Newly Industrialized Countries Essay Example | Topics and Well Written Essays - 2000 words

Newly Industrialized Countries - Essay Example According to the study the NICs face a challenge as to make their development sustainable they need to manage the process of development efficiently. They also need to combat poverty, preserve natural resources, and promote rural development. Not all decisions take by such NICs have proved to be right in the long run and the other developing countries have lessons to be learnt if they are seeking to grow faster. This paper highlights that countries can either opt to have an import-substitution strategy or export-oriented strategy. The first generation NICs included Spain, Portugal, Greece, Yugoslavia, Brazil and Mexico, Hong Kong, South Korea, Singapore and Taiwan. These countries started to lose their comparative advantage as unskilled labor became scarce and wage rates started to rise. This implies that trade plays an important role in helping the developing countries to take off. Stiglitz suggests that trade liberalization must be balanced in agenda, process and outcome. Trade liberalization should concentrate not only in sectors that developed countries have comparative advantage, like financial services, but also in which the developing countries have special interest like agriculture and construction services. The developing countries have a disadvantage in participating in negotiations. Not having a representation in WTO serves as a disadvantage. Developing countries face greater vola tility and opening to trade contributes to that volatility. Developing nations have persistent problems of high unemployment. Trade liberalization is necessary but not sufficient to reap full benefits from integration into world economy. The costs of liberalization in developing nations are higher. Thus, the developing countries seeking to grow fast should ensure that they have a comprehensive approach in liberalizing trade.