Economic recipe for developing countries!

The industrial and business environment of developing countries is undergoing a sea of ​​change due to economic reforms and policies in the light of globalization, privatization and liberalization. In order for these countries to establish themselves in the global market, a long-term economic vision is required that facilitates the process of becoming self-sufficient over time. Let me give you an overview of how this change can happen and how countries are adapting to the global economic boom.

  • More and more multinational companies have acquired and are trying to acquire much of the equity in the host country’s industries, and sometimes they opt for joint ventures to take advantage of economies of scale, which also proves to be a win-win situation for both the parties . Developing countries have changed their economic views on FDI and are very liberal in their stance on providing the necessary licenses. The entry of multinational companies and their potential investments has even transformed core sectors such as energy, oil and telecoms. In addition, the advantage of cheap labor and economic subsidies for starting operations in economically backward regions attract foreign investors.
  • In the developing world there is a rush for entrepreneurship in the form of the creation of small industries, cottage industries, which are generously subsidized by governments to encourage entrepreneurship. People also want to seek diversification, mergers and acquisitions in the wake of global competition.
  • The capital markets have received new impetus. The rapid growth of the stock market and its impact on the international economic scenario has prompted foreign brokers to closely monitor market changes for potential investments. The only striking feature of the developing world economy is that it is a self-made economy and is able to withstand the pressures of the business cycle such as recession and inflation, unlike foreign markets which have failed to stabilize their markets due to what is known as sub-prime lending, a scheme , which has not achieved the desired economic growth. Instead of reviving the capital market with fresh cash injections, he has bankrupted many banks and financial institutions.
  • The banking sector has grown to greater heights and is in a competitive environment. The deregulation of interest rates to attract potential investors, new technologies, products and aggressive marketing are leading to new competition, the disinvestment of state capital in nationalized banks has led to banks operating as commercial institutions and their services being marketed as branded consumer products.
  • Financial services have become a new business and opportunities for financing are increasing the chances of raising capital in abundance. This has become a separate and important source of revenue for the service providers.
  • The private sector is gaining importance in countries like India where it has entered all core industries like oil, mining, telecom, road construction, railways, ports, civil aviation, etc. This serves as a revenue stream for the government and this type of economic restructuring has created a wave of excitement among potential investors.
  • Imports have become a corporate activity and are outside the domain of the state, facilitated by the easing of licensing issues. These are some of the recent trends in the developing world that have caught the interest of multinational investors.