Economics

A few decades ago, the developing countries were producing primary products more than the manufactured products. A new trend has been observed that indicates an increase in production of manufactured products. The effects of globalization can be said to have resulted in this phenomenon along other causes. Developing countries are exporting more manufactured products than primary products today.

Globalization has caused the rapid technological progress in the world. New technologies have been researched on and new products and production methods are being developed each day. The developing countries have rapidly absorbed these new technologies. This has led to establishment of new industries which are focused on the manufactured products rather than the primary products. Globalization has increased communication between developed and developing countries. Technology can be transferred to different parts of the world more easily today. More investors from the developed countries can invest in the markets of developing countries. This has transformed the developing nations from primary producers to manufacturers.

Trade has increased between the developed and developing countries. There are many trade agreements being formed between countries to improve trade in the international markets. The developing countries have increased their bargaining power in the international market in the trade of goods and services. The expanded market has created opportunities for developing countries to shift from producing primary products to manufacturing. The developing countries have been able to access markets which were inaccessible and this has increased the capacity to produce manufactured products. Regulations in the international markets have been enacted to prevent exploitation of the developing nations by the advanced countries. Such regulations have reduced competition from established industries in the world.

Integration of financial markets creates the opportunity for faster long-term growth of the developing countries. Business activities can be conducted all over the world due to the ease in access to the financial markets. Exchange rates are being developed to enable the smooth operation of the international market activities. Some countries have developed common currencies to be used across the borders. This has enabled the developing countries access markets for their manufactured products hence, shifting from production of primary products.

The increasing climate change is not favoring agricultural production. Most developing countries rely on natural resources to produce agricultural products and raw materials. This has reduced over reliance on these resources since they are becoming scarce. The scarcity of resources to produce primary products has caused these countries to result into producing manufactured products.

The theoretical foundations of the international trade analysis indicate that the developing nations produce more primary products than the manufactured products. The reverse has been explained to happen for the developed countries. These theories have been disapproved by the recent trade patterns in the international scene. More manufactured products than primary products are being exported by the developing countries.

Conclusion
The theories about developed countries that were developed some decades ago should be changed to include the current trends in the international market. Developing countries are rapidly shifting from production of primary products to manufacturing products.