Modern states are usually divided into developed and developing. The former are traditionally regarded as leaders of the world economy, the latter as those that may someday claim their respective status. But what are the criteria for distinguishing between developed and developing countries? How is it possible to reduce the lag of some countries from others?
Principles of Economic Classification of Countries
So, modern economists distinguish developed countries and developing countries. Based on what criteria is this classification acceptable? A similar scheme was put into circulation by the UN Economic and Social Council. The main criterion proposed by the experts of this organization is the degree to which the national economy of a given state complies with market criteria and financial indicators: per capita GDP, technological level of industries, quality of social institutions, etc. There is an IMF methodology, according to which the classification in question countries ("developed and developing") is not used; instead, it is practiced to classify states as advanced and those that do not fall into this category.
There are areas whose characteristics do not allow giving leadership to any states. For example, many demographic problems of developed and developing countries coincide. The situation is similar with climate resources and ecology - the situation in these areas is not always better in developed countries than in developing ones.
The developed countries
Now developed countries include Western Europe, the USA, Canada, Israel, Asian countries - Japan, South Korea, Taiwan, Singapore, Australia and New Zealand. These states have a GDP per capita of at least $ 30 thousand, a stable economy, and a high level of development of social institutions. Leading in economic and political terms, it is customary to call the countries of the "Big Seven" - the United States, Britain, Germany, France, Italy, Canada and Japan. The G7 states account for about 50% of global GDP.
Specificity of developed economies
Developed countries and developing countries differ primarily in macroeconomic indicators. How do states of the first type manage to be leaders? According to one of the common versions, the GDP indicators in developed countries are higher than in developing ones, for two main reasons: the availability of capital (which can be invested in various industries and thereby contribute to economic growth), as well as market openness (due to which this or that the business segment has the necessary consumer demand).
The actual structure of the economies of developed countries, as some researchers note, may not necessarily imply diversification. So, for example, in the structure of GDP in Norway there is a strong dependence on oil exports. However, an excessive emphasis in the development of the economy on the corresponding sector in Norway is not a problem due to the constancy of sales markets, as well as due to the country's very large reserves.
The role of multinationals
A significant difference between developed countries and developing countries is that in the states of the first type transnational corporations play a leading role. Actually, in many respects it is their activity that determines the openness of foreign markets to countries of the corresponding category. Developing states do not always possess this resource. Another difference between developed countries and developing countries is the importance of the role of small and medium enterprises. Small companies are, firstly, a reduction in the social burden on the state (citizens are self-employed by starting a business, as well as hiring others), and secondly, it is an additional resource for collecting taxes.
The Importance of Social Institutions
Developed countries and developing countries also differ at the level of social institutions - law, government, education. In the states of the first type, as a rule, a sufficiently effective legislative system has been introduced that optimally combines the necessary bureaucratic mechanisms and the freedom of businesses from unnecessary formalities. In the public administration system, much attention is paid to the implementation of democratic institutions - and the emphasis is on the development of relevant initiatives at the local, local level, and not at the national level. The most important condition for maintaining the developed status by the state is a competitive education system. Its presence determines the formation of the best personnel who will be able to take a direct part in modernizing the economy and maintaining its highly developed status.
The role of the state in developed economies
We noted above that developed countries and developing countries differ in that in the former there is a large percentage of private businesses. At the same time, in most countries of the corresponding type, government institutions that exercise the necessary economic regulation play an extremely significant role. The main goal of such activities of the authorities is to create optimal conditions for commodity-money communications of businesses both within the state and with its trading partners. The government can regulate the economy through its own participation in economic processes through state-owned enterprises or implement certain legislative initiatives.
Liberalization of developed economies
The most important feature of the economic system of a developed state is openness to foreign markets. This shows a liberal approach to organizing the economic system in most countries of the corresponding type. However, the country should be prepared for active communications in foreign markets, especially in the aspect of the competitiveness of goods manufactured by national enterprises.
The impact of globalization on developed and developing countries in this sense may be dissimilar. The states of the first type, as a rule, are adapted to the competitive conditions of the global market, and therefore they can feel quite comfortable in conditions when the economy must constantly improve in order to offer the best products and services. Developing countries, due to a possible shortage of capital and, as a result, the level of manufacturability, are not always able to withstand competition in foreign markets.
Developing countries
Specialists identify about 100 states that can be attributed to the corresponding category. There are a large number of criteria by which a country can be defined as developing. Note that this term may suggest additional grounds for classification. For example, among the developing countries are countries with economies in transition - those in which for a long time the economic system has developed according to the principles of socialism. Such states include Russia. It is difficult to classify according to the noted criterion China. The fact is that in the PRC - a communist state - elements of both a market economy and a command-administrative economy coexist.
One of the criteria for classifying a country as developing can be attributed to the same level of GDP per capita. However, not all economists consider it correct. The fact is that in some Middle Eastern countries - for example, in Qatar, Saudi Arabia, Bahrain - GDP per capita is even greater than in the most developed European countries. However, these countries are nevertheless classified as developing. Therefore, many experts prefer different criteria to distinguish between economically developed and developing countries.
Among the common reasons is the level of development of social institutions. This factor, economists believe, can predetermine the stability, in turn, of the state’s economic system. That is, for example, with inefficient political governance of the country and low quality of legislative regulation, the high GDP of the state may well decrease due to the influence of various factors (which could be counteracted if strong social institutions were built).
Some economists believe that the economic system of the state should not be diversified, but nevertheless - it is highly desirable - based on at least a few leading sectors. For example, the oil sector still plays a crucial role in the economies of some Middle Eastern countries, which gives reason for researchers not to classify them as developed.
Criteria for classifying Russia as a developing country
Based on what criteria does the Russian Federation belong to developing countries? In this case, we can talk about the lack of compliance of our country with developed GDP per capita. Now it is about 24 thousand dollars - at purchasing power parity. At least 30 thousand are needed to meet the status of a developed country according to this criterion.
As for social institutions, approaches to assessing their Russian version vary widely. There are researchers who believe that the state and legal systems of the Russian Federation need speedy modernization. Other experts believe that the Russian scheme of legislative regulation of the economy is optimal for the state - taking into account its historical and cultural features. That is, simply copying samples of the legal systems of developed countries can be ineffective.
From the point of view of the role in the economy of small and medium enterprises, the indicators of the Russian Federation are also objectively less outstanding than those that characterize many developed and developing countries of the world. Perhaps this is due to the long period under the USSR, when private business was banned. Over the years of building a free market in the Russian Federation, a large class of entrepreneurs has not yet formed.
Regarding the access of the Russian Federation to world markets, recent political events indicate that such may be artificially limited by Western states. As a result, Russia faces the challenge of creating new markets for itself. Most likely, this is what our state is doing, concluding more and more contracts with the BRICS states, developing cooperation with Belarus, Kazakhstan, Armenia and Kyrgyzstan within the framework of the EAEU.
Russia has a number of unique technologies - this can be especially observed on the example of the military sphere. Many of the corresponding solutions have very few analogues in the West - for example, this applies to 5th generation aircraft. By this criterion, the Russian Federation is, of course, difficult to classify as a developing state. In Russia, many other samples of high-tech products are manufactured - for example, Elbrus processors, which in some parameters are not inferior to chips from Intel and AMD.
As for the level of economic diversification, as we noted above, even in many developed countries this criterion is not met. Therefore, the well-known dependence of the Russian Federation on oil exports is probably not the main factor that our country is not yet developed.
However, as many economists note, further growth of the national economy of the Russian Federation at the expense of the relevant sector will no longer be possible - firstly, because oil prices are unpredictable, and secondly, it will be difficult to significantly increase Russia's oil production. Thus, it is necessary to develop additional sectors of the economy.
