Why some nations experienced rapid?

It is evident form the different region and countries that are active and operating all over the world that economic growth is not equally distributedamongst all nations. Some countries depict an increasing rate of economic growth like in China, India and Singapore, while others are facing recession like Europe and America. Moreover the nature of the economic growth is also different ranging from short term economic growth to sustainable long term economic growth. The following paper provides information on the matter of economic growth and why it is different for different countries in the world.

The major sources of growth which can result in a successful macroeconomicenvironmentin a country pertain to growth in the productivity and the operations taking place in the country. Private ownership of industries and businesses motivates people to be more successful at them and perform better resulting in exponential economic growth in the region.

Aside from this the policies favoring freedom to exchange enable the business to interact and trade freely resulting in more economic activity. Competitive markets reduce inefficiencies and provide continuous improvement for the industry and the economy. An efficient capital market enables the region to convert its capital mechanism into a wealth generating projects. Moreover the present of monetary stability in the region contains and stabilizes the pricing in the market as well.

This is as opposed to inflationary monetary policies which distort optics in the regional market. The low tax rates in the region also enable the country to achieve economic growth as the people are able and permitted to keep more of what they earn off their productivity, resulting in more drive to increase their productivity. Lastly establishment of free trade zones enable the region to increase its economic activity as well as the country can export products it is efficient at producing and can import those which it dopes not have at very low costs.

The above highlighted main elements which lead to economic growth of regions and countries can be lacking in some countries, and this is the main reason as to why some countries experience economic growth while other don’t in the same period of time. Countries having a high level ofpoverty, unemployment and the lack of basic infrastructure and standardized way of life often experience stagnant economic growth.

However if capital investment is made in these countries to make use of the unemployment levels and increase productivity and employ people in the industries, then its possible to create a long term positive economic growth for the country. Countries riddled with bureaucracy are often having high level of inefficiencies in its markets resulting in stunted growth. Similarly the lack of establishment of relations with other countries and the lack of trade zones and agreements can also result in low productivity ad trade for the country depicting low or no level of economic growth.

As highlighted above capital investment in the country is very important, specific to the development of the infrastructure and establishment of new profit generating industries. One sector of immense growth is thetechnologyand the telecommunications sector. Investment in the field of information technology can increase thecommunicationnetwork in the region.

“ There are three main channels through which ICT can affect growth rates of GDP per capita: i) an acceleration of productivity in the ICT-producing sectors themselves and, despite what was said above about the limited role for shifts between broad economic sectors, a growing size of ICT-producing sectors in the economy; ii) capital deepening across the economy, driven by rapid investment in ICT equipment, and resulting in a boost to labor productivity; and iii) widespread spillover effects on productivity arising from the use of ICT technology.” (Elmeskov & Scarpetta, 2000)

In order to induce growth in a region, in the long term, some sacrifices have to be made in the short term for a sustainable level of growth which is not temporary or non incremental and developmental in nature. The most evident sacrifice that needs to be made is by the consumers and the people in the country who have to savemoneyand reduce their spending on consumer goods specifically those imported form international sources. Instead buying locally produced goods and services increases the demand and therefore the productivity in the local market resulting in economic growth which is developmental in nature. Aside form this the decisions need to be made where the industries and the companies operating in the region have to invest in projects which provide long term sustainable growth instead of short term profit generating projects.

It is also possible for the political, social and the legal environment in certain countries to pose as barriers for sustained economic growth. The political scenario in the country determines the focus the developmental and economic policies being made in the region. An unstable political environment provides uncertainty in the industry resulting in lack of economic growth while a development oriented political climate increases economic growth in the region. Similarly the legislature pertaining to how trade is conducted with countries and the nature of investment in the region also determine economic growth for the region.

If the legislature is very conservative hinting bureaucracy then it poses as a barrier for economic growth. Moreover the social constructs and the cultural values of the people in a country can also result in reduced economic growth. One main example of this is the lack of women participation in the contribution towards the economy in the South Asian and Middle Eastern countries.


  • Elmeskov, J., Scarpetta, S., ‘ New Sources Of Economic Growth In Europe?’, The New Millennium – Time For A New Economic Paradigm, 2000, accessed March 9, 2008 from