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I. The positive impacts of globalization and regionalization on developing countries
Enhancing the comparative advantage of developing countries for growth
Obvious and favorable opportunities to move forward are created for developing countries by globalization and regionalization. One of those favorable opportunities is that the developing countries will make full use of their comparative advantage when taking part in all fields of international economic cooperation, provided that they actively integrate into the world in a flexible and creative way. In the process of globalization and regionalization, developing countries tend to be divided into groups with corresponding comparative advantages that can supplement one another in the course of cooperation and development. Comparative advantage is changeable and depends on each country's development level. The least-developed countries have the lowest level of comparative advantage. Developing countries only have low-level comparative advantages such as a cheap labor force, natural resources, and markets. This is a great challenge that developing countries face.
Nevertheless, globalization creates great and new opportunities for developing countries so long as they creatively apply and carry out a guided form of development. They can, for example, make use of their existing advantage in natural resources, labor, markets, light-manufacturing industries, tourism, and service industries. They can take part in the lower and medium levels of the global economic structure. In that economic structure, some industries demand great amounts of labor and raw material, but a lesser amount of investment, but medium-level and advanced technologies to produce indispensable commodities and services in the global market. As the result, developing countries have the opportunity to acquire international capital, new techniques and technologies, and advanced management models. Every developing country has this opportunity, but only countries that know how to seize it can benefit. The ability to do so depends on the subjective factor, the internal forces in each country.
Optimizing developing countries' comparative advantage in the process of globalization and regionalization targets the use of trade liberalization and attractraction of investment for the sake of economic growth and social development. The proportion of trade in the gross domestic product of developing countries has been increasing steadily (23 percent in 1985 and 30 percent in 1997). Developing countries have increasingly carried out policies of diversification and multilateralization in their international economic...