Investment, World Economy and Poor Countries

Dragan Momirovic, Marko Jankovic and Maja Randelovic

Ekonomika, Journal for Economic Theory and Practice and Social Issues, 2016, vol. 62, issue 01

Abstract: World income is unevenly distributed among developed and rich countries on the one side and the poor and less developed countries on the other side. Poor countries in an attempt to develop its economy faces multiple barriers, the most important population growth, deficiency of resources and capital, shortage of investment in human capital traditions, investment in infrastructure, a low productivity in agriculture and conflicts. Poor countries are trying to develop their economies exporting primary goods order to achieve the benefit of export revenue for the procurement of capital goods. However, fluctuations in the real prices of primary export goods on the world market that can range up from to 40%, disabling poor countries to fully substitute the export of primary goods import capital equipment, especially when exports focused on one primary good. To avoid decreasing a trend in real prices and large price fluctuations around this trend, the poor countries, (primary producers) can only strengthen their economies and increase economic growth of the within global economy, pooling, in order to ensure the stabilization mechanism for certain primary good. Less developed countries consider that achieve greater developments before focusing on industry than on primary production. That is why those due to a shortage of capital, unfavorable resorting to borrowing. Many poor countries cannot require repayment of debt and the rescheduling. Therefore, it is economically justified to those its economic development based on unused comparative advantages, structural adjustment through increased investment, productivity and efficiency. Poor countries require help through international transfers, because they consider that many countries have enriched the colonial exploitation of their resources.

Keywords: International; Development (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/288700/files/1-2016%20pages%2083-96.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:sereko:288700

DOI: 10.22004/ag.econ.288700

Access Statistics for this article

More articles in Ekonomika, Journal for Economic Theory and Practice and Social Issues from Society of Economists Ekonomika, Nis, Serbia
Bibliographic data for series maintained by AgEcon Search ().