Changes in the Global Economy and How These Changes Affect the Development Progress and Development Pattern of the Developing Countries

Full name: To Thi Thu Huong

Student ID: 095 105 0049

Development Economic Assignment

DISCUSS THE CHANGES IN THE GLOBAL ECONOMY AND HOW THESE CHANGES CAN AFFECT THE DEVELOPMENT PROGRESS AND DEVELOPMENT PATTERN OF THE DEVELOPING COUNTRIES?

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or the past twenty years, the world economy has gone through a lot of both quantitative and qualitative changes which come under the impacts of the globalization. The recent boom of economic globalization has been largely accounted by developed economies integrating with less developed economies, by means of foreign direct investment, the reduction of trade barriers, and in many cases, cross border immigration. Through the process of global integration, the market economy manifested itself in many countries with the evidences of multinational corporation establishment, industrial outsourcing and cross-border movement of capital and technology. As Thomas L. Friedman was examining the impacts of a "Flattening World", he realized that globalized trade, outsourcing, supply-chaining and political forces have changed the world permanently for both better and worse. Of course, the developing country bears no exception in this worldwide trend, and in fact, it has been affecting those nations’ development pattern positively and negatively.

Globalization is the new buzzword that has come to dominate the world since the nineties of the last century with the end of the cold war along with the break-up of the former Soviet Union. As defined by Oxford Dictionary, globalization is "the fact that different cultures and economic systems around the world are becoming connected and similar to each other because of the influence of large multinational companies and of improved communication”. The increased reliance on the market economy, the renewed faith in the private capital and resources, and the process of structural adjustment spurred by the studies and influences of the World Bank and other International organisations have started in...