2. Introduction
The world consists of almost 200 countries. Each country
has several cultures, religions, legal systems and
economy. All policymakers in mostcountries have a
prevalent objective to improve the living standard the
best countrymen. Economic development can be defined
as the standard of living. The last 30 years has been an
unusually good one for developing countries and their
mostly poor people - so good in fact that it has become
common place to look upon them as potential rescuers
of the world economy. Their economies have become
wider at never done before rates, resulting both in a
large reduction in extreme poverty and an important
expansion of the middle class. India, Korea, China and
other East-Asiancountries were responsible for the mass
of this great performance. Surely, rise of globalization,
growing international trade, new technologies, find of
new natural resource impact strongly to developments in
3. world economy. I will explain this paper argument of
development in world economy.
Economic development encompasses improvements in
a kind of indicators such as life expectancy and poverty
rates. Fundamentally, country's economic development
is connected to human development, which health,
education and other things.
4. The paper emphasizes two key dynamics helping growth.
The first is the development of fundamental capabilities
in the create of human capital and institutions. Long-
term growth depends on the accumulation of these
capabilities—everything from education and health to
improved regulatory frameworks and better governance
(Acemoglu and Robinson 2012; Allen and others 2013;
Behrman and Kohler 2013)
The second structural transformation - rises and
enlargement of new industries, move of labor from
traditional efficiencies to new ones. On the outside of
natural resource, high growth rates are nearly every time
the result of rapid structural transformation, especially as
industrialization. Poor economies can experience
structural transformation even when abilities are low and
institutions weak. This process helps East Asian countries
in the postwar time.
The past 30 years, Global economy changes rapidly.
Especially marked has been the evolution of world
economic integration products. Toyota, Pepsi, Viceroy or
Marlboro good examples for marks. Korea, Taiwan,
China, Hong Kong and Singapore already were growing
5. extremely rapidly by integrating their new young
industrial base with the high-tech industries.
Globalization came into being as this diffusion process,
created a new kind of catching up after world war two.
Especially starting in countries that opened their trade
and borders to foreign investment. So that new global
industry central around multinational companies could
use those countries as bases for global production
systems. That process backed by big breakthroughs in
technology better transport intermodal transport so-
called from ships to the backs of trucks, containerization
of trade through the standard twenty-foot containers
and of course the advent of modern computer assisted
design and manufacturing, the enormous breakthroughs
made possible by the Internet and by mobile phone.
Revolutionized the ability of companies to engage in
global production systems and thereby create globally
intergrated companies often with thousands of
employees operating in more than 100 countries and the
world's multinational companies thereby became the
main agent for to continuing transmissionof those
ripples around the world. Japan was a leader in its own
region in this and they develop two wonderful visual
6. metaphor for this called The Flying Geese model. If we
look at these geese information, have a goose flight in
front and back are others following the lead. This is how
economic development in Asia started it as well with the
industrialization first of Japan and then flying in
information just behind come Korea, Taiwan, Hong Kong,
Singapore, Indonesia, Malaysia, Thailand and Laos, but as
the leading country moves from textiles electronics then
from electronics to automobiles then from automobiles
to advanced information technology.
Specially over the past two decades growth of
globalization - the growing trade and financial integration
of the world economy. We can see bottom chart that
global trade and financial links increased fastly in the
past 50 years (percent of global GDP ).
7. The international financial integration rate change more
stunning; the past two decades rises three times. Total
global financial assets growth from $250 billion in 1980
to almost $70 trillion in 2010.Alsoglobal trade flows has
risen.
Foreign Direct Investment in the world economy has
increased last 25-20 years. FDI get wider more fastly than
world trade. So that, in billions of USD taken from the
8. United Nations World Investment Report in 2013. The
largest gain in foreign direct investment in the USA
followed closely by Japan ( 115 billion to almost 100
billion ). As a percentage increase Japan out performs
everyone with an increase of more than 400%. Other
important performers are South Korea with more than
200% increase in FDI and Hong Kong with a 25% increase.
China stayed put at nearly $85 billion. Russiafell from
$57 billion to $52 billion and South Africa decreased from
$6 billion to $4 billion. Also Brazil fell down from $35
billion in FDI to negative $3 billion, because investors are
taking money out of the country.
9. We can see graph that how change some countries FDI
inflows from 1990 year to 2011.
Technological change has made it a tangible reality. Last
30 years, the world has seen main advances in
communication, information processing and
transportation technology, including the Internet and
World Wibe Web (www).
Luckily, Citylab created a global technology index. First
on the list is Finland. Finland happens to be the
birthplace of one of the largest mobile phone producers
and innovators, Nokia. They also spend 3 and a half
10. percent of their GDP on technological research and
development. This amount to almost 10 billion dollars a
year. Finland also one of the best educational systems in
the world. Their advancement in biotechnology. Secondly
on the list is Japan. Japan well known for its contributions
to the technological revolution. Much of this success can
be attributed to government allocation and investment
during the past 50 years. Today Japan is one of the
leading tech innovators,with the second highest number
of patents per capita.
Transportation and telecommunication are creating
global village and audience. From Mexico to Canada,
from London to Tokyo, everyone can watch BBC, CCN,
National geography. Expansion of the Internet and
WWW (world wide web) are the latest expression of this
revolution. In 1990, near one million users were
connected to the Internet. In 2004 it growth to about 945
million. By 2005, the number of host computers had rose
to 317 million. In USA 60 percent of the population was
connected the Internet by 2003. According to Forrester
Research , the value of Web-Based transactions hit
almost $660 million in 2000. It was predicted to hit $6.8
11. trillion in 2004, with USA accounting for 47% of all Web-
based transactions. Also Internet helping to occur online
shopping which people to directly can buy goods or
services. Online shopping growth rapidly last 4-6 years.
Alibaba ,eBay and Amazon.com are largest of online
corporations. In 2012,Asia-Pacificrises their international
sales over 30% giving them near $433 billion in revenue.
That is a $69 billion difference between the U.S. revenue
of $364.66 billion. This is not small number.
12. Also transportation sector change the past 30 years.
Nowadays, we can travel easily, faster and more cheaply
than three decades ago. As for instance, a round trip
airline ticket from Baku to Moscow in the 1985 was near
$1.000,rightnow costs about $290.
The world population increase from 3 billion in 1965 to 7
billion in 2013,butthe development in world economy
grew rapidly than the world population. New medical
technology, vaccination helped decrease the death rate.
In 1960,lifeexpectancy at birth was about 55 years,
nowadays a newborn is expected to live near 70 years.
13. Development in world economy also impact to income in
world.
Table 2.1 Median and Average Income in World and
Selected Countries, 1988 and 2005
Economy Median
income
Average
income
Ratio
14. World
1988 846 3,523 4.16
2005 1,209 3,946 3.26
Percentage
increase
42.9 12.0 n.a.
United States
1988 12,327 14,819 1.20
2005 15,664 20,001 1.28
Percentage
increase
27.1 35.0 n.a.
China
1988 310 361 1.16
2005 1,013 1,303 1.29
Percentage
increase
226.8 260.9 n.a.
Brazil
1988 1,901 4,030 2.12
2005 2,107 3,890 1.85
Percentage
increase
10.8 –3.5 n.a.
Source; Author's calculations, based on Milanovic 2011.
Note: n.a. = not applicable.
This ratio has fallen importantly since the 1980s.In
1988,theworld's median income stood at $846.In
2005,incomeincrease to $1.209.Thegrowth in average
world incomes from $3.523 to $3.946.
15. I want to say brief history development in Dubai. Dubai in
the United Arab Emirates is home to the tallest
skyscraper in the world. It stands almost 3.000 feet in the
air and cost the city more than $1 billion. So how did the
Emirates, and Dubai in particular, get so rich?
Historically the UAE has been a prime location for
international trade. Situated at the mouth of Persian
Gulf, ships sailing around Asia and Africa made frequent
stops there. In the late 1960s,largeoil deposits were
found UAE, beginning a hugely lucrative oil industry. The
oil deposits proved to be so vast, that presently they
account for a tenth of the world's total oil reserves.
Crude oil exports are responsible for almost $400 billion
dollars of the UAE's GDP. Reports indicate that in
2010,onlyaround 1% of Dubai's economy was from oil
sales. So how is Dubai so wealthy? Dubai has historically
productive relationship with the United Kingdom. This
relationship granted them access to exclusive western
investments and partnerships. In 2000,theinternational
credit boom helped the Emirates solidify their place
Middle East as a financial. Foreign investments poured in
for ambitious projects like the world's tallest skyscraper,
16. largest resort and even a series of man-made islands.
Since then, tourism, trade and retail has flourished,
attracting a large number of visitors and immigrants.
Dubai was reported to be the world's 5th most popular
tourist destination in 2014.Additionally,thereare not
corporate taxes, making them an attractive business
destination.
17.
18. We must emphasize development in China last 30
years.Average annual growth rates of the GDP have
reached nearly 10 percent in the past 30 years. Chinese
has become the fastest growing consumer market in the
world today. Between 1978 in 2013 China's gross
domestic product increased around 10.55 percent
annually leading the country to become an engine
economic growth both regionally and worldwide.
Chinese government encouraged investing in the stock
market and made the prospect more enticing by relaxing
borrowing limitations and facilitating investing. This
caused widespread investment. So Shanghai market to
grow by more than 150%. Also China became the world's
largest recipient of foreign direct investment in 2004.
19. If we estimate 20 years into the future, most forecasts
now predict a rapid increase in the share of world output
accounted for by developing nations such as Indonesia,
Mexico, China, India, Brazil and South Korea, and in
proportion decrease in the share enjoyed by rich
industrialized countries such as Germany, Great Britain
and United States. The World Bank, for example, has
20. estimated that if current trends continue, by 2020, the
Chinese economy able be larger than United States.
