- October 5, 2012
- Posted by: essay
- Category: Term paper writing
The economic development of the world is characterized by the substantial disparity between developed and developing countries. In fact, the gap between developed and developing countries persists. Nevertheless, some countries, such as India, are considered to be very perspective in regard to their economic development and potential (Rodrick, 2002, p.114). In fact, economy of India are emerging and their competitive position in the world economy grows more and more significant to the extent that it is even possible to speak about the development of new centers of the world economy. In other words, the emergence of Indian economy can make this country a serious rival in competitive struggle with developed countries that naturally provokes counteraction from the part of the latter. In such a situation, it is possible to speak about closing the gap between developing countries such as India and developed ones, such as the USA.
At the same time, it is important to lay emphasis on the fact that the elimination of disparity between India and developed countries, such as the USA, is possible on the condition of the stable development of the domestic market and strengthening of the position of the country in international markets. The latter is not less important than domestic market because, in the contemporary business environment, countries need to expands their share in international markets to maintain their competitive position. Obviously, international markets allow India to accelerate its economic development and the example of other Asian countries, such as Japan, South Korea, and others proves the fact that the develop of export-oriented industries can accelerate the economic development since international markets can consume a large share of all products and services produced by the national economy of India and which cannot be fully consumed by the domestic market because of its limited consuming power.
In such a situation, it is obvious that the stable development of domestic market of India and its international markets expansion are possible on the condition of a stable economic growth. The rapid growth of India started in the mid-1970s and is traditionally associated with the Green Revolution, which provided the country with sufficient supply of agricultural products that decreased starvation and death rates in the country. The positive effects of the Green Revolution were substantially enforced by the rapid industrialization of the country which was facilitated by the favorable demographic situation due to the high birth rates. At the same time, in the course of time, due to the industrialization of the country and steadily growing educational level of Indian people, the national economy started to develop high technologies, including IT and airspace technologies that is the currently may be viewed of the further progress of the country (Rolf, 2000, p.186).
In such a way, today, India attempts to enter new knowledge-based industries to compete with developed countries in the international market. In this respect, the USA had traditionally the leading position since it was developed countries mainly that were leaders of scientific and technological development. As a result, today, the USA control a large share of international market and its economy is oriented on the development of knowledge-based industries. The current efforts of India to increase its presence in the international market by means of high tech products and services are highly prospective.
At the same time, it is obvious that India and the USA are quite different. In fact, the USA is mainly oriented on the domestic market and the situation on the domestic market is crucial for the USA. The recent economic recession was actually provoked by problems in the mortgage market and the country still stumbles because of the decrease of consumption in the domestic market and general economic decline. In stark contrast, India is mainly concerned with international markets because, in spite of its progress, it still has a few industries which allow the company to export its products and services and the situation in international markets influences substantially the development of Indian economy.
As for the domestic market of India, it is incomparable to the domestic market of the USA. In fact, the majority of population of India lives in poverty, while the local middle class is poorly developed. The gap between rich and poor is huge and the domestic market cannot provide the country with the opportunity to accelerate its economic development. Therefore, the country focuses on international markets where India can sell its products and services and grow richer accelerating economic development. At this point, it is worth mentioning the fact that India has a considerable advantage compared to the US in the labor market since the labor force in India is consistently cheaper than in the USA that facilitates entering new markets for Indian companies.
Thus, in conclusion, it should be said that India is a developing country that is mainly oriented on international markets, while the USA is traditionally oriented on the domestic market.