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News Release - - July 20, 1994

Factors Blocking the Economic Development of the World

Keywords : Economic development, Global economy review and forecast, Review of International Economic order Economic inequalities, The factors contributing under-development, rich-poor disparity, Survey on world scale, Emerging markets, Foreign-trade, investments, exports, imports, joint-ventures, economic forecast, Religion in politics and business, Racism, Mismanagement, Authoritarian and undemocratic rule, infrastructure, environmental mismanagement, Global economy, trade policy, trade, industry. 
Religious and ideological fundamentalism --kills development and 
past human  achievements- -, Racism, Lawlessness and
 mismanagement are three major reasons hindering 
the economic development worlwide --- Center for Global Trade 
Development -- conducted a  global survey covering 
over 100 countries and over 1000 executives - reveals some interesting 
thoughts.

See inside an advance of the first part of the report published by CGTD - an independent information and research group -based in USA - monitoring 240 countries worldwide and over 200 industries trends.

MAJOR FACTORS BLOCKING THE ECONOMIC DEVELOPMENT OF THE WORLD Center for Global Trade Development monitors 220 countries of the world and over 200 industries trends.

CGTD conducted a survey among 1104 executives from various industries and administrative sectors from 105 countries asking them what were the major factors which hindered the economic development in their area and the development in the world in general.

The global survey was based on the declaration of the establishment of a new International economic order by the plenary session of the United Nations in May 1974.

The members of the world body had proclaimed their united determination to work urgently for the establishment of a new International economic order based on equity,

sovereign equality, interdependence, common interest and co-operation among all states, irrespective of their economic and social systems which shall correct inequalities and redress existing injustices, making it possible to eliminate the widening gap between the developed and the developing countries and peace and justice for present and future generations and, to that end, declared a 7 point new economic order which stressed the fundamentals of international economic relations economic as well as political and other relations among states shall be governed,

inter alia, by the following principles:

A > SOVEREIGNTY, TERRITORIAL INTEGRITY AND POLITICAL INDEPENDENCE OF STATES;

B> SOVEREIGN EQUALITY OF ALL STATES

C> NON-AGGRESSION

D> NON-INTERVENTION

E>MUTUAL AND EQUITABLE BENEFIT;

F> PEACEFUL COEXISTENCE;

G> EQUAL RIGHTS AND SELF-DETERMINATION OF PEOPLES;

H> PEACEFUL SETTLEMENT OF DISPUTES;

I> REMEDYING OF INJUSTICES WHICH HAVE BEEN BROUGHT ABOUT BY FORCE AND WHICH DEPRIVE A NATION OF THE NATURAL MEANS NECESSARY FOR ITS NORMAL DEVELOPMENT;

J> FULFILLMENT IN GOOD FAITH OF INTERNATIONAL OBLIGATIONS;

K> RESPECT FOR HUMAN RIGHTS AND FUNDAMENTAL FREEDOM;

L> NO ATTEMPT TO SEEK HEGEMONY AND SPHERES OF INFLUENCE;

M> PROMOTION OF INTERNATIONAL SOCIAL JUSTICE;

N> INTERNATIONAL CO-OPERATION FOR DEVELOPMENT;

O> FREE ACCESS TO AND FROM THE SEA BY LAND-LOCKED COUNTRIES WITHIN THE FRAMEWORK OF THE ABOVE PRINCIPLES.

After 20 years of the adoption of the charter of economic rights and duties of States and the declaration on the establishment of a New International Economic Order what has been achieved and if the declaration which was one of the principal guarantees for the creation of better conditions of all peoples to reach a life worthy of human dignity has in effect been able to establish a real International Economic Order.

The CGTD's survey analyses the achievements of world human development in brief, data and forecast for global economy ;and discusses in details the major obstacles which block the economic development of the world community.

Communism

The greatest change of last 5 years has been the transformation of centrally planned economies into gradual marketization of the economies. These economies were ruled by the communist party members and the world has seen that those economies didn't achieve for their people what they had promised. The failure of these systems has brought about very structural changes in the world economy and their influence will be noted in the coming 10 years.

China continues to be number one in communist party membership with around 40 million members but its ruling members have shown enormous and timely talent in liberalising the once stuck economy. The great economic revolution going on in China- will make it the largest economy of the world in short time. But that will happen more due to the sheer numbers of working population in the Chinese Economy. Economic progress is changing gradually, the overall outlook of its members and their vision about life's other realities. This new vision will reflect in the coming years.

Out of extinct Soviet Union's 18 million communist party members only less than 5 percent now are affiliated directly with the party. Most East European nations have had a big change in political thought process. Yugoslavia is being transformed painfully into several Independent States. Cuba's socialist system has failed and its fall is imminent. But there is no guarantee that Cuba will have any democracy even upon the disappearance of the present system as there is bound to be more misery and upheavel in the lines of Russia.

The only important Communist party influenced economies are North Korea with around 2 million members, Vietnam with around 1. 5 million members and Cuba with around 400. 000 members.

Strangely Italy [1, 800, 000] now has more members of Communist party than Vietnam and France [around 600, 000] and Japan [440, 000] has more members than Cuba.

The theories of Marx, Lenin and Mao are no more valid in today's context and the countries who follow the centrally planned economic systems are on the verge of

transforming or evolving themselves into a totally new system which will be based on market driven economies and more rights to individuals.

Democratization

There are more and more countries going for democratization as they have experienced that democracy does transform the economic development scene too. Democracy in more countries have given birth to new stabilized and new emerging markets which in turn is boosting the economic growth in general.

The repressive and discriminating regimes have been out of power in Latin America and in Africa, mainly South Africa. Nigeria on the contrary has seen the crushing of the democracy and peoples' choice. East Europe and ex-soviet block nations are experimenting with democracy gradually.

But in any case, the participation in the democratic electoral process remains very low and, tragically, still there are lot of single party democratic nations, which don't yet perceive a multi-party electoral process. And there are still those ones where election results are known months in advance.

Achievements

The most significant achievement during the last 5 decades has been the independence from colonial and alien domination of a large number of peoples and nations. Technological progress, especially in robotics and automation, computers, telecommunications, medicines and medical advancements, manufacturing processes have been made in almost all spheres of economic activities , providing a potential for improving the well-being of all peoples.

These advancements, however, have taken place mainly in around 10 to 15 countries [mainly OECD nations] and the technology and development gap between the industrial nations and the less developed nations continues to widen.

The extremely quicker development of new manufacturing technologies is taking the world into a post-industrial society however it is also creating great environmental and social problems. Environment itself has become a fairly large industry with potential.

The marginal societies are being integrated, gradually at very slow pace, into a newer global economy, where more and more consumers are being added each day.

These consumers are usually smarter sections of the society who look for a better life style and most of these sections are responsible for a more democratic form of goverment on all levels as they see retard the progress by their business and political leaders

The countries specially with planned economies, the tiger economies and some large developing nations are finding enormous environmental problems and they may have to dedicate some of their resources to get rid of them. The benefits of technological progress are not shared equally by all members of the International community but more democratic and educated consumers in new emerging markets are demanding to integrate these technological advancements in their socieities.

Global economy - present and potential

The total gross global product [GGP] in purchasing power terms was $26 trillion dollars in 1992.

Out of the GGP global exports were around 3. 70 trillion dollars on FOB terms, and around 76% of those exports [2. 81 trillion dollars] were from developed countries. Imports were around 4. 10 trillion $ dollars [CIF value 1992] which include the smuggled and duty unpaid merchandise ; about 71% of those imports [2. 91 trillion dollars] were by the developed countries. In 1992, 46 % of Gross global product [GGP] was accounted by the USA and EEC [ European Economic Community] Japan accounted for around 9% of the GGP.

The Gross Global Product statistics will change very considerably in coming 5 to 10 years and Asian Nations notably China, India and Indonesia will account for a fairly larger percentage. In Middle-East Saudi Arabia and U. AE. will post huge growth in their economies , In Africa, South-Africa, Botswana, Lesotho, Namibia, Tunisia & Senegal will have notable growth and in Americas Mexico will account for a much larger share. If marketization and democratization process continues ;Russia and East Europe will also account for a larger percentage in the GGP.

The Defense expenditures worldwide will be declining gradually.

Although Defense is 4 % of total global output which is over 1 $ trillion dollars but there will be 10 to 15 % of decline in the expenditures in the coming years.

The Emerging Markets

The present international economic order has changed considerably in last 20 years. The developing countries and ex-communist States are changing their economic patterns and there are new processes of marketization, industrialization and more open trade policies in India . , China, Mexico and several other Asian and East European Nations. The new emerging markets have started reshaping the face of the world economy and their constant development and new flows of investments will widen the scope of economic development in other areas too. The emerging developing world has become a very powerful factor that makes its influence in all fields of international activity. These changes in the world will demand more participation of the developing countries in the economic development process and their people are expected to be benefiting from their growth.

These changes have thrust into prominence the reality of interdependence of all the members of the global community. The interests of the developed world and developing nations are no more isolated from each other and there is a closer interrelationship between the stable prosperity of the developed world and the growth of emerging and developing economies.

THE 11 MAJOR FACTORS BLOCKING THE GLOBAL ECONOMIC DEVELOPMENT

The present state of the world, genocides in Rwanda, Burundi, Bosnia-Herzegovina, Kurds living in Turkey, Iran, Iraq, Azerbaizan & Syria, Conflicts in Haiti, Nigeria, Algeria, Azerbaizan, Armenia, Yemen - all reflect the factors considered in the survey.

The global survey conducted by CGTD shows some significant changes in the patterns of thought and understanding of the world economy by a larger number of decision making people and it also shows that they are unanimous in many of the global concerns.

Despite their diversified ethnic and cultural backgrounds, religious beliefs, political ambitions, languages, and different natures, most of the respondents have many common points reflected in their replies.

The persons participating in this survey include from Ministers and top bureaucrats of governments to principal decision makers for large trans national companies to very small entrepreneurs with less than 10 employees.

Most persons participating do take part in the decision making process of their countries.

63% of the respondents belong to developing and emerging economies and the participation is in equal proportion to their total purchasing power in local currency and demographics.

The most important basis of the survey was why still there were inequalities in the world

and why some countries, economically, continue to be where they always have been historically. The 2nd most important basis was the reasons of imbalances of flow of world trade and development.

Most people asserted firmly that a more liberal and open economic climate and better living conditions will STOP dozens of ugly conflicts among communities, countries and ethnic groups. Most surveyed also blamed their own leaders for the human poverty and said a large number of ruling members lack vision and proper training to manage any economic development at all.

The participants not only reviewed the local circumstances but also viewed the issues in a global perspective. The participants were not under any pressure and their profile was the criteria not their names. They expressed their thoughts freely and in their own languages.

The Total research time has taken around 8 months and the participants did consider the most contemporary issues.

65% of the respondents have had university education and around 40 % of them belong to minorities, lower castes, poverty zones, under privileged areas and economically backward areas. 92 % of the respondents were Christians, Jews, Muslims, Budhists, Hindus and Taoists.

One of the most important concern shown by a majority of the people was the future of their children and desire for a better life for their families not only economically but also

socially. Almost 70 % of the respondents as global citizens responded that the distribution of people, at present, is disproportionate to the present demographics and 45% favored emigration as answer. Around 60% thought that if equal opportunity was given in their home countries fewer would like to emigrate to foreign lands.

Almost 90% chose USA, Switzerland and Singapore as model nations and well managed countries.

1. Religion intolerance, Fundamentalism, Ignorance and Ideologies

2. Xenophobia - Racism, intolerance, hate, skin based discrimination, cultural misunderstanding

3. Lawlessness mis-managed, law less or no law Rule

4. Caste Class and Caste structures, rich and poor disparity

5. Authoritarian Undemocratic rule, Oligarchies, military rulers, Ideology based rulers

6. Unprofessional Management on many levels

7. Natural disasters environmental mismanagement

8. Poor or inadequate basic infra-structures

9. Information little or no information,

10. Language barriers and distance, cultural differences

11. Landlocked 42 countries without any access to sea, bounderies landlocked

The most important and prime factor responded by a large majority was Religion and ideological fundamentalism. Religions' incursion into politics and business and other ideological fundamentalism was the prime concern of most participants.

Most respondents said that intolerant religious or ideological fundamentalism could kill the past achievements and it was a major deterrent for investments or growth. Almost 75% said that it blocked the economic and human progress on all levels. A great majority thought that religion must be a very private affair and it should not influence political process, economic development and media.

A great number of respondents worldwide said that Islamic fundamentalists and zealots specially in Algeria, Bangladesh, Iran & Pakistan were abusing their faith by using the name of Islam for their own petty interests and powerful Islamic nations must have a code of conduct so that not every person could issue statements and fatwas in the name of a pure religion like Islam and show to the world that the great majority of Islamic faithfuls were not fundamentalists and they respected rest of the world.

Most of these respondents showed surprise at the silence of Rich Islamic nations leaders on these issues.

The prime examples given were :

Fundamentalist Christians against all minorities and or religious beliefs in US, Yugoslavia Europe, and Latin America.

Fundamentalist Jews against other minorities and or religious beliefs in US, Israel, Palestine, Lebanon etc.

Fundamentalist Muslims against all religions and minorities in Pakistan, Bangladesh, Egypt, Algeria, Iran, Iraq, Turkey, Most Gulf countries, Libya, Sudan, Jordan etc.

Fundamentalist Russians against all foreigners and Asian republic nationals Fundamentalist Buddhists against minorities - Sri Lankan Buddhist majority against Hindu and Muslim minorities, Japan and Korea

Fundamentalist Hindus against lower caste Hindus and other religious minorities in India

Fundamentalist Juche ideology of Kim Il Sung of North Korea against the rest of the world and their own people

Fundamentalist ideologies of various lesser known communities against their minority constituents and or people of different beliefs.

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Xenophobia, racism, discrimination based on skin color, racial hate was the 2nd most important reason, most respondents asserted, cause blocking the economic development.

Intolerance to foreign accents, foreign looking people, skin color based discrimination was the most common point and was prevalent in almost all countries and communities of the world. The United States was the only country cited by a grand majority where the laws were in vigor against all types of racial hate, discrimination and xenophobia.

Surprisingly China, Japan, Russia, Bulgaria, Italy, were given as prime examples of discrimination and intolerance against people of minorities and other races.

In Europe Spain, in Asia India and in Americas, Brazil and Mexico were cited as the most friendly country towards tolerance and respect for foreign people and races. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lawlessness or no laws or insufficient laws to protect personal property and mismanagement, corruption on governmental level was the 3 most important reason hindering economic development.

Nigeria, Somalia, Sudan, Libya, Sierra Leone, Liberia, Togo, Angola, Guinea Equatorial, Zaire, Yemen, Afghanistan, Bangladesh, Tajikistan, Myanmar [Burma], Laos, Cambodia, Syria, China, North Korea, Iraq, Fiji, Peru, Paraguay, Colombia, Venezuela, Haiti, San Salvador, Guatemala, Argentina, Russia, Yugoslavia [Serbia] Bulgaria, Rumania, Azerbaizan and Georgia were given as prime examples by almost 95% of the participants.

The open or hidden corruption, bribes, no respect for individual rights, Laws to protect personal property and contract laws were either not existing or if existing nominal and not practiced. The US, the UK, Major European nations, Singapore, Hongkong, Eritrea, Gabon and Canada were given as major countries who didn't practice corruption on administrative levels.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . The 4th most important reason of no growth was Caste and class structures which didn't give equal rights in practice to their fellow citizens. Most Spanish speaking America [ except Cuba ], Mexico, India , Arab nations, and most African and some major European countries were in this category where castes and sub- castes, or class system was widely existing for centuries. In spite of laws governing against caste and class based apartheid existed, but there was widespread discrimination on the ground of caste and class.

India, Pakistan and Mexico were cited as prime examples of widespread discrimination to lower caste communities who were denied equal rights. This was given as one of the most important social problems of modern nations and most respondents said a large percentage of world population is discouraged systematically on the basis of their birth which created a large number of social and economic problems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authoritarian, undemocratic rule was accounted as 5th most important reason for under- development or in some countries absolutely no development at all.

Nepal, Myanmar, Laos, Vietnam, China, Iraq, Iran, Yemen [both] , Syria, North Korea, Almost all African continent, Paraguay, Cuba, Haiti, Guatemala, San Salvador, Panama, Honduras, Serbia and Romania etc. were prime examples.

This also included military and unpopular governments, Dictatorship in different garbs, and lack of an electoral process, manipulation of people's will by force etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6th important reason was unprofessional management of local governments, administrations, state departments, state owned corporations, companies.

There were many countries of all kinds of development levels but prime examples were cites as Spain, Greece, Serbia, Bosnia-Herzegovina, India, China, Saudi Arabia, Morocco, Russia, Ukraine, Belarus, Romania, Georgia, Argentina, Bolivia, Ecuador, Mexico, Brazil, Venezuela , South Korea, Indonesia and a large number of nations of Africa.

This category also included family owned monopolistic groups, Oligarchies, Large corporations like Korean Chaebols, Nepotism, Favoritism, Hierarchial control and manipulation, Party based monopolies etc.

Local administration's mismanagement and lack of entrepreneur culture was another prime reason of underdevelopment.

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Natural disasters like earthquakes, land slides, Volcanic eruptions, severe weather like cyclones, Torrential rains, floods, extreme temperatures, deforestation, desertification, loss of wildlife and natural resources, soil erosion and degradation etc. was the 7th reason of not development.

Many respondents said that some countries simply didn't manage these natural disasters properly and it caused enormous loss of human and economic life and a severe deterrent to progress of any type.

Industrial pollution, environmental and industrial disasters like water, air, toxic and hazardous substances, acid rain, loss of vegetation and misuse of agricultural abuse were also included in this category.

Bangladesh, Ethiopia, Sudan, Somalia, Guinea Conakry, Guinea Bissau, Mali, Armenia, Philippines, India, Mexico, USA were affected regularly but some respondents were of the view that proper and timely planning could avoid some of the losses.

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Poor or no infra-structure was another prime reason for under development. Improper Energy resources exploitation, Transport and roads, Communications, Construction, Hygienic & sanitary facilities and other infra structural shortages affected most developing countries. There were many areas still without basic electricity, transport and basic telephone services. Many small companies could never see any growth due to lack of these basic amenities.

Most businesses in India, Vietnam, Pakistan, Bangladesh, Most Africa, Dominican Republic, Mexico, Various areas of Latin America , could do much more economic activity if they had access to these basic facilities. Most ex USSR areas were still without a proper and affordable telephone system.

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

9th important reason was given by virtually all surveyed was lack of information. Most people did not have enough information on the economic opportunities in their own areas except OECD nations. Most surveyed complain that information is usually not accurate, biased, un-affordable or very hard to get by.

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Another of the important reasons for lack of economic development was considered language barriers, distance, cultural differences etc. This factor was related to countries like India where a northern business does have little access to a southern market or vice versa.

For foreign investment and international trade exchange hindrance , this factor was responsible for almost 40% of the respondents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Landlocked ness also becomes an obstacle in the path of economic development as there are 42 countries and geo-economic areas who lack any access to sea and they are completely landlocked.

Afghanistan, Andorra, Armenia, Austria, Azerbaizan, Belarus, Bhutan, Bolivia, Botswana,

Burkina Faso, Burundi, Central African Rep. , Chad, Czech Republic, Ethiopia, Hungry, Kazakhstan, Kyrgyzstan, Laos, Lesotho, Liechtenstein, Luxembourgh, Macedonia, Malawi, Mali, Moldova, Mongolia, Nepal, Niger, Paraguay, Rwanda, San Marino, Slovakia, Swaziland, Switzerland, Tajikistan, Turkmenistan, Uganda, Uzbekistan, West Bank of Palestine, Vatican, Zambia and Zimbabwe have to rely on land or air routes to move their merchandise with other nations.

Most respondents said that through friendly accords and mutual cooperation, these countries can develop access routes to sea and that also helps the countries offering such routes.

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