do, especially in EMs, that could be undertaken by means of heavier taxation of the former, can boost development of human capital, promote acceleration in world economic growth and convergence in the global economy, the political mechanism of this Keynesian world-wide reform is very hard to enact.

In the article, based on a series of computations and models, it is shown that despite the progress achieved in the world during the last three to four decades in technologies, innovations, and international economic links, paradoxically, there occurred a substantial slowdown in global economic growth and total factor productivity and human development index dynamics – primarily in DCs, but in EMs as well. Although some part of this phenomenon is due to underestimation of quality in growth dynamics, “new normal” of retardation in growth is real. It stems from massive distortions in the global economy and its main constituents brought about by its excessive financialization, substantial increase in indebtedness, huge rise in levels of inequality of incomes and assets. Although it is clear that some reallocation of incomes from super-rich to less well-to-do, especially in EMs, that could be undertaken by means of heavier taxation of the former, can boost development of human capital, promote acceleration in world economic growth and convergence in the global economy, the political mechanism of this Keynesian world-wide reform is very hard to enact.

In the article, based on a series of computations and models, it is shown, that global economy which on the whole had been rapidly progressing since the start of the 19th century, during the last thirty years has noticeably slowed down rates of its growth. There are investigated causes of the paradoxical phenomenon, when, despite the emergence of foundations of knowledge-based economy in the advanced countries, there came about, according to generally accepted statistics, substantial decrease in growth rates of their GDP and Total Factor Productivity. Also are specified the scales, determinants and major restraints of the Asian economic upsurge as well as major components and contradictions of modern Russian developmental model. There also are provided an assessment of socio-economic and a number of political consequences of unbalanced growth of the world economy and a prognostic estimate of contours of world economic growth for the nearest decade.

In the article, based on a series of computations and models, it is shown, that global economy which on the whole had been rapidly progressing since the start of the 19th century, during the last thirty years has noticeably slowed down rates of its growth. There are investigated causes of the paradoxical phenomenon, when, despite the emergence of foundations of knowledge-based economy in the advanced countries, there came about, according to generally accepted statistics, substantial decrease in growth rates of their GDP and Total Factor Productivity. Also are specified the scales, determinants and major restraints of the Asian economic upsurge as well as major components and contradictions of modern Russian developmental model. There also are provided an assessment of socio-economic and a number of political consequences of unbalanced growth of the world economy and a prognostic estimate of contours of world economic growth for the nearest decade.

In what follows we will try to assess the contribution of Lee Keun – the winner of the 2014 Schumpeter Prize and Professor of Seoul National University – to the theory of breakthrough economic development, based on the case of the Republic of Korea (RK).

Based on a series of indices and models calculated by the author, the article shows that the contemporary second major wave of globalization, substantially more extensive than the first (from the last third of the nineteenth to the early twentieth century), has had a major but contradictory impact on the economic development of advanced countries and, even more so, of developing countries. It has enabled some of the latter, including China and India, to carry out rational institutional and economic reforms and gain ground in the world economy at the expense of Western countries and Japan. However, globalization has also energized market forces and significantly aggravated economic, financial and socio-political instability around the world.