The growth rate of developing countries will, over time, continues to lag behind the developed, increasing the difference in income and living standards, wrote in a column for Forbes Russian co-owner Alfa Group, billionaire Mikhail Fridman.
He noted that in recent decades, global economic development “largely determined” by the globalization and “development of economic cooperation between developed and developing countries”. Second, said the billionaire, has exported in the first raw material resources and cheap labor, and profit is invested in the creation of “physical infrastructure” as rapidly as roads, airports, logistic centres and cities.
Less important priority for countries in the “institutional development”, in particular independent and stable legal system, an effective competitive environment, he said. According to Friedman, this development is substituted “Directive, which provides point care about foreign investors”. As an example, a country billionaire has led the Chinese government started to solve the problem of weak institutions even more centralization, repression”.
According to Friedman, “repetition “Chinese economic miracle” of recent decades” in the near future will not. This conclusion can be extended to the economies of all developing countries, with the exception of India, says the businessman. The growth of the economies of developing countries will slow down due to diminishing profits from the export of raw materials and, consequently, reduced incomes, said the billionaire. Funding sources for the development of public institutions “is quite a bit”, he warns.
Therefore, the growth rate of developing countries will continue to lag behind developed, thereby increasing the already significant difference in income and standard of living,” said Friedman.
Globalization, according to the billionaire, who previously “seemed to be the driver of reduction of lag of developing countries from their Western neighbors” turned out to be a cyclic process. In the near future it could become “a factor of growing inequality, as it will be used primarily as a sales channel products of the economy of Indigo in other countries that do not have their own capabilities to offer competitive products of comparable price and quality,” he said.
In contrast to economies such Friedman introduces the concept of “Indigo economy” and “the era of Indigo”, referring to the concept of “Indigo children”, which, as stated in the following quote billionaire, “according to a pseudoscientific concept” possess special, unusual and sometimes supernatural characteristics and abilities.” According to Friedman, “the era of Indigo marks the transition “to the dustbin of history” hypothesis “about the imminent depletion of any natural resources”, which “will significantly slow down economic development.
“The main source of national wealth gradually, but inevitably will become public infrastructure, creating a fertile environment for the realization of the potential key element of social development — creative and intellectual abilities of each person,” said Friedman. However, he cited the example of the change of leader in the ranking of the largest by market capitalisation of global corporations: the oil company Exxon Mobil has overtaken “created by the creative genius of outstanding individuals Apple and Google”.
“Short-term economic successes of authoritarian and even totalitarian regimes still sometimes tempt companies longing for a strong hand and are willing to sacrifice the rights of its own citizens for the sake of economic achievements,” wrote Friedman, summing up.
However, he expressed the hope that “the era in which we are rushing at full speed, will put a final end to this dangerous error.” In his opinion, “the economy of Indigo is an economy of free people”. “So, the world is inevitable, though painful, will become freer. In this I believe,” said the billionaire.