When do you stop “developing” and become “developed”?

Just a late night thought – when do all these "rapidly developing economies" and "developing nations" stop developing and become developed? Who sets the bar? Who decides? What was the metric?

Who has the answers?

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3 Responses to When do you stop “developing” and become “developed”?

  1. James Othmer says:

    Hello Niti Bhan,
    Just wanted to compliment your excellent and provocative blog, which I came across while researching my next novel, and to introduce myself.
    I’m a former ECD at Young & Rubicam, NY, and the author of the recent novel The Futurist, which lampoons a lot of business people who miscommunicate (and drain) value across cultures for all the wrong reasons.
    My next book deals with similar problems but is focused more on the follies of businesses and companies specifically trying to figure out how to get a piece of the proverbial action in “rising” India and China.
    Anyway, your pieces are so smart and informative I wanted to thank you. Your blog is one way to be a catalyst for change, and I like to think that my books (with the more Swiftian approach of using satire to “shame men out of their vices.”) can serve as another.
    Cheers and best regards,
    James P. Othmer

  2. I think investors ultimately decide which nations are “developing” and which nations are “developed.” Developed nations have (1) strong currencies (the dollar, the euro, the yen) that are freely traded in the global financial markets (2) relatively stable economic outlooks (i.e. growth < 10% per year and little risk of a huge financial meltdown) (3) mature, diversified economies and (4) democratically-elected governments. These markets are considered less risky by institutional investors (i.e. pension funds & college endowments), and so capital naturally flows to these nice, safe locations.
    Given these criteria, it's clear why a country like Russia is still lumped into the "developing nation" category – the Russian ruble trades only within the former Soviet Union; the country has "lumpy" economic forecasts (either really, really good or really, really bad); very little in the way of a mature middle class; and the country depends on commodities like oil & gas. Plus, the country is run by a little authoritative dictator posing as a Westernizer. Yet… if you walk the streets of Moscow, you'd swear you were in Paris or some other European capital.

  3. Niti Bhan says:

    James, thank you for your kind words and looking forward to reading your book!
    Dominic: Thank you for your insights – I do note however that Stiglitz and others have been re-revaluating hte extent to which #4 applies and to what degree of freedom – take singapore as an example. However your excellent summary makes me think that perhaps “developing” can imply a far positive connotation than currently assigned to it – that of a nation that is in transition or process of high growth rather than plateaued into stable maturity

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