Global Economy Research Paper 2022

Economics 1
Global Economy
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Economics 2
Global Economy
ESSAY 1
Technology in the Globalised World Benefits all Developing Countries
Introduction
The international movement of knowledge and technical expertise has become a common
agenda globally, thus leading to the advancement of the world economy since the early 1970s.
Science is expanding, which also leads to increased commodity diversification in the world trade
arena. Technological progress has made it easy globally to receive foreign direct investments
through transnational corporate (Kumar and Siddharthan, 2013). As a result, developing
economies are in a pole position to acquire transmitted innovative ideas across the globe. New
opportunities are therefore opening to benefit the available stock of resources in these countries,
which in turn earns them direct foreign investments.
According to Vivarelli (2014), technological integration in developing economies has
increased, though there are disparities between countries in terms of technological progress.
However, given the increased technological progress in emerging economies, the manufacturing,
service, and agricultural industries are well placed to enhance in terms of growth and
development. It, therefore, calls for increased human capital to help absorb and integrate the
advanced technological growth in the developing economies as well as economic policies. As a
result, this paper will discuss the relevancies and impacts of the globalization of the technology
on the developing countries and its implications for the development strategies and policies.
Benefits of Technological advancement in Developing Economies

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The adoption of technology in the developing economies has led to profound effects on
the economies of scale through the reduction in the national costs of production, the
establishment of standardized production qualities, and effectiveness in the e-communication
(Passaris, 2019). Unfortunately, global technological growth has remained an adoption rather
than an innovation in most of these economies. As a result, the need for technologies has
remained a significant concern in terms of technological diffusion in low-income economies,
leading to unevenly distribution within countries (Van Dijk, 2013). The rapid spread of
technology in developing countries stimulated by the introduction of the internet has led to
positive cultural changes. Globalization can also lead to cultural awareness and promote
diversity in the case of assimilation. However, due to security reasons, some developing
economies are not able to experience the benefits of technological growth.
New technology has reduced the prices of goods and services in most developing
economies. As a result, product diversification has benefitted the developing economies in the
global market, thus improving the per capita income of these countries (Rodrik, 2014). For
example, mobile phone banking, known as M-Pesa introduced by a telecommunication industry,
Safaricom in Kenya, has led to an increased business transaction for the agricultural products. As
a result, consumers are now able to buy and sell goods online without physically having the
goods in-store. The telecommunication development has given the poor citizens in these
countries access to long-distance communications without incurring costs (Asongu, 2015).
Another example is the internet-based tractor plant form in Nigeria, the “Hello Tractor," which
has enabled smallholders to increase their productivity level without having to possess the scale
of production.

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Advanced technological growth has been commended for its role in transforming the
large-scale farming in Latin America and Africa. The uses of drones, GPS, data, and high-speed
telecommunication machines have facilitated improved service delivery. As a result, farming
through irrigation has been optimized in the developing economies where pesticides and
fertilizers are enabled through technological advancements (Evans, 2014). As a result of
improved global technology in the developing economies, countries are now able to depend on
themselves during hunger periods since the farm productivity and diversification are encouraged.
Globalized technological advancement in developing economies has not only changed
how people produce goods and services and communicate, but it has also allowed for extensive
innovative work where people can create and test new ideas through product development
(Passaris, 2019). In Rwanda, drone technology has been used to deliver blood in remote areas,
and 3 D printing has helped to provide spare parts for the demand for animation machines in the
developing economies. Cell phones have become prevalent in developing economies where they
are used by underserved communities to provide information about health issues. As a result,
mobile health technologies have benefitted the developing economies through the unprecedented
entrance to resources that are important for life-threatening diseases such as malaria and
HIV/AIDS. In Uganda, there exist a non-invasive malaria detection application for the cellular,
where it uses a light sensor to detect malaria in the body (Asongu, 2015). As a result, patients do
not need to go to doctors to be diagnosed but just for treatments.
According to the World Health Organization (2015), more than 1.8 billion people in
developing countries lack clean water, with more than 2.5 billion people lacking sanitation
facilities. As a result, technological advancement through engineering expertise has played a
significant role in reducing this number. This is through the building of the underground pipe

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connections, which are well protected, thus increasing the accessibility of clean water and
sanitation.
Developing economies are slowly but steadily increasing their role in the energy industry.
The renewable energy industry, which is a source of the wind, solar, and hydropower energies, is
increasingly taking shape (Tyagi et al., 2013). This is because of technological progress that
these countries are experiencing. For instance, China solar Manufacturing industries are regarded
as the leading producer of solar photovoltaic (PV), where it produces 67 percent of the world
solar energy (Berger and Martin, 2013). As a result, manufacturers of the solar PV system have
spread in most developing countries in Africa and Asia. India is regarded as among the
promising economies in terms of wind power development (Van Dijk, 2013).
Technological advancement has also promoted international trade. As a result,
developing economies have managed to increase their GDP output due to growth in the
manufacturing industries such as the textile and clothing industries. According to Panagariya
(2013), developing economies account for half of the world textile exports, and approximately
70 percent of the total world clothing industry. Given the growth in technology, emerging
economies have experienced an increase in the GDP per capita because of favorable terms of
trade.
Since the manufacturing industry is the cornerstone of the economic growth of the
developing economies, technological advancement in the sector will lead to more advanced and
stable production (Van Dijk, 2013). With a dynamic manufacturing economy supported by
technological growth, productivity from the manufacturing industry has increased considerably,
leading to stable economies in most of the developing economies, including South Africa, China,

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Brazil, and Nigeria. As a result of technological innovativeness, developing economies can
reduce the unemployment rate, given that there are increased economies of scale. This is
because the basis of international trade for any country is the surplus in the production to the
other economy. With the use of technology, production level increases in the developing
economies, thus increasing international trade. For instance, in the developing Asian economies,
the Philippines ' export on electronics helped to accelerate its GDP growth to about 5 percent in
the early 2000s (Ofreneo, 2015).
Production technology in the developing economies helps them to decide on the structure
of trade and global engagement. What a country produces is wholly dependent on its endowment
of the physical and human capital, natural resources, and labor (Rodrik, 2014). For instance, in
Southern Asia, mango is the significant planting due to a favorable tropical climate. Besides,
since the islands of Southern Asia are friendly to tourism, information technology can be used to
enhance the tourism sectors such as hotel bookings, traveling, and marketing. As a result, the
international trade competition for Southern Asia will help it to exert a market base industry on
its technology and innovation in mango production (Kumar and Siddharthan, 2013). In terms of
international trade, these countries can export massive mangos, processed, and packed as
finished products into the world trading markets. This will allow it to earn revenue from trading
with developed economies, thus promoting economic growth and development.
Conclusion
For developing economies to compete with the advanced economies, they must have a
positive stimulus that promotes technological advancement and innovations. These stimuli must
be used to help the national governments adopt policies that will help to grow the technology.

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Most developing countries still lack infrastructural capabilities in terms of human capital to
develop technologies. However, the importance of technology in the field of trade,
manufacturing, farming, engineering, and health is an indication that technology in the
globalized world is essential for developing economies. To compete globally, emerging
economies must take advantage of their comparative advantages in terms of trading and promote
areas that will increase their GDP growth. As a result, the government and policymakers should
encourage technological growth and advancement to compete in the free world trade era. This
paper, therefore, recommends that developing countries should be proactive in adopting new
digital technologies, including GPS, drones, and 3D printings. This is because technological
growth continues to penetrate over the years, thus prompting developing economies to take
advantage of the new opportunities for economic growth and development.

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References
Asongu, S., 2015. The impact of mobile phone penetration on African inequality. International
Journal of Social Economics, 42(8), pp.706-716.
Berger, B. and Martin, R.F., 2013. The Chinese export boom: an examination of the detailed
trade data. China & World Economy, 21(1), pp.64-90.
Evans, B.G., 2014, September. The role of satellites in 5G. In 2014 7th Advanced Satellite
Multimedia Systems Conference and the 13th Signal Processing for Space Communications
Workshop (ASMS/SPSC) (pp. 197-202). IEEE.
Kumar, N. and Siddharthan, N.S., 2013. Technology, market structure and internationalization:
issues and policies for developing countries. Routledge.
Ofreneo, R.E., 2015. Growth and employment in de-industrializing Philippines. Journal of the
Asia Pacific Economy, 20(1), pp.111-129.
Panagariya, A., 2013. India and China: trade and foreign investment. Economic reform in India:
Challenges, prospects, and lessons, p.96.
Passaris, C.E., 2019. The Economics of Internetization. In Advanced Methodologies and
Technologies in Network Architecture, Mobile Computing, and Data Analytics (pp. 1714-
1729). IGI Global.
Rodrik, D., 2014. The past, present, and future of economic growth. Challenge, 57(3), pp.5-39.

Economics 9
Tyagi, V.V., Rahim, N.A., Rahim, N.A., Jeyraj, A. and Selvaraj, L., 2013. Progress in solar PV
technology: Research and achievement. Renewable and sustainable energy reviews, 20,
pp.443-461.
Van Dijk, J.A., 2013. A theory of the digital divide. In The digital divide (pp. 49-72). Routledge.
Vivarelli, M., 2014. Innovation, employment and skills in advanced and developing countries: A
survey of economic literature. Journal of Economic Issues, 48(1), pp.123-154.
World Health Organization, 2015. A WHO external quality assurance scheme for malaria
nucleic acid amplification testing: 8–9 June 2015, London, United Kingdom: meeting report.
World Health Organization.

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ESSAY 2
Developing Countries Face Challenges in Global Trade in Agriculture
Introduction
In recent years, the protection of agricultural products and their impact on the developing
economies have attracted substantive references. While the manufacturing sector has had a
decline in the global protections due to world trade policies, mostly in the developing economies,
most developed and developing economies still find it essential to protect their agricultural
products at all costs (Bruinsma, 2017). The protection of farming products has continued to
attract diverging opinions among countries in the global trade negotiation. This was witnessed in
the Cancún Ministerial Meetings in 2003, where industrial economies put high protection
policies on their products, thus rendering the developing economies powerless to negotiate and
trade their agricultural products (Baracuhy, 2016). As a result, this paper will analyze the trend
and reasons for global trade challenges for the developing economies' agricultural products. It
will conclude with concrete recommendations on how to advance the developing economies
agrarian products for it to compete with the industrial economies.
Trends and Challenges
Policies made in the global agricultural market are very vital for developing economies
beyond just price changes caused by the global transformation. Most developing economies have
small urban populations, thus increment in its agricultural export will accelerate growth than the
expansion of domestic market demand (Anderson et al., 2013). Even though most developing
economies' agricultural products are domestically used for home consumption, its export and
domestic usages are typically related.

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Export for the agricultural products from developing countries plays a major economic
role through income generation and modernization of the farming industries. There is also job
creation in agricultural processing and marketing in the developing economies, which in turn
leads to higher living stands (Yang and Zhu, 2013). Although most of the successful developing
economies have not wholly relied on agricultural production for their exports and economic
growth, agricultural growth has a disproportionate effect on the vicious cycle of poverty in
developing countries. Since more than half of the total population in the developing economies
live in rural areas, it, therefore, shows that poverty in a rural area is rapid than in urban areas
(Bruinsma, 2017).
There have been frequent trade disagreements between the developed and developing
economies where developing economies have agriculture-based economies. As a result, this has
forced the developing economies to heavily rely upon the proceeds from the exports from the
agricultural products (Streeten, 2016). However, the market for these goods is highly competitive
i.e., prices for agricultural products are elastic while those of manufacturing products from
developed are stable in the global market. Hence, as the prices for the agricultural products
exported fluctuate, there will be unfavorable terms of trade in terms of the ratio of export to
import prices. This, therefore, affects the domestic economy, which in the long run, leads to a
low agricultural sale in the global market for the developing economies (Olakojo, 2015).
There have been increased specific tariffs levied on the agricultural products from
developing countries rather than the value from the commodities. As a result, this has reduced
the access to the global market for the agricultural products since the Uruguay Round ended talk,
which offsets the benefits of the lower ad valorem tariffs (Bagwell and Staiger, 2014). Since the
agricultural products in the developing countries have elastic demand price, imposing levy tariffs

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by the developed economies has led to a decline in the global market for agricultural products.
Even though during the Uruguay Round countries talk, the agreement was for the conversion of
quotas on agricultural products into tariffs; developed economies still find it uneasy about
accepting the free entry of the agricultural products into their economies (Swinbank, 2018). As a
result, these tariffs tend to discriminate the exportation of agricultural products from developing
economies whose producers generally specialize in the lower-price quantity of agricultural
exports. Even as the preferential agreements granting the developing economies a duty-free
access to the market, there still exist non-barriers that restrained these countries from global
market entry ((Bagwell and Staiger, 2014).
Developing economies have minimal access to resources that would accelerate research
and development in agricultural production. As a result, very few varieties of crops are available
to support the increased overpopulation rate in these countries. As the market and demand for
agricultural products increases, the needs for finished goods are also increasing (Anderson et al.,
2013). As a result, most of the developed economies try to acquire the market through large
production of different varieties, which are cost-effective in the global market. Since the
developed economies have monopolized the bargaining powers for the production of goods and
services, the developing economies are, therefore limited in terms of market accessibility
(Baracuhy, 2016).
World market exposure towards the price risks and product hoarding has become a
regular practice in most developing economies. A farmer in the developing countries has to deal
with trade liberalization where the market is perfectly competitive, and government support for
the global market access has been discontinued. Lack of government support in terms of finances
to support the farming industry has led to limited capital and credit accessibility. Besides, poor

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geographical locality and drought has had a significant impact on the decline of the agricultural
products from developing economies. In comparison to developed economies where some
countries are a landlord but still manages to carry out irrigation in large scales. For example,
Israel is carrying out large scale irrigation on 70 percent of its land compared to countries like
Egypt in Africa, where just a portion of the property is used for irrigation purposes (Moris,
2019). As countries produce on a large scale, marginal cost also increases, thus minimizes the
risk associated with production and sales in the global market.
High level of subsidies and product protection provided to agricultural products in the
developed economies continue to cause serious problems for the developing countries'
agricultural products (Seshadri, 2019). As a result, the domestic support provided by the
developed economies encourages its producers to do much production, thus increasing the global
supply for agricultural products. In the long run, overproduction in the developed economies will
lead to a decline in the global price for agricultural products. As a result, the low price makes it
impossible for agricultural producers in the developing economies to compete domestically and
internationally (Baltzer, 2013). This will reduce the incentive to produce quality agricultural
products in the developing economies.
High-level border protection in most developing economies has impeded developing
countries' agricultural exports. Even though some developing economies' exports are benefiting
from preferential access to the highly protected borders in the developed economies, it has not
been easy to achieve a common consensus on how to eliminate the barriers (Mohan et al., 2013).
Trade preferences apart from the Generalized System of Preferences (GPS) can be challenged
within the World Trade Organization (WTO) with increased anxiety to convert the non-
reciprocal policies such as Lome Convention into free trade agreements. However, several

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developing economies depend on the trade preferences for the global market shares for their
exports; thus, their concern should be taken into consideration. This can be achieved by reducing
the strict border protection in the developed economies to ensure that developing economies
benefit from the preferential deals and compensated to a more advanced competitive
environment (Baltzer, 2013).
The presence of the special safeguard provision by the developed economies has
diminished the growth and development of agricultural product share of the developing countries
in the global market. Special Safeguard (SSG) is the condition where an importer is allowed to
increase the tariff above the agreed level in response to increased import products (Baracuhy,
2016). However, most developing economies have no such measures to invoke the SSG
measures while developed economies keep on applying the SSG on the agricultural products
from the developing economies. As a result, export levels in products like cereal, fruits, meat,
vegetables, and oilseeds have been disregarded in the global agricultural market.
Conclusion
Agricultural commodities remain the main export products in developing countries. Even
though elasticity in prices for the demand of these products has been a significant issue, trade
policies implemented by the developed economies have played a significant role in negatively
exploiting the agricultural products from emerging economies. Uses of quotas and subsidies
have been regarded as some of the policies that have led to a declining market for agricultural
products in the global market from developing economies. However, through the WTO and the
Uruguay round talks, some of the trade barriers for the agricultural products from emerging
economies were reverted, and new policies were agreed upon. These included preferential trade

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agreements between developing economies and developed countries to help promote agricultural
products from the developing countries. It remains a predicament to promote agricultural
productivity growth from developing economies to the international market due to a lack of
technological advancements to help in the production of diversified products. Also, lack of
capital and credit provision by the government to farmers has led to low output compared to
developed economies. As a result, this paper recommends that for the agricultural products from
emerging economies to gain continuous access into the global market, there should be constant
provision of capital and credit, and nation to nation agreement, apart from the WTO principles
that promote the developing countries agricultural production.

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References
Anderson, K., Rausser, G. and Swinnen, J., 2013. Political economy of public policies: insights
from distortions to agricultural and food markets. Journal of Economic Literature, 51(2),
pp.423-77.
Bagwell, K. and Staiger, R.W., 2014. Can the Doha round be a development
round. Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-
First Century, 91.
Baltzer, K., 2013. International to domestic price transmission in fourteen developing countries
during the 2007-08 food crisis (No. 2013/031). WIDER working paper.
Baracuhy, B., 2016. Agriculture and the WTO negotiations. The New Economic Diplomacy:
Decision-Making and Negotiation in International Economic Relations, p.24.
Bruinsma, J., 2017. World agriculture: towards 2015/2030: an FAO study. Routledge.
Mohan, S., Khorana, S. and Choudhury, H., 2013. Why developing countries have failed to
increase their exports of agricultural processed products. economic affairs, 33(1), pp.48-64.
Moris, J.R., 2019. Irrigation development in Africa: lessons of experience. Routledge.
Olakojo, S.A., 2015. Export Commodity Prices and Long-Run Growth of Primary Commodities-
Based African Economies.
Seshadri, V.S., 2019. Challenges Facing Developing Countries in the International Trading
System. Global Trade and Customs Journal, 14(7), pp.336-342.

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Streeten, P., 2016. What Price Food?: Agricultural Price-Policies in Developing Countries.
Springer.
Swinbank, A., 2018. Explaining the Failure of Doha to Facilitate Completion of CAP
Reform (No. 2038-2018-2991).
Yang, D.T. and Zhu, X., 2013. Modernization of agriculture and long-term growth. Journal of
Monetary Economics, 60(3), pp.367-382.