World Trade Report Trade and Development: 2014 Recent Trends and the Role of the WTO

Total Page:16

File Type:pdf, Size:1020Kb

World Trade Report Trade and Development: 2014 Recent Trends and the Role of the WTO World Trade Report Trade and development: 2014 recent trends and the role of the WTO How do 4 recent major economic trends change how developing countries can use trade to facilitate their development? • the rise of the developing world • the higher prices of commodities • the expansion of global value chains • the increasingly global nature of macroeconomic shocks And what role does the WTO play? WTR_2014_promo_flyer_A4_7509_14_E.indd 1 13.10.14 13:03 II – TRADE AND DEVELOPMENT: RECENT TRENDS AND THE ROLE OF THE WTO II B. T DEVELOP OF THE HE GLO I NCREAS B AL ECONOMY AL I NG COUN NG I NG I MPOR T R T I ANCE Key facts and fi ndings ES I N The increasing importance of developing countries in the global economy • Since 2000, GDP per capita of developing countries has • GDP growth has moved hand in hand with integration in grown by 4.7 per cent, while developed countries only the world economy. The share of developing economies grew by 0.9 per cent. This has narrowed differences in in world output increased from 23 per cent to 40 per cent GDP per capita between countries. However, developing between 2000 and 2012 in purchasing power parity economies are still much poorer than developed countries, terms. The share of developing countries in world trade and millions remain in poverty even in the most dynamic also rose from 33 per cent to 48 per cent. developing countries. Figure B.9: Shares of selected economies in world GDP at purchasing power parity, 2000–12 Shares(percentage) of selected economies in world GDP at purchasing power parity, 2000–12 (percentage) 2000 2012 Other Other developing, 13% developing, 15% South Africa, 1% LDCs, 1% South Africa, 1% LDCs, 2% Argentina, 1% Argentina, 1% Saudi Arabia, Kingdom of, 1% Saudi Arabia, Indonesia, 1% Kingdom of, 1% United European Turkey, 1% Turkey, 1% States, Other Union (27), Other Korea, Rep. of, 2% Indonesia, 1% 20% developing, 25% developing, Mexico, 3% 13% Korea, Rep. of, 2% 15% G-20 Russian Federation, 3% Mexico, 2% G-20 Developed, Developed, developing, developing,48% Brazil, 3% 25% 61% Brazil, 3% 36% European India, 4% Russian Federation, 3% Union (27), China, 7% United India, 6% 19% Other developed, 5% States, 24% China, 15% Japan, 6% Japan, 8% Other developed, 4% Source: IMF World Economic Outlook database, October 2013. II. TRADE AND DEVELOPMENT: receNT TreNDS AND The ROLE OF The WTO The rise of global value chains (GVCs) • Fragmentation of global production has accelerated and increasingly involves developing countries. More than Imports of parts and components by country group, 1996–2012 (US$ billion) half of developing countries’ total exports in value-added terms are now related to GVCs and the share of GVC- based trade between developing countries quadrupled 3,000 13 over the last 25 years. 2,500 • GVC participation leads to productivity enhancements through technology and knowledge transfers. Countries 2,000 with greater GVC participation have higher growth B_WTO_WTR_2014_BAC1405B0037.indd 13 06/08/2014 7:02:43 PM rates. However, participation in GVCs may involve risks. 1,500 For example, while it may make industrialization easier to achieve, competitive advantage can become more 1,000 fl eeting, increasing vulnerabilities to relocation of fi rms. 500 • Countries with a favourable business environment and low tariffs participate to a greater extent in GVCs. Aid 0 for Trade facilitation can help address some obstacles, such as lack of infrastructure and customs barriers. GVCs 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 are associated with “deep integration” agreements: C. more than 40 per cent of free trade agreements in force Developed G-20 developing Other developing VALU THE RISE OF GLOBAL today include provisions related to competition policy, Source: UN Comtrade database, WTO Secretariat. E investment, standards and intellectual property rights. CH A I N S WTR_2014_promo_flyer_A4_7509_14_E.indd 2 13.10.14 13:03 5 C_WTO_WTR_2014_BAC1405B0037.indd 5 07/08/2014 5:04:40 PM world trade report 2014 A new role for commodities in development Quarterly merchandise exports per region, 2007Q1–2013Q2 strategies (Year-on-year percentage change in US$ values) • Prices of food, energy, metals and minerals roughly 80 doubled since 2000. Despite a slight moderation from 2008 peaks, strong demand from large developing 60 countries is among the reasons to believe that the high- 40 price environment may stay. Price volatility will also 20 likely continue to characterize commodity markets. 0 • Developing countries increased their market share –20 in global agricultural exports from 27 to 36 per cent –40 between 2000 and 2011. But traditional market access –60 barriers such as tariffs and subsidies continue to affect their exports and non-tariff measures are playing an 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 World Commonwealth of Independent States North America Asia South and Central America increasingly important role. Others Europe Source: WTO short-term merchandise trade statistics. • Trade in natural resources has also grown strongly Notes: Data are not seasonally adjusted. since 2000. Several resource-rich countries have achieved high growth, but the social and environmental impacts of natural resource extraction remain signifi cant challenges. The WTO and developing countries • Commitments are a key feature of international trade Real annual price indexes of selected commodities, 2000- 13 (2000=100, real 2005 US$) agreements. Countries undertaking substantial reforms related to WTO accession been found to grow about 2.5 per cent faster for several years. 300 250 • As long as certain market failures persist, rule-based 200 150 fl exibilities are important to allow developing countries 100 to undertake such commitments. In the WTO system, 50 these countries benefi t from special and differential 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 8 (S&D) treatment by providing less-than-full reciprocity Food Energy Metals and minerals for trade concessions and through other fl exibilities. Source: World Bank Commodity Price Data. E_WTO_WTR_2014_BAC1405B0037.indd• The 8 Committee on Trade and Development is the focal 30/06/2014 6:04:05 PM point on development issues in the WTO. It considers Increased synchronization and globalization concerns raised by developing countries, promotes of macroeconomic shocks transparency and oversees the implementation of WTO trade-related technical assistance. • During the global crisis of 2008-09, trade declined • At the Bali Ministerial Conference in December 2013, in a rapid and synchronized manner not observed WTO members reinforced the development dimension before. It illustrated the dependency of countries on of the WTO. economic developments elsewhere. Macroeconomic volatility, which previously had been declining, can set • Trade and the WTO will have a central role to play in back development by reducing economic growth and addressing development challenges post-2015. adversely affecting income distribution. • A coordinated international response, the existence of trade rules and the effectiveness of monitoring efforts by the WTO restrained protectionism, despite the severity of the global economic crisis. WTR_2014_promo_flyer_A4_7509_14_E.indd 3 13.10.14 13:03 World Trade Report 2014 The World Trade Report 2014 looks at four major trends that have changed the relationship between trade and development since the start of the millennium: the economic rise of developing economies, the growing integration of global production through supply chains, the higher prices for agricultural goods and natural resources, and the increasing interdependence of the world economy. Many developing countries have experienced unprecedented growth and have integrated increasingly into the global economy, thereby opening opportunities for countries still lagging behind. However, important barriers still remain. Integration into global value chains can make industrialization in developing countries easier to achieve. Upgrading to higher-value tasks within these supply chains can support further growth. But competitive advantage can be lost more easily, and achieving such upgrading can be challenging. Higher prices for agricultural goods and natural resources have helped some developing countries achieve strong growth. But higher prices can cause strains for net importers of these goods. Growing interdependence within the global economy allows countries to benefi t more quickly from growth in other parts of the world. But it can also cause challenges as crises can be quickly transmitted across borders. Many developing countries still have a long way to go in addressing their development challenges. The multilateral trading system provides developing countries, and particularly least-developed countries, with unique opportunities to do so. Further progress in the Post-Bali Agenda would therefore be important to making trade work more effectively for development. “This year’s World Trade Report shows that four recent trends have reshaped the relationship between trade and development. Many developing countries have taken advantage of the new opportunities, experiencing rapid economic growth alongside deepening trade integration, lifting millions of people out of poverty. The open, non-discriminatory, rules-based multilateral trading system, as embodied in the WTO, has been important in underpinning their success. But the recent trends also hold challenges and a long road still lies ahead for many developing economies. The WTO’s work is therefore more important than ever. The decisions taken by WTO members in Bali last year can help poor countries realize their export potential. We now need to implement those decisions and continue to advance trade negotiations at the WTO.” Roberto Azevêdo WTO Director-General Further information The World Trade Report is an annual This Report is available electronically at WTO Online Bookshop publication that aims to deepen www.wto.org.
Recommended publications
  • The Decline of Neoliberalism: a Play in Three Acts* O Declínio Do Neoliberalismo: Uma Peça Em Três Atos
    Brazilian Journal of Political Economy, vol. 40, nº 4, pp. 587-603, October-December/2020 The decline of neoliberalism: a play in three acts* O declínio do neoliberalismo: uma peça em três atos FERNANDO RUGITSKY**,*** RESUMO: O objetivo deste artigo é examinar as consequências políticas e econômicas da pandemia causada pelo novo coronavírus, colocando-a no contexto de um interregno gram sciano. Primeiro, o desmonte da articulação triangular do mercado mundial que ca- racterizou a década anterior a 2008 é examinado. Segundo, a onda global de protestos e os deslocamentos eleitorais observados desde 2010 são interpretados como evidências de uma crise da hegemonia neoliberal. Juntas, as crises econômica e hegemônica representam o interregno. Por fim, argumenta-se que o combate à pandemia pode levar à superação do neoliberalismo. PALAVRAS-CHAVE: Crise econômica; hegemonia neoliberal; interregno; pandemia. ABSTRACT: This paper aims to examine the political and economic consequences of the pandemic caused by the new coronavirus, setting it in the context of a Gramscian interregnum. First, the dismantling of the triangular articulation of the world market that characterized the decade before 2008 is examined. Second, the global protest wave and the electoral shifts observed since 2010 are interpreted as evidence of a crisis of neoliberal hegemony. Together, the economic and hegemonic crises represent the interregnum. Last, it is argued that the fight against the pandemic may lead to the overcoming of neoliberalism. KEYWORDS: Economic crisis; neoliberal hegemony; interregnum; pandemic. JEL Classification: B51; E02; O57. * A previous version of this paper was published, in Portuguese, in the 1st edition (2nd series) of Revista Rosa.
    [Show full text]
  • WT/GC/W/757 16 January 2019 (19-0259) Page
    WT/GC/W/757 16 January 2019 (19-0259) Page: 1/45 General Council Original: English AN UNDIFFERENTIATED WTO: SELF-DECLARED DEVELOPMENT STATUS RISKS INSTITUTIONAL IRRELEVANCE COMMUNICATION FROM THE UNITED STATES The following communication, dated 15 January 2019, is being circulated at the request of the delegation of the United States. _______________ 1 INTRODUCTION 1.1. In the preamble to the Marrakesh Agreement Establishing the World Trade Organization, the Parties recognized that "their relations in the field of trade and economic endeavor should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development…." 1.2. Since the WTO's inception in 1995, Members have made significant strides in pursuing these aims. Global Gross National Income (GNI) per capita on a purchasing-power-parity (PPP) basis, adjusted for inflation, surged by nearly two-thirds, from $9,116 in 1995 to $15,072 in 2016.1 The United Nations Development Program's (UNDP) Human Development Index (HDI) for the world increased from 0.598 to 0.728 between 1990 and 2017.2 According to the World Bank, between 1993 and 2015 — the most recent year for which comprehensive data on global poverty is available — the percentage of people around the world who live in extreme poverty fell from 33.5 percent to 10 percent, the lowest poverty rate in recorded history.3 Despite the world population increasing by more than two billion people between 1990 and 2015, the number of people living in extreme poverty fell by more than 1.1 billion during the same period, to about 736 million.4 1.3.
    [Show full text]
  • Burgernomics: a Big Mac Guide to Purchasing Power Parity
    Burgernomics: A Big Mac™ Guide to Purchasing Power Parity Michael R. Pakko and Patricia S. Pollard ne of the foundations of international The attractive feature of the Big Mac as an indi- economics is the theory of purchasing cator of PPP is its uniform composition. With few power parity (PPP), which states that price exceptions, the component ingredients of the Big O Mac are the same everywhere around the globe. levels in any two countries should be identical after converting prices into a common currency. As a (See the boxed insert, “Two All Chicken Patties?”) theoretical proposition, PPP has long served as the For that reason, the Big Mac serves as a convenient basis for theories of international price determina- market basket of goods through which the purchas- tion and the conditions under which international ing power of different currencies can be compared. markets adjust to attain long-term equilibrium. As As with broader measures, however, the Big Mac an empirical matter, however, PPP has been a more standard often fails to meet the demanding tests of elusive concept. PPP. In this article, we review the fundamental theory Applications and empirical tests of PPP often of PPP and describe some of the reasons why it refer to a broad “market basket” of goods that is might not be expected to hold as a practical matter. intended to be representative of consumer spending Throughout, we use the Big Mac data as an illustra- patterns. For example, a data set known as the Penn tive example. In the process, we also demonstrate World Tables (PWT) constructs measures of PPP for the value of the Big Mac sandwich as a palatable countries around the world using benchmark sur- measure of PPP.
    [Show full text]
  • How Progressive Companies Create Long-Term Value and Competitive Advantage
    How Progressive Companies Create Long-Term Value and Competitive Advantage Through their talent development strategy Through Their Talent Development Strategy How can I have a talent development strategy when I can’t find the talent? Topics Covered 1. Why employers can’t fill their open positions 2. Who’s available 3. How to create a talent development strategy – and integrate into business strategy a) Job design b) Sources of talent c) Operations d) Benchmarking 4. What this means for your business and your community 5. Call to Action 6. How to use this information 1 Why employers can’t fill their open positions Why You Can’t Fill Your Open Positions Skills Gap YES, 90% of jobs require some education or training after high school, but only 50% of us have that Awareness and Parental Influence YES, parents are biased against some sectors or non- bachelor degree programs Why You Can’t Fill Your Open Positions There are barriers to overcome Transportation to school and/or work Transit study/regional indicators report – only 59% of regional jobs are reachable by public transit Access to affordable, quality child care that meshes with job and/or school schedules Quality child care is more expensive than college tuition Home based care vs. center based care is preferred for evenings/overnights i.e. 2nd and 3rd shift Intimate Partner Violence On average, 30% (some sites 50%+) of job seekers (81% female/19% male) have some experience with intimate partner intimidation or violence 177 children in the homes of those reporting issues Why You Can’t Fill Your Open Positions They can’t afford to go back to school …or to take that job.
    [Show full text]
  • World Business and the Multilateral Trading System
    International Chamber of Commerce The world business organization Policy statement Commission on Trade and Investment Policy World business and the multilateral trading system ICC policy recommendations for the Cancún Ministerial Conference of the World Trade Organization (10-14 September 2003) Paris, 14 May 2003 International Chamber of Commerce 38, Cours Albert 1er, 75008 – Paris, France Telephone +33 1 49 53 28 28 Fax +33 1 49 53 28 59 Web site www.iccwbo.org E-mail [email protected] ICC policy statement WTO Cancún ministerial conference, 10-14 September 2003 World business and the multilateral trading system ICC policy recommendations for the Cancún Ministerial Conference of the World Trade Organization (10-14 September 2003) World business, as represented by ICC, believes strongly that the rules-based multilateral trading system built up through the General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) is one of the central pillars of international cooperation. It has contributed greatly to liberalizing world trade and improving market access, and is a major driving force for global economic growth, job creation, and wider consumer choice. ICC wishes to take this opportunity to convey key business messages and policy recommendations to trade ministers participating in the 5th WTO Ministerial Conference in September 2003 in Cancún (Mexico). Now that the war in Iraq is over, ICC urges WTO members to put their divisions behind them and commit themselves to renewed multilateral cooperation for the vital purposes of rebuilding business and consumer confidence and reinvigorating a weak global economy. It is in the urgent interest of all WTO member countries to work closely together to ensure the success of the Doha Development Agenda, launched at the 4th Ministerial Conference of the WTO in November 2001 at Doha (Qatar).
    [Show full text]
  • Strategies for Competitive Advantage Cole Ehmke, M.S
    WEMC FS#5-08 Strategies for Competitive Advantage Cole Ehmke, M.S. Extension Educator, Department of Agricultural and Applied Economics University of Wyoming Overview A competitive advantage is an advantage gained over competitors by offering customers greater value, either through lower prices or by providing additional benefits and service that justify similar, or possibly higher, prices. For growers and producers involved in niche marketing, finding and nurturing a competitive advantage can mean increased profit and a venture that is sustainable and successful over the long term. This fact sheet looks at what defines competitive advantage and discusses strategies to consider when building a competitive advantage, as well as ways to assess the competitive advantage of a venture. The Essence of Competitive Advantage To begin, it may be helpful to take a more in-depth look at what it means to have a competitive advantage: an edge over the competition. Essentially a competitive advantage answers the question, “Why should the customer purchase from this operation rather than the competition?” For some ventures, particularly those in markets where the products or services are less differentiated, answering this question can be difficult. A key point to understand is that a venture that has customers has customers for a reason. Successfully growing a business is often dependent upon a strong competitive edge that gradually builds a core of loyal customers, which can be expanded over time. Producers and suppliers familiar with farming and ranching may know that successful ventures in the agriculture industry have typically operated in a commoditized, price-driven market, where all parties produce essentially the same product.
    [Show full text]
  • Building a Sustainable Competitive Advantage in Today's Knowledge
    The Definitive Voice of the Career College Sector of Higher Education MOGHADAM November 2014 Building a Sustainable Competitive Advantage in Today’s Knowledge Economy Dr. Amir Moghadam President/CEO MaxKnowledge, Inc. It’s been widely accepted that we have entered a new era of knowledge-based economy where an organization’s effective utilization of intangible assets such as employee skills, abilities and innovation are key to building a competitive edge. What does this mean for career colleges? Career colleges, just like all organizations, must improve their adaptive capabilities to sustain long-term competitive advantage. Every institution must be effective at creating change; not just responding to it. Disruption has become a market norm and in higher education we’ve seen many examples including the emergence of massive open online courses (MOOCs), adaptive learning, competency-based programs, and of course regulatory changes to name only a few. Additionally, our market has experienced shifting student demographics as well as shifting attitudes about the purpose and ROI of higher education. How do career colleges create and embrace adaptability as a new competitive advantage? Institutional leaders must first recognize the potential their employees already possess. The collective, diverse cognitive power of an institution’s employees provides more opportunity for innovation than any other resource. Higher education institutions, more so than any other type of organization, should also understand that if people are the engine for innovation, knowledge provides the fuel that sets the engine in motion. Thus, an institution’s investment in its employees’ learning and professional development is an investment in building innovation capability necessary for sustainable competitive advantage.
    [Show full text]
  • Regions Do to Compete? Director Center for Regional Competitiveness 3
    CONNECTING INNOVATION & Four Key Questions REGIONAL DEVELOPMENT Four Key Questions The Critical Role of Universities 1. Why is regional competitiveness the new framework for economic development? Mark Drabenstott 2. What must regions do to compete? Director Center for Regional Competitiveness 3. How to connect innovation with regional development? University of Missouri-Columbia 4. What policy initiatives are needed? [email protected] FourFour KeyKey QuestionsQuestions Globalization makes regions the athletes in the global economic race. 1. Why is regional competitiveness the new framework for economic development? The impact of globalization is greater 2. What must regions do to compete? for regions than for nations. 3. How to connect innovation with regional development? 4. What policy initiatives are needed? The impact of globalization is The impact of globalization is greater for regions than for nations. greater for regions than for nations. 17 % range 6.2% range Globalization has changed Innovation is now a powerful economic driver. the field of play in this race. National Entrepreneurship Index and GDP Growth Average GDP Growth (2004 to 2006) 12 China Venezuela 10 India Innovation now matters more than 8 Russia Hong Kong simply being a low-cost place. 6 4 2 U.S. Japan European countries 0 0 5 10 15 20 25 30 35 Total Entrepreneurship Activity Index (2003) Source: Global Entrepreneurship Monitor, 2003 and International Monetary Fund Source: Drabenstott & Henderson, 2006 FourFour KeyKey QuestionsQuestions To prosper, rural regions must: 1. Why is regional competitiveness the new 1. Craft a regional strategy. framework for economic development? 2. Build robust regional governance. 2. What must regions do to compete? 3.
    [Show full text]
  • STATISTICS BRIEF Purchasing Power Parities – Measurement and Uses
    STATISTICS Purchasing power BRIEF parities – measurement 2002 March No. 3 and uses by Paul Schreyer and Francette Koechlin How does one compare economic data between countries that is expressed in units of national currency? And in particular, how should measures of production and Gross Domestic Product (GDP) be converted into a common unit? One answer to this ques- tion is to use market exchange rates. While straightforward, this turns out to be an unsatisfactory solution for many purposes – primarily because exchange rates reflect so many more influences than the direct price comparisons that are required to make In this issue volume comparisons. Purchasing Power Parities (PPPs) provide such a price compari- son and this is the rationale for the work of the OECD and other international organisa- 1 What are PPPs? tions in this field (see chart 1). The OECD publishes new sets of benchmark PPPs every three years, drawing on detailed international price comparisons. Every time a new set of 2 Who uses them? benchmark PPPs is released, this also gives rise to a new set of international compari- 3 How to measure sons of levels of GDP and economic welfare. economic welfare, ... 3 ... the size of economies, ... What are PPPs? 4 ... productivity ? In their simplest form, PPPs are price relatives, which show the ratio of the prices in 5 Comparing price levels national currencies of the same good or service in different countries. A well-known 5 Inter-temporal compari- example of a one-product comparison is The Economist’s BigMacCurrency index, sons: using current presented by the journal as ”burgernomics”, whereby the BigMac PPP is the conversion or constant PPPs rate that would mean hamburgers cost the same in America as abroad.
    [Show full text]
  • Oecd Development Centre
    OECD DEVELOPMENT CENTRE Working Paper No. 16 (Formerly Technical Paper No. 16) COMPARATIVE ADVANTAGE: THEORY AND APPLICATION TO DEVELOPING COUNTRY AGRICULTURE by Ian Goldin Research programme on: Changing Comparative Advantage in Food and Agriculture June 1990 TABLE OF CONTENTS SUMMARY . 9 PREFACE . 11 INTRODUCTION . 13 PART ONE . 14 COMPARATIVE ADVANTAGE: THE THEORY . 14 The Theory of Comparative Advantage . 14 Testing the theory . 15 The Theory and Agriculture . 16 PART TWO . 19 COMPETITIVE ADVANTAGE: THE PRACTICE . 19 Costs and Prices . 19 Land, Labour and Capital . 20 Joint Products . 22 Cost Studies . 22 Engineering Cost Studies . 23 Revealed Comparative Advantage . 25 Trade Liberalisation Simulations . 26 Domestic Resource Cost Analysis . 29 PART THREE . 32 COMPARATIVE ADVANTAGE AND DEVELOPING COUNTRY AGRICULTURE . 32 Comparative Advantage and Economic Growth . 32 Conclusion . 33 NOTES . 35 BIBLIOGRAPHICAL REFERENCES . 36 7 SUMMARY This paper investigates the application of the principle of comparative advantage to policy analysis and policy formulation. It is concerned with both the theory and the measurement of comparative advantage. Despite its central role in economics, the theory is found to be at an impasse, with its usefulness confined mainly to the illustration of economic principles which in practice are not borne out by the evidence. The considerable methodological problems associated with the measurement of comparative advantage are highlighted in the paper. Attempts to derive indicators of comparative advantage, such as those associated with "revealed comparative advantage", "direct resource cost", "production cost" and "trade liberalisation" studies are reviewed. These methods are enlightening, but are unable to provide general perspectives which allow an analysis of dynamic comparative advantage.
    [Show full text]
  • Presentation
    Main messages • Trade and the WTO have contributed to the development successes of the past decade and a half. • But there are still big development challenges ahead and both trade and the WTO have big contributions to make. Four key trends • Rise of developing countries • Increased developing country participation in global value chains • Higher commodity prices • Increased synchronization of macroeconomic shocks Rise of developing countries Broad-based convergence • In the last decades, Figure B.8: Average annual growth in per capita GDP at purchasing-power-parity by level of development, 1990-2011 faster GDP growth (annual percentage change) in developing 7.0 countries has 6.6 6.0 allowed 5.4 5.0 4.7 convergence with 3.9 4.0 3.8 3.7 developed 2.9 3.0 2.4 countries. 1.8 1.9 2.0 1.5 1.2 0.9 0.9 1.0 • Growth has been 0.0 broadly spread: -1.0 -0.7 - G-20 developing -1.3 -2.0 countries have shown World Developed Developing G-20 Other Least LDC oil LDC economies economies developing developing developed exporters agricultural double-digit growth economies economies countries products - Natural resource (LDCs) exporters exporters have 1990-2000 2000-2011 benefited from higher commodity prices. Role of trade • GDP growth has moved hand in hand with integration in the world economy. • Although this relationship does not show causation, we know trade increases growth through various channels. Poverty • There has been a dramatic reduction in poverty. • Many countries have surpassed their MDG goals. Figure B.12: Share of population living in households below extreme poverty line, selected countries, 2000-11 • But the share of (per-cent) population in 70 extreme poverty has increased in a 60 few countries.
    [Show full text]
  • Knowledge As a Source of Competitive Advantage in Knowledge Based Companies
    MANAGEMENT AND ORGANISATION Ivona Vrdoljak Raguž University of Dubrovnik Department of Economics and Business Economics, Croatia E-mail: [email protected] Senka Borovac Zekan University of Split University Department of Professional Studies, Croatia E-mail: [email protected] Ivan Peronja University of Split Faculty of Maritime Studies E-mail: [email protected] KNOWLEDGE AS A SOURCE OF COMPETITIVE ADVANTAGE IN KNOWLEDGE BASED COMPANIES Review UDK: 005.941 JEL classification: D83, L25, O31, M14 Abstract Modern company in today’s economy is no longer solely dependent on its tangible assets such as real estate, factories or facilities. Doing business in today’s global economy creates new types of companies which are becoming increasingly dependent on their intangible assets such as information and knowledge. Today’s new economy has become global and information driven, and the first time in the history of the organization theory knowledge becomes companies the most valuable resource. Knowledge affects the creation of new value in the company, but it also affects on the creation of new knowledge. The use of the Internet enables its distribution in the global context. Knowledge can not be fully diminished. On the contrary, the more being used, it increases, expands and deepens. Therefore modern knowledge based companies need to continually work on their knowledge-based strategy as a source of the competitive advantage. This paper discusses the impact of organizational culture on creation of such companies. Keywords: knowledge, organizational learning, knowledge based company, competitive advantages 533 DIEM 1. INTRODUCTION The globalization process affected many companies to realize the only way to remain competitive is to use the knowledge as a productive factor in some new ways.
    [Show full text]