“Иқтисодиёт ва инновацион технологиялар” илмий электрон журнали. № 3, май-июнь, 2014 йил
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G.G. Nazarova, c.e.s., prof.,
N.A. Urazboev, student, TSUE
THE ROLE OF EMERGING MARKET ECONOMIES IN THE
DEVELOPMENT TENDENCIES OF WORLD ECONOMY
Муаллифлар
томонидан
жаҳон
иқтисодиётининг
ривожланиш
хусусиятлари, жаҳон ЯИМ, ишлаб чиқариш ва савдо ҳажми, ишсизлик,
инвестициядаги тенденциялари ва унда ривожланаётган мамлакатлар ўрни
очиб берилган, ҳамда улар фаолиятини ривожлантириш бўйича амалий
таклифлар берилган.
Авторами раскрыты особенности развития мировой экономики,
тенденции в мировом ВВП, производстве и торговле, безработице, инвестиции
и роль в нем развивающихся стран, а также разработаны практические
предложения по развитию отрасли.
Keywords:
The world economy, or global economy, generally refers to the economy,
which is based on economies of all of the world's countries' national economies. In
addition, global economy could be seen as the economy of global society and
national economies – as economies of local societies, making the global one.
Formation of world economy has its own reasons and factors, such as increasing of
national economies trade, transition of their products and services across countries
borders affecting to create world markets, migration of working capital, extending of
labor division and specialization, increasing the amount of transnational companies,
globalization and integration relations and others. These factors led to national
economies to be connected with others closely, especially the last ones globalization
and integration have a great importance.
I.A. Karimov, the President of the Republic of Uzbekistan, had already marked
that “The XXI st century, obviously, will be the century of globalization in the
international relations. In these conditions, the process of integration, the expansion
of participation of sovereign states at the international institutes and the organizations
are to be considered not only as historical inevitability, but also as a powerful factor
of stability”. [1]
No wonder, in any sphere it is impossible not to come across to the influence of
globalization. It is known that, currently, the world states, almost all of them, can’t
ensure anymore a stable development and growth based only their own forces. World
governments perceive that the deepening of relations between countries, and also the
more active and effective involving and integrating in the global economic cycle is
the key factor of economic prosperity. Unfortunately, not all states can act alone on
the world arena, especially the small ones. Some countries need support from other
states, more experienced, stronger and with greater financial strength.
In the process of economic globalization, on the arena of international
economic relations appear new actors. One of them is transnational corporations that
“Иқтисодиёт ва инновацион технологиялар” илмий электрон журнали. № 3, май-июнь, 2014 йил
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Figure1. Growth rate in developed countries. Source:
World
economic situation and prospects 2014.United Nations publication.
Figure2. World output. Source: World Outlook. 2014. April. IMF. Summary of World Output
Table A1. P 180.
move their capital from several countries of the world under the influence of different
factors and create an economic chain through which are moving enormous
innovations and financial flows.
In the last statistics of world with the population of more than 7 billion people
GDP of world economy reached 73 trillion dollar in 2013. The first places were held
by countries with developed (advanced) economies such as USA, China, Japan, EU,
it’s countries Germany, France, United Kingdom and others. [2]
By the way, it is
necessary to mention the
amount of our country’s
GDP. In this list of GDP
Uzbekistan hold 73rd place
with the amount of more than
56 billion dollar. But The last
7-8 years for Uzbekistan it is
significant that GDP growth
maintain continuously more
than 8%. The figure1
describes that growth is
slowly improving in high-
income economies with the
3-4% in the last years.[3]
Global activity has broadly strengthened and it is expected to improve further
in 2014–15, with much of the impetus coming from advanced economies. Inflation in
these
economies,
however, has undershot
projections,
reflecting
still-large output gaps and
recent commodity price
declines. It has been
waiting that World output
or World’s producing
process will increase in
the next near years 2014-
2015 as described by the
Figure 2.
In addition, it is typically for the emerging market economies for example,
some countries in Commonwealth of Independent States, Emerging and Developing
Asia, Emerging and Developing Europe, Latin America and the Caribbean to increase
level of output than other countries. They continue to contribute more than two-thirds
of global growth.
Looking ahead, global growth is projected to strengthen from 3 percent in 2013
to 3.6 percent in 2014 and 3.9 percent in 2015. In emerging market and developing
“Иқтисодиёт ва инновацион технологиялар” илмий электрон журнали. № 3, май-июнь, 2014 йил
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Figure3. World Trade Volume (goods and services) Source: TRADE AND DEVELOPMENT
REPORT, 2013 Report by the secretariat of theUnited Nations Conference on Trade and
Development. Page 38-39.
economies, growth is projected to pick up gradually from 4.7 percent in 2013 to
about 5 percent in 2014 and 5¼ percent in 2015. Growth will be helped by stronger
external demand from advanced economies, but tighter financial conditions will
dampen domestic demand growth. Among emerging market economies, growth is
projected to remain robust (strong) in emerging and developing Asia and to recover
somewhat in Latin America and the Caribbean.[4]
Global trade volume growth slowed substantially in the adjustment after the
global financial crisis of 2007 –09 and the euro area crisis of 2011–12. This slowing
has fueled questions about whether international trade will remain an engine of global
growth, which are motivated by concerns about stalling or declining globalization
(for example, because
productivity
gains
from
recent
trade
liberalization
under
the
World
Trade
Organization umbrella
are
diminishing).
However,
data
on
world trade growth
since 2008 seem to be
in line with global
output and investment
growth. These factors
suggest that the recent
trade weakness has
simply
mirrored
stronger-than-
expected declines in growth across the globe. Indeed, world trade growth picked up
strongly with the strengthening in global activity in the second half of 2013.
Inflation is generally projected to remain subdued in 2014–15 with continued
sizable negative output gaps in advanced economies, weaker domestic demand in
several emerging market economies, and falling commodity prices. In the euro area
and the United States, headline inflation is expected to remain below longer-term
inflation expectations, which could lead to adjustments in expectations and risks of
higher debt burdens and real interest rates. In emerging market and developing
economies, inflation is expected to decline from about 6 percent currently to about
5¼ percent by 2015. Softer world commodity prices in U.S. dollar terms should help
reduce price pressures, although in some economies, this reduction will be more than
offset by recent exchange rate depreciation. In addition, activity related price
pressures will ease with the recent growth declines in many emerging market
economies. That said, this relief will be limited in some emerging market economies,
given evidence of domestic demand pressures and capacity constraints in some
sectors.
Declines in the prices of commodities, especially fuels and food, have been a
common force behind recent decreases in headline inflation across the globe.
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Figure4. Figure 1. Global FDI flows, 2004–2012, and projections, 2013–
2015(Billions of dollars) Source: World Investment Report 2013: Global Value
Chains: Investment and Trade for Development UNCTAD p 12.
“World investment report global value chains: investment and trade for
development 2013” expressed by UNCTAD shows that FDI in 2013 remained close
to the 2012 level - 1.35 trillion $, with an upper range of $1.45 trillion. FDI flows to
developing economies proved to be much more resilient than flows to developed
countries, recording their second highest level – even though they declined slightly
(by 4 per cent) to $703 billion in 2012 (see Figure4). They accounted for a record 52
per cent of global FDI
inflows, exceeding flows to
developed economies for
the first time ever, by $142
billion.
The
global
rankings of the largest
recipients of FDI also
reflect changing patterns of
investment flows: 9 of the
20 largest recipients were
developing countries.
Among
regions,
flows
to
developing
Asia and Latin America
remained at historically
high levels, but their growth momentum weakened. Africa saw a year-on-year
increase in FDI inflows in 2012. Developing economies’ outflows reached $426
billion, a record 31 per cent of the world total. Despite the global downturn, TNCs
from developing countries continued their expansion abroad. Asian countries
remained the largest source of FDI, accounting for three quarters of the
developing-country total. FDI outflows from Africa tripled while flows from
developing Asia and from Latin America and the Caribbean remained at the 2011
level. The BRICS countries (Brazil, the Russian Federation, India, China and South
Africa) continued to be the leading sources of FDI among emerging investor
countries. Flows from these five economies rose from $7 billion in 2000 to $145
billion in 2012, accounting for 10 per cent of the world total. Their TNCs are
becoming increasingly active, including in Africa. In the ranks of top investors, China
moved up from the sixth to the third largest investor in 2012, after the United States
and Japan $7 billion in 2000 to $145 billion in 2012, accounting for 10 per cent of the
world total. Their TNCs are becoming increasingly active, including in Africa. In the
ranks of top investors, China moved up from the sixth to the third largest investor in
2012, after the United States and Japan. [5]
Unemployment is maintain in 9% (2012 est.)
note:
30% combined
unemployment and underemployment in many non-industrialized countries;
developed countries typically 4%-12% unemployment (2007) Despite slowing
economic growth, unemployment rates have continued to decline slightly in emerging
Asia and Latin America.
“Иқтисодиёт ва инновацион технологиялар” илмий электрон журнали. № 3, май-июнь, 2014 йил
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Figure 5. Unemployment rate. Source: WORLD ECONOMIC OUTLOOK
April 2014 p 25
Note: BR = Brazil; BRICS = Brazil, Russia, India, China, South Africa; CIS =
Commonwealth of Independent States; CN = China; DA = developing Asia; EDE =
emerging and developing Europe; EMDE = emerging market and developing market
economies; IN = India; LAC = Latin America and the Caribbean; MENA = Middle
East and North Africa; RU = Russia; US = United States; SA = South Africa.
As above seen, today national economies are closely related or connected with
each other in the world economy. Especially, all developing tendencies of world
economy is going on rapidly under the process of world economic globalization.
Globalization is a powerful real aspect of the new world system, and it
represents one of the most influential forces in determining the future course of the
planet. Globalization with its features and development factors (such Trade and
transaction Capital and investment movements Migration, Knowledge) has a huge
impacts on national economies. Globalization of world economy is the continuous
process which is always in integration and influencing with all participants of world
market. So that it demand on national economies to learn and research it and make a
competitive condition for themselves.
By researching and analyzing the worlds recent development and future
predicts it’s acceptable for the emerging market economies to use following
strategies in order to be in the way of developed countries or to reach their degree
and to be suitable competitor in the world market:
Recalibrating macroeconomic policies (the changing external environment
increases the urgency for EME to address macroeconomic imbalances and policy
weaknesses also posses a new challenge. As recent developments show, economies
with domestic weaknesses and vulnerabilities are often more exposed.
In economies where inflationary pressures are still high, further monetary
policy tightening may be necessary. It’s necessary for emerging market and low-
income economies to rebuild fiscal buffers and rein in fiscal deficits (including by
containing public sector contingent liabilities), particularly in the context of elevated
public debt and financing vulnerabilities. Fiscal consolidation plans should be
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country specific and properly calibrated between tax and expenditure measures to
support equitable, sustained growth
Managing Capital Flow Risks in Emerging Market and Developing Economies
(Emerging market economies could enhance their resilience to global financial
shocks through a deepening of their domestic financial markets and the development
of a local investor base.)
Continuing High Growth in Major Emerging Market Economies. Many
emerging market and developing economies should implement other key structural
reforms, designed to boost employment and prospects for diversified and sustained
growth, while also promoting global rebalancing. Reforms should, among other
things, encompass the removal of barriers to entry in product and services markets,
improve the business climate and address key supply-side bottlenecks.
Making depreciation manageable. Leap forward of innovation, modernizing
and technology.
Priority social spending should be safeguarded, and the efficiency of public
spending improved, through better targeting of social expenditures, rationalizing the
public sector wage bill, and enhancing public investment project appraisal, selection,
and audit processes.
The economic policy priority is to achieve a soft landing on the transition to
more inclusive and sustainable, private-consumption-led growth. This shift would
require liberalizing interest rates to allow effective pricing of risk; a more transparent,
interest rate-based monetary policy framework; a more flexible exchange rate regime;
reforms for better governance and quality of growth; and strengthened financial
sector regulation and supervision.
These reforms can be used in the economy of our country. Uzbekistan, being
one of the emerging market economies and developing country is carrying on right
way and realizing comprehensive reforms. To them belong macroeconomic
developing, modernizing of producing and technological renovating, diversifying,
creating a convenient environment for the investment especially for the FDI, making
a good condition for the business, fiscal policy and others.
As a conclusion, these reforms help to the emerging market economies in order
to gain the influences of world economic globalization and become more sustainable
and competitive in the world market by efficiently using its capacity of reserves.
References
1.
I.A. Karimov “O’zbekiston XXI asr bo’sag’asida: xavfsizlikka tahdid,
barqarorlik shartlari va taraqqiyot kafolatlari”. Uzbekistan, 1997. 137-bet
2.
"Gross domestic product, current prices". International Monetary Fund.
International Monetary Fund. 2014. Retrieved June 7, 2014.
3.
World economic situation and prospects 2014. The report of UN/DESA,
UNCTAD.
United
Nations
publication.
P.7
available
from
http://www.un.org/en/development/desa/policy/wesp/wesp_current/wesp2014.pdf.
4.
World output. Source: World Outlook. 2014. April. IMF. Summary of
World Output Table A1. p.180.
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5.
World Investment Report 2013: Global Value Chains: Investment and
Trade for Development UNCTAD p.12-20.
