DIVERSIFICATION: ANSWER TO SUSTAINABLE ECONOMIC GROWTH IN DEVELOPING COUNTRIES

Economic growth in Developing countries (Resource-rich) continues to hinge on the overwhelming emphasis on the generation of national GDP from the exportation of goods from the extractive industry and agriculture (Oil, minerals and farming produce).  In Developed countries 98% of the labor is engaged in the Tertiary and Secondary Sectors combined and the remainder 2% is engaged in agriculture, conversely in developing countries, between 50-75% of the population is engaged mostly in agriculture and the extractive Industry, while a much smaller percentage could be found in the Secondary (manufacturing) and Tertiary Sectors. Paradoxically despite the abundance of natural resources, excellent and fantastic topography, fine climatic and weather systems, fertile lands and rich biodiversity, the poorest people on earth today can be located in developing countries. On balance, globalization has helped make the world an increasingly interdependent place and has presented several opportunities globally, yet those countries with a highly educated and skilled labor force have been the beneficiaries of globalization.

Based on sectoral analysis of statistical data on GDP in the economies of Developing countries, Emerging economies and Developed Countries, it is logical to conclude that there is a correlation existing between the sectoral distribution pattern (of labor/GDP and overall GDP creation) in the economy where a slimmer labor force/smaller GDP in the Primary sector with progression from the Secondary to the Tertiary sector resulted in a phenomenal cumulative GDP per nation (Botchwey, 2014).

The implications of this finding and others before it, ultimately call for Developing countries (Resource-rich countries) to embrace a proactive industrialization drive, economic efficiency, Export and Economic diversification platforms, openness to globalization and an end to the skewed sectoral distribution pattern of labor, GDP generation and commodities (inputs in the production of other goods) in the Primary Sector, an end to the “resource curse”, the endemic vicious cycle facing most developing countries in a corruption free environment. Further, the recent success stories of research and case studies on Chile, Indonesia and Malaysia (Revenuewatch, 2013) attests to the viability of the diversification process in resource-rich countries. In an increasingly dynamic and sophisticated World, the World cannot do without globalization and so do Developing countries.

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