Developing countries(developing economy) - 2 questions

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ECONOMY IN THE DEVELOPING COUNTRIES

Introduction

The developing countries comprise the largest percentage in the world These countries are struggling in many areas of development such as political , social and economical issues (Wayne , p63 ) The industrialization level has not reached a self-sustaining level and generally the economic levels . These countries comprise the `third world countries . Most of them rely on foreign financial support to boost their economies and fund some other projects . The food produced is not even adequate to support

the needs of its citizens leave alone surplus for sale . The infrastructure is generally poor and thus transportation of farm inputs and output hinders trade . The farmers are usually unable to export their outputs and thus the economies of scale are very low (Wayne , p59

Static and Dynamic Gains from Trade

Trading encourages free trade . Countries feel free to trade with each other and thus it improves economies of scale . In developing countries it encourages mass production of goods . There are gains from trade which always remain the same (static ) and those gains which keep on changing (dynamic . Through trading , the countries forge economic integration and the relations among the trading countries are improved and they create friendly tries . This means that in times of need , they willingly assist each other . It also ensures free flow of goods (Wayne , p78 ) Countries encourage selling their goods in the countries in which the trading relations exist . Other gains of trade are opening up of bs . In some cases , the trading partners allow their nations to cross over to their partners and official documentations such as passports are done away with (Wayne , p88

In developing countries , trade promoted international relations with other countries and thus their partnerships is strengthened and further consolidated . For instance formation of communities who share business activities , such as COMESA , which united trading partners in some countries in Africa (Wayne , p89 )Trade also promotes peace and harmony in countries since they will be having similar interests which they need to protect . Trade , in developing countries avoids over-reliance on foreign donors . This avoids imposition of conditionalities on the developing countries which can at times be a burden to their citizens It also promotes the sovereignty of a country , since the gains of trade put them in charge of their countries and hence outside countries cannot make decisions on their behalf . The trading countries are in control of their country and this guards them from external influences (Wayne p78

The dynamic gains from trade are technological growth . Through trading the countries acquire new and better ways of trading . For instance , the countries can acquire modern and more efficient machines of production and thus the costs are cut down considerably . Hybrid seeds are easily gotten from their trading partners and thus the growing and changing needs of the population are met . The countries are also in a position to devise and update strategies of trading due to technological advancement (Wayne , p78-79

Through trading , the developing countries...