Catching Up and Overtaking Growth of Developing Countries: Dimensions, Factors, Problems and Prospects. Part 2

Due to significant success of several dozen developing countries (DCs), which have embarked on the path of export-oriented industrialization, the DCs on the whole have noticeably overtaken in recent decades the advanced economies (AEs) in terms of the average annual growth rate (AAGR) of per capita GDP (PCGDP), share in world GDP growth, global investment spending and its effectiveness and labor productivity dynamics. According to the Augmented Human Development Index (AHDI), the gap between the AEs and the entire group of DCs has narrowed in 2000–2022 from 3.5 to 2.1 times.However, DCs are highly differentiated and have many problems. The Arab countries (ACs), Sub-Saharan Africa (SSA) and Latin America (LA) were catching up in 2000–2022 to the level of the AEs’ AHDI on the whole twice as slow as China, India and a number of other Asian DCs. The proportion of the poor in SSA and South Asia is on the whole 2.5 times higher than in other DCs. In 2000–2022 the AAGR of total factor productivity (TFP) for ACs, SSA and LA was on the whole three times lower than in Asian DCs. While in the AEs the total outstanding debt to GDP increased in 1980–2022 1.9 times, in DCs it rose 2.3 times to 210%, incl. in China up to 290% of GDP.In the context of growing geo-economic and geopolitical rivalry in a world, in which the fourth technological revolution is unfolding (with the massive use of robots, super-powerful computers, artificial intelligence), DCs, if they want to stand up to these challenges, should substantially intensify efforts aimed at reducing high level of inequality, improving the quality of human capital and upgrading government effectiveness.

Developed and developing countries, convergence, accumulation, productivity, inequality, institutions