Rise of the Rest - Research Paper Example

Rise of the Rest This paper relates the phenomenon of how a couple of nations – termed as ‘the rest’ and including China, India, Brazil, Russia, Africa, Germany – rose to join the category of world-class competitors in several mid-technology industries. These were the developing countries that were growing at a very fast rate and attempting to reshape the world economy. Initially this group contained Brazil, Russia, India, and China and was termed as BRIC. Later on, however, other nations joined in. The beginning of the twenty first century witnessed a lot of economists claiming that the western world is going down and being replaced by BRIC, the rest, and some other Asian countries. However, this point of the start of the decline of United States is questioned by Michael Cox who says that although BRIC and the rest are rising and developing there is no such power shifting taking place.[Cox12]. Although economies of this group of nations, especially of China, India and Brazil, are large and will definitely expand with time, it does not mean that they will outdo most of the western nations or United States. National incomes of this group of countries increased phenomenally and within decades it was seen that the per capita income had doubled. Last years of this century saw ‘the rest’ over expanding and falling under debt due to the hubris from economic success. However, it was still apparent that it would continue to take the place of North Atlantic’s bread-and-butter manufacturing, the same way that North Atlantic’s multinational organizations kept on jostling to gain entry into its financial markets. Thus, their participation rate of world manufacturing output rose from under a twentieth in 1965 to almost one-fifth by 1995. A noticeable divide regarding manufacturing experience among the backward nations was already there when World War II ended; the rest had been able to achieve enough manufacturing experience but the remained had failed in this aspect as they had not really had enough exposure to factory life before the war and did not reach the rest’s industrial diversification. The rest had obtained this experience in producing silk, cotton textiles, foodstuffs and light consumer goods that helped them to move toward mid-technology, and later on to high-technology sectors. Although this divide was not exactly a very apparent line but the nations not having a strong manufacturing experience fell back and, depending on this experience, the countries were either termed as those too weak to be categorized with the modern world industry or the ones which were redefining its terms. The rise of the rest is termed as a remarkable change that occurred during the latter part of the 20th century. History had witnessed, for the very first time, that backward nations were industrializing without proprietary innovations. They were able to enter and keep up with the industries where technological capabilities were required in huge amounts while originally not really having any such advanced abilities. Thus, late industrialization was termed as pure learning, which meant that in the beginning the backward countries completely depended on other nations’ commercialized technology to enter the industrial sector and set up industries[Placeholder2]. Knowledge-Based Assets When assets based on primary products and being exploited by unskilled labor turn to assets based on knowledge being exploited by skilled labor it is known as economic development. The manufacturing sector most nurtures and uses knowledge based assets. The extent to which such assets are available is what determines how easy and quick it is to change primary product production to industrial production, and eventually modern services. A New Control Mechanism Since ‘the rest’ did not have sufficient skills they rose developing a nonconventional and original economic model. This model was termed original as it was under direction from innovative control mechanism. A control mechanism is basically a list of instructions which discipline economic behavior. The mechanism of ‘the rest’ was set on the idea of reciprocity. Allocation of subsidies was carried out so that manufacturing could yield profits; this helped the resources to flow from primary product assets to knowledge based assets. Whoever received these subsidies had to work under monitorable performance standards which could be reallocated equally and gave actual results. Through this control mechanism ‘the rest’ were able to transform the ineffectiveness and corruption that was a part of the government to collective good, the same way that the ‘invisible hand’ from the North Atlantic’s market-driven control mechanism had converted confusion and greediness of market forces to common good. Also, through this reciprocal control mechanism ‘the rest’ was able to bring market, as well as government, failure under control. Globalization and national ownership All the countries that make up ‘the rest’ built mid-technology industries but some of them, for instance China and India, took further measures to become knowledge-based economies. They invested a lot in their own proprietary national skills that allowed them in sustaining national ownership of business enterprises in Although the rest are developing and expanding their economies these countries are still lacking in an open system of higher education. Students from all over the world prefer Western and American universities as they feel that they would have more value if they studied there and would earn more. The rest are facing a lot of problems in raising this education standard. For instance, Brazil and India do not have any universities which can be categorized in the top 100, Russia has just one and China has five, of which three are in Hong Kong[Cox12]. On the other hand, in 2011 the United States had 8 out of the top 10 universities of the world. That means that the West is setting the standards in higher education. The BRIC projects are assumed with respect to there being unlimited resources that can be made available and used as and when required. This is, obviously, not the case.in fact, it is very much probable that several of the extremely necessary resources that are currently being used to maintain the economic growth may fall out as they are not being replenished as the same rate at which they are being used. When this happens economic growth would definitely slow down and the projections and predictions would fall back. As the rest emerge economically, the global environment would be affected in a way that we cannot imagine. Undeniably, those who feel that the Earth has only limited resources can also put forward the argument that in the technological world of today the rest will, sooner or later, stop developing and will not be able to exceed the supplying capability of the international economy[Sap10]. According to experts China is the most developed country out of all these[CRa09]. It has been noted: “Without China, the BRICs are just the BRI, a bland, soft cheese that is primarily known for the whine [sic] that goes with it. China is the muscle of the group and the Chinese know it. They have effective veto power over any BRIC initiatives because without them, who cares really? They are the one with the big reserves. They are the biggest potential market. They are the U.S. partner in the G2 (imagine the coverage a G2 meeting gets vs. a G8 meeting) and the E2 (no climate deal without them) and so on.” [Placeholder1] The statistics of the BRICs combined together give a very good impression. However, if one actually unwraps these stats and views them individually of each country it would be found that Russia is a declining power and would most probably go down, while India and Brazil, though developing and going up, will take some time to develop. China, on the other hand, enjoys a very good position, both economically as well as financially. China has more than double the reserves, and exports, that the other nations in this group combined. Therefore, if this group of countries end up taking over the world it would all be due to China. Another problem that lies between the growth of ‘the rest’ is the population issue of these countries. In the 1990s the population of Russia was going down at a rapid rate and it has not been a very long time since the Russian government has attempted and predicted a growth by 2020. Brazil’s and China’s populations are no better – they will, too, start declining soon. All this can only mean one – a decreased labor force and, therefore, more retirees than workers, which, in turn, means that the development cannot continue, at least not at the same pace. It will probably reach a point and then either stop there or even start going down. India is, also, trying for population growth in order that graying can be averted but till today the government has not really been able to provide the education and infrastructure that would allow its young workforce to be able to compete and be productive in the field[Wil09]. China has a one-child policy which is a sure shot at a rapid decline in the ratio of working to nonworking people. However, the country believes that progress with respect to education, infrastructure, urbanization and globalization, and decrease in environmental stress would together balance out the graying effects. Yet another issue standing in the way of India’s development is her conflict with her neighbor, Pakistan. 1998 saw a nuclear standoff between these two countries. The main issue between the two is dispute over Kashmir which aggravates economic relations as well. This government finances are limited, there is increased social unrest, and prospective domestic economic demand is limited. All this leads to impediment of progress. Besides, these factors and others such as political policies cannot be predicted or controlled, thus having possible negative effects on the country. Read More