developing countries are also called underdeveloped or third-world countries. Majorcharacteristics of these countries are high infant mortality, illiteracy, short life expectanyand poor educational and health system. Fact that is really concerning is that 95% of theworld`s AIDS victims are found in developing economies.Governments are often severely indebted, countries such as Africa, Latin America andSouth Asia have debt levels which are bigger than the annual GDP. Much of thedeveloping economies poverty is the result of government policies that discourageentrepreneurship, trade and FDI. As we all know international trade and investment helpto stimulate economic growth, create jobs, raise income and lower prices for productsand services. When countries are cut off from the global economy, the result isincreased poverty and unemployment.Differences between the three major groups:By analyzing a country in terms of its stage of economic development, it is easy to gaininsight into at least 3 characteristics: the purchasing power of its citizens, thesophistication of its business sector, and the level of its industrial development. Thisanalysis is very important because altough each country group poses distinctiveopportunities it also poses different risks.2
Emerging marketsare found in East and South Asia, Eastern Europe, Latin America,and the middle East. Emerging maket economies are changing so dynamically, someeconomists say that some countries have developed beyond the emerging marketboundaries. Some countries that are currently classified as developing economies havethe potential to become emerging markets in the near future. These „frontier“ economiesinclude the European countries of Estonia, Latvia, Lithuania, Slovakia; the LatinAmerican countries of Costa Rica, Panama, Uruguay etc. Privatizationprovides manyopportunities for foreign firms to enter transition economies by purchasing former stateenterprises.Since market reforms in the late 1970s, China has achieved big economic growth, often10 percent or more per year. Although income per person is still modest at around $6500, in 2009 China stood as the second largest economy in the world (after the UnitedStates). After joining the WTO, it expanded its role as a global manufacturing site andintensified its massive export to countries worldwide. But success in China has comeslowly for most foreign firms. China emits more carbon dioxide than any other country. More than one million Chineseare thought to die every year from pollution-related causes. Because of the weakregulatory environment, factories in China are required to follow only minimal pollutioncontrol standards, which further harm the natural environment. The Chinese governmentis beginning to develop clean technologies and new industries based on growingdemand for products and services that support the natural environment. China is hometo numerous challenges and opportunities. For Western firms, success requires a deepunderstanding of the market and long-term commitment.
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