Libmonster ID: UK-1475
Author(s) of the publication: E. A. BRAGINA

The modern world economy is characterized by high dynamics in the ratio of the level and rates of economic growth of its constituent countries. The speed, quantitative and qualitative indicators of this process are constantly changing, becoming its distinctive feature, especially since the second half of the XX century. The differences in economic potentials are most evident in the interaction between developed and developing countries. The very appearance of these categories, of which the second category is relatively quickly filled with new content, reflects complex deep processes.

The term "backward countries" was quickly replaced by the more correct "developing", then generalizing "third world", which became widely popular. In 2010, such an authority as E. Maddison, a British economist and author of major works on historical statistics, expressed the opinion that the third world is over1. The recently proposed "rising" and "growing" countries record qualitative changes in the positions of this group and, as a result, the renewal of the structure of the world economy.

The book of Professor, Doctor of Economics of VA. Melyantseva " Long-term trends, counter-trends and factors of economic growth in developed and developing countries "(Moscow, Publishing House "Key", 2015. 80 p.) is devoted to a topical and very complex topic - deep, sometimes dramatic changes in the ratio of economic positions of the main groups, developed countries (WG) and developing countries (PC)*. This division has become a key element in the analysis of the modern world economy. The title of the paper sounds a bit heavy, but it reflects the multi-level nature of the peer-reviewed research, which does not involve unambiguous answers.

In a brief Introduction, V. Melyantsev notes a noticeable decline in economic and geopolitical stability in the world. The indicators presented in the text show significant differences between the two groups of countries, especially in regions with a predominance of developing countries. "Contradictions are growing between and within countries and groups of countries" (p. 4).

A certain paradox is the formation of a long - term trend against this background, during which humanity, based on technological achievements and, no less important, institutional changes, moved in 1950 - 2014 to an average annual growth rate of 2.5 - 2.6%, compared with 0.9-1.0% in the previous 150 years (p. 5). The author does not consider it possible to predict the growth of writes how stable (irreversible)it is this is a long-term development. But we can assume that the capacity of the productive forces that already exist, and especially those that are being created on a modern technological basis, provides some (unfortunately, not very reliable) grounds for maintaining growth rates that benefit all groups of countries.

From the above indicators, it seems that the topic of sustainable development, which is currently fashionable, is rather of theoretical interest. The repetition of economic crises both regional and global, and the next one, despite the abundance of predictions, comes unexpectedly, indicates the growing instability of the system as a whole. This has become one of the inevitable results of the growing volume of financial transactions, the speed of movement of their flows with limited control over them.

The current crisis is marked by a massive withdrawal of capital from developing countries.-


* Following the author of the book, the review uses these abbreviations (author's note).

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emerging markets, especially China, Brazil, Indonesia, and Turkey. This is characterized by constant criticism of global regulators, primarily the World Bank, the IMF, and the WTO, for their inefficiency in mitigating these fluctuations.

With reference to S. Kuznets, the 1971 Nobel Prize winner in Economics, who studied the patterns of changes in the structure of GDP and employment, the author examines the features of modern economic growth, which began two or two and a half centuries ago. This relatively short period, by historical standards, saturated with wars, revolutions, crises, and revolutions in the methods of production, led, as emphasized by V. V. Putin. Melyantsev, to a qualitatively new phenomenon. The economic feasibility of investing in a person has been identified as a profitable / promising placement of funds that changes not only the economic base, but also the social, including cultural foundations of society.

Human capital is now a popular socio-economic category, having appeared relatively recently, it has taken a stable position in all areas. The scale of national allocations for its development and improvement has become an important indicator of the state's success/failure.

I would like to assume that the recognition of the importance of such investments indicates a certain humanization of world development, but rather a practical approach works - a healthy and trained employee is more effective (more profitable) than a frail ignoramus. The author's calculations show that the average annual growth rate of aggregate factor productivity, including through improving the quality of labor, is noticeably, although unevenly, increasing in both groups of countries.

In a long time interval, the advantages in the scale of this indicator are retained by the RGS. For example, the number of years of study is more than twice as high in the RG as in the PC-18 years versus 8 (p. 12). This rather traditional, though important, indicator is supplemented by a more modern one, which largely contradicts the thesis about the stagnation of the RG - V. Melyantsev's data on the 8-10 - fold gap in favor of this group of countries in terms of per capita R & D expenditures (p. 39).

The problem of improving the quality of human capital is directly related to overcoming global poverty. The paper provides a clear formulation of the ambiguity of this category, which accompanies humanity throughout its history. Raising the standard of living of the population and increasing its effective demand "turned out, as a rule, to be positive externalities for the development of the economy" (p. 10).

According to the World Bank, the number of poor people in the world allegedly declined markedly in 2015, falling below $ 1 billion for the first time since it was recorded. people - up to 702 million, 9.6% of the world's population, compared to 902 million in 2012, 12.8% of the world's population. The reduction of poverty outlined in the UN Millennium Development Program, adopted in 2001 and then criticized for the unreality of the goal, was formally achieved, first of all, by increasing investment in education, especially in medicine and education, by international organizations and on the basis of interstate agreements. The most rapid expansion of education, including higher education, occurred in countries where it became widespread (massification), with the exception of sub-Saharan Africa2.

Despite all the contradictions of globalization, this process and its important (visual!) component-demonstration effect provided by modern ICT tools, stimulate positive changes in the PC. In this regard, V. Melyantsev emphasizes the importance of changes in their state systems, using the good but somewhat forgotten word "decent" institutions, meaning improving the development environment (p. 13). In relation to this position, the "institutional capacity" mentioned by the author is important, in other words, how effective the created institutions are in ensuring the intended goals (p.45).

The results of external influences and borrowings were not the same for different groups of countries. Among the laggards were the countries of the African continent, where high rates of demographic growth were combined not only with insufficient inflows of foreign capital, but also with its inefficient use. The World Bank's new poverty index of $1.9 per person per day, adopted in 2015, will significantly increase the estimated number of poor people. Governments in a number of countries will be forced to increase budget allocations to support the most disadvantaged, which is hundreds of millions of people.

The problem is complicated by the fact that most distribution systems are accompanied by abuse of officials and embezzlement of funds. Against the backdrop of the financial crisis, international organizations will hardly be able to significantly increase their allocations for

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projects to further reduce poverty. Noteworthy is the change in China's demographic policy-it is allowed to have a second child in the family since January 2016. The strict birth control that has been in place since 1979 has made China a country of an aging population, with a majority over the age of 60. It can be assumed that the increase will be mainly in rural areas, since the growing urban population, which accounts for about 50% of the total population, is less likely to increase childbearing.

If current trends continue, the share of women in the global population will continue to decline, with all the negative consequences of this process. Differences in the quality of life between the two groups of countries in the global economy in 2015 became one of the main reasons for the collapse of immigrants from the Middle East, partly African, to the developed countries of Western Europe. It is not difficult to assume that this is only the beginning of a new process with far-reaching consequences on a global scale.

The fate of developed countries is described in the reviewed work as "secular stagnation", but is mitigated by the possibility of a different growth (p. 15). V. Melyantsev lists the scientific and technical achievements developed in the WG and which have become the basis for cardinal global advances based on ICT. However, progress is not always unambiguous, the instability of global GDP growth has increased, and the efficiency of the economy as a whole has decreased (p. 22). One of the consequences was the transfer of business activity to the countries of the periphery, the creation of new industries there, taking into account cheap labor. But there are also significant changes. The importance of this factor is falling, and wages are rising in modern production facilities in China and India, which until recently were reserves of excess low-paid workers. One of the paradoxes of modern development is manifested in the outstripping growth of wages in the PC compared to the RG, but, of course, not in absolute terms. The current outflow of capital from emerging markets limits their investment opportunities, increasing competition in the global debt capital market.

Analyzing the recession in the Russian Federation, V. Melyantsev, among other explanations, along with the aging of the population, names such a psychological factor as a decrease in risk appetite, a necessary feature of business. It is important that the author noted this connection, which, unfortunately, is often overlooked when considering economic processes (p. 27). However, it is not entirely clear how risk aversion is combined with the growing "financialization of the Russian economy, and above all the US" (p.31).

Finance is the most volatile area of the modern economy, especially developed ones. Back during the Great Depression, there was a joke in the United States that someone needed one dollar, but cash, and the collapse began. Now that cash is rapidly being pushed out of circulation, cryptocurrencies have begun to function, hackers are becoming more active, and technical failures in the maintenance of this area are repeated with frightening regularity, any fluctuation in it can become a sign of another crisis. Or, feel the difference, "secular stagnation"?

Of particular interest is the section devoted to the "Asian Economic Breakthrough", a region of which Russia is a part. The list of advantages that have contributed to the economic success of a number of its countries includes such internal prerequisites as pro-market reforms, and external ones, for example, integration into international value creation systems, as well as the influx of foreign direct investment in the zero years (p.45).

The same institutional capacity mentioned earlier had a positive effect. India and China, which are different from the point of view of the state structure, taking advantage of the favorable world environment, showed the highest GDP growth rates in 2000-2014, overtaking the United States (see graph 13, p.47). The author's analysis of the reasons for this success highlights pragmatic liberal reforms (p. 51). But this path was beyond the power of a significant number of Jailed states, politely called failed. In the dynamic Asia-Pacific region, they indicate difficulties in implementing the policy of economic breakthrough. But even successful countries pay a high price for success, primarily by environmental degradation, especially in China and India (pp. 59-60). In terms of air pollution, the 20-million-strong capital of India ranked 1st in the world, and it is unlikely that its ecology will be improved by the order of the Delhi municipality to divide the flow of cars on even and odd days.

The author's conclusion is preceded by two epigraphs. The first - "Qui, ne se reforme pas, est mort" - equates the absence of reform with death. But countries, like people, have learned to survive with unresolved problems. The second is "If there

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is a will, there is a way " - optimistically believes that the presence of a goal implies a path (p. 66). But, as history shows, the goal and the way to achieve it often do not coincide. Modern economic development is "turbulent", as defined by V. Melyantsev (p. 66), occurs in different variants, does not always bring the expected results, rejects the usual (past) forms, implementing new trends. Import substitution, now a popular slogan of many governments, has little in common with what countries implemented in the early and mid-twentieth centuries. This is a natural result of qualitatively different external and internal conditions, reflected in the reviewed work.

The new technological order and the power of ICTs are changing the content of economic processes, even "imposing" themselves on countries that neglect them. In these conditions, it is difficult to expect sustainable development; rather, it is an exception that is possible in the short term. V. Melyantsev concludes his publication with the words about the reasonableness of conducting "a pro-market, pragmatic and rather active policy by a national state..." (p. 80). Everything is theoretically correct, but as a practical matter, it is difficult to implement.

As always, V. Melyantsev's work is rich in detailed factual material, well organized into graphs and tables. The extensive bibliographic database and detailed references to recent publications by Russian and foreign authors are noteworthy. I believe that this study should be recommended to students studying the problems of the modern world economy, as well as to a wide range of readers who want to understand the complex processes taking place in this area. But they concern everyone...

E. A. BRAGINA, Doctor of Economics, Primakov Institute of International Relations, Russian Academy of Sciences


1 The Economist. May 5, 2010. P. 73.

2 The Economist. Special Report. March 28, 2015. P. 4.

 


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