Developing countries are struggling with a variety of issues. One of the major issues to be addressed, however, is economy as strong economy positively affects the development of any society while financial constraints of a state and its citizens leads to social tension, political instability and so on. Therefore, it is crucial to focus on economic issues. Of course, countries have different backgrounds and need different approaches, but it is possible to work out the principle which can be employed by every developing country. These principles address major challenges and opportunities of the contemporary business world, which is globalised.
In the first place, it is clear that developing countries need to improve financial flows. The first principle to be considered is cooperation with international organisations such as the IMF and World Bank. The country has to prove that its economy is healthy enough to pay off the debt (Pinto 2014). This is possible when the country’s regulations and policies are aimed at increasing international cooperation. In other words, it is crucial to introduce transparent regulations which will suit the requirements and recommendations of the international organisation. Some states are quite closed as their citizens, and political leaders are trying to avoid any debts. Nonetheless, Milner (2005) stresses that international institutions’ activities have proved to be efficient in a variety of countries and can help stagnating economy to develop. Therefore, it is important to raise people’s awareness of the benefits of such cooperation.
The second principle to be discussed is openness for investment. This principle is closely connected with the one mentioned above. It also requires particular attention to legislation and regulations. Tisdell (2009) notes that China has shown remarkable progress, and its openness has played a central role in the process. China has attracted foreign investors, and this enabled the Chinese economy to boost. Every developing country can benefit from cooperating with international investors. Yu, Wai-Kee, and Kwan (2014) stress that this principle should imply at least two stages to be effective for a country. In the first place, the country has to develop free trade arrangements to make it possible for international investors to enter the market. The second stage should involve shaping the “economic growth model from an export-led growth model to an export-consumption-technology-led model” (Yu, Wai-Kee & Kwan 2014, p. 44). This will enable the country to allocate funds and develop its economy effectively.
The third principle that can help a developing country to facilitate the development of its economy is attention to small business. Goodwin et al. (2014) state that, supporting entrepreneurs, developing countries may create the necessary foundation for their economy’s growth. Thus, regulations have to ensure easy procedures for start-ups. It is noteworthy that corruption has to be eliminated, and transparency has to be a priority for policymakers. More so, people have to be encouraged to set their businesses and know about the opportunities they have. This process can involve cooperation with international organisations and investors. Of course, entrepreneurs often need financial support and financial services.
The principle mentioned above is closely connected with the next one, which implies the accessibility of financial services. People have to have access to a variety of financial services which will enable then to set and develop their own business (Lambin 2014). Lambin (2014) notes that several studies have been implemented and it has been proved that accessibility of financial products to citizens of several African countries as well as particular tribes has had a positive impact on the countries’ economies. It has also been noted that training can also be favourable for novice entrepreneurs, and it is more effective to provide training along with financial services. People should be aware of opportunities and challenges in the field they want to launch their business in.
The next principle is also linked to the previous ones. This principle involves attention to the level of employment. Thus, a developing country has to reduce the unemployment rate. This can be done with the help of supporting small business and openness to international investment. It is necessary to note that each country has to develop its strategies to solve the issue. For instance, one of these ways can be inner migration. Thus, Tisdell (2009) provides an example of the way inner migration facilitated the development of the Chinese economy. The researcher notes that the move to urban migration had a positive impact on the country’s economic development. Likewise, some countries may benefit from such kind of migration while others can utilise rural migration instead. The choice depends on characteristic features of the area and the entire country. Decreased unemployment rate leads to the increase of the buying capacity of citizens and the development of products as well as the entire economy.
Furthermore, it is essential to employ the principle of effective evaluation of economic growth. Costanza et al. (2009) claim that the evaluation of GDP is out-dated and does not reflect the actual growth of the country’s economy. The researchers stress that it is crucial to focus on sustainable development and utilise a comprehensive assessment strategy. This assessment has to include (or rather focus on) evaluation of people’s well-being. Even though a country may produce a significant quantity of products, its economy cannot be successful if its citizens are struggling with severe financial constraints. Researchers provide a variety of examples of developing countries which show significant GDP at certain periods, but this growth often has short-term benefits, and the country’s economy starts stagnating again (Costanza et al. 2009).
Finally, the sevenths principle is sustainability. Admittedly, developing countries are trying to undertake quick measures and try to get quick results. Nevertheless, these are often short-term benefits. To facilitate the development of a developing country’s economy, it is crucial to employ sustainable approach basing on the principle of social responsibility (Business in society n.d.). Some people believe that sustainability is appropriate for developed countries only as they have enough funds to support such incentives. For instance, it has been proved that this approach has enabled humanity to decrease the level of poverty dramatically (Towards the end of poverty, 2013). Researchers note that developed countries contributed greatly to the process of poverty elimination. At the same time, sustainable approach is also applicable in developing countries. The principle of openness may facilitate the process as foreign companies are accustomed to exploiting sustainable approaches and can develop a trend. Domestic companies will be bound to be sustainable to remain competitive. Policymakers have to encourage business people to exploit this principle. It is also possible to contribute to the development of responsible consumers who will force companies to develop sustainable approaches by buying from socially responsible businesses.
It is necessary to note that all these principles are universal and have to be used simultaneously. Each country can make a focus on a particular principle, but it is impossible to neglect the rest of them. As has been mentioned above, legislation plays a critical role in this process. Policymakers have to focus on transparency, sustainability, and progress (Hoekman, 2013). It will be difficult to implement all the strategies mentioned above without eliminating corruption.
What is more, training is also essential. One of the major issues most developing countries are facing is the lack of educated and experienced professionals who are ready to come up with efficient solutions. Therefore, it is critical to launching a wide educational program to raise people’s awareness of numerous opportunities. Of course, it is also important to make sure these people will have the opportunity to apply their knowledge and experience as brain drain persists in many developing countries.
To sum up, it is possible to note that the economies of developing countries can boost if seven principles mentioned above are employed. These principles are cooperation with international organisations, openness for investment, attention to small business, accessibility of financial services, attention to the level of employment, effective evaluation of the economic growth and sustainability. It is crucial to utilise all seven principles simultaneously, as each of them addresses different issues. Of course, each country will have to develop specific strategies based on the principles. These strategies should correspond to the country’s characteristic features. The use of this principle will be beneficial for countries, but there are risks if the country does not eliminate corruption, which persists in most developing countries.
Reference List
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Costanza, R, Hart, M, Posner, S & Talberth, J 2009 ‘Beyond GDP: the need for new measures of progress’, The Pardee Papers, vol. 4, no. 1, pp. 1-37.
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