Global Capital Mobilization, Research Paper Example

World Bank is active in several countries with the aim to reduce poverty and introduce economic prosperity in areas that have been long ignored. These include recently approved 40 years term $300 million loan to Indonesia for increasing power generation from renewable geothermal resources (World Bank) and 40 years term $30 million loan to Kyrgyz Republic to improve governance, facilitate economic recovery, and protect social expenditures (World Bank). The trade between the United States and African countries has more than doubled in the last decade due to the passage of The African Growth and Opportunity Act (AGOA) by the U.S. government in 2000 (Organization for Economic Cooperation and Development, 2011).

Asian economic powers like Japan are also playing an active role in the economic development of developing countries. Japanese International Co-operation Agency (JICA) assisted with the development of Africa’s first mobile phone company named MTech in Zambia (Organization for Economic Cooperation and Development, 2011). 75% of all American investment in Africa comes from the oil companies and the country is still the largest investor in Africa. Similarly, China is also becoming a major player as reflected by China Exim Bank’s $13.1 billion guaranteed loans to Chinese companies in 2008 for investing in Africa (Wiliams, 2010).

Less developed countries are characterized by poor infrastructure, low per capita income, and low GDP. Examples include Mongolia and Burma. Emerging economies may also have many of these characteristics but what differentiates them from less developed countries are reforms and high economic growth rates which are an indication of their progress towards more developed economies. Emerging economies are attractive targets for foreign investments because they have taken steps to reduce investment risk and are also enjoying growing middle class. Examples include BRIC countries, Vietnam, and South Africa.

References

Organization for Economic Cooperation and Development. (2011, April 6). Economic Diversification in Africa: A review of selected countries. Retrieved October 29, 2011, from http://www.oecd.org/dataoecd/10/61/46148761.pdf

Wiliams, T. (2010, August 02). U.S. Policy Should Spur Private Investment in Africa. Retrieved October 29, 2011, from http://www.globalatlanta.com/article/24118/

World Bank. (n.d.). Indonesia – The Geothermal Clean Energy Investment Project . Retrieved October 29, 2011, from http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/0,,contentMDK:22970117~pagePK:41367~piPK:279616~theSitePK:40941,00.html

World Bank. (n.d.). Kyrgyz Republic – Economic Recovery Support Operation. Retrieved October 29, 2011, from http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/0,,contentMDK:22974545~pagePK:41367~piPK:279616~theSitePK:40941,00.html