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By FERNANDO NOGUEIRA DA COSTA*

Development strategies for emerging countries with large populations

There is a group of five countries with a workforce of over 100 million people in 2022: China (782 million), India (554 million), the United States (169 million), Indonesia (138 million) and Brazil (109 million). These numbers, roughly speaking, correspond to just over half of the total population and 2/3 of the adult population.

The workforce comprises people aged 15 or over capable of providing labor for the production of goods and services during a specific period. It includes people who are currently employed and people who are unemployed but looking for work, as well as people looking for their first job.

Not everyone working is included in this workforce. Unpaid workers, family workers and students are omitted. Some countries do not count members of the Armed Forces. The size of the workforce tends to vary throughout the year as seasonal workers come and go.

These emerging countries, except the United States with mature capitalism, generally adopt development strategies taking into account their large populations and the need to generate employment and sustained economic growth. These countries often use a combination of industrial, agricultural, technological, educational and social policies to drive development.

They adopt industrialization and economic diversification as development strategies. They invest in heavy (such as steel and automotive) and light (such as textiles and electronics) industrial sectors. Among them, there are differences in the promotion of high technology and innovation sectors, such as Information technology, biotechnology and telecommunications.

Depending on natural resources, some adopt intensive agriculture with the implementation of modern agricultural techniques, including mechanization, use of fertilizers and genetic improvement of crops. They add incentives to promote agricultural products for export, contributing to economic diversification.

Not everyone has the same investment in transportation and energy infrastructure with construction and modernization of highways, railways, ports, airports and energy infrastructure to support economic growth. Likewise, there are those lagging behind in the development of urban infrastructure to improve living conditions in cities, including sanitation, public transport and housing.

A common development strategy is the establishment of Special Economic Zones (SEZs) to attract Foreign Direct Investments (FDI) with tax and regulatory incentives. It requires simplifying bureaucratic processes and improving the business environment to attract foreign capital.

The development of human capital is also very different with Brazil's glaring delay in education and training. Its investment in basic, technical and higher education is still not enough to create a qualified workforce. Need professional training and requalification programs to meet the needs of different economic sectors

Evidently, there is an advantage of late capitalism “skipping stages”, going straight to the adoption of cutting-edge technology from transnational companies. But there is the disadvantage of the much greater effort required to educate the majority of a gigantic adult population with quality higher education. It is a necessary condition for the absorption of technology, if it is made possible by the requirement for its transfer for exploitation in the large domestic market.

In all countries, social inclusion policies are necessary to reduce poverty. But anti-poverty and income transfer programs should not create the illusion that they also reduce social inequality in a substantive way.

Investments in public health, social security and basic services to improve quality of life or social well-being are priorities.

Macroeconomic stability is obtained with balanced management through fiscal, monetary, exchange rate and capital control policies to regulate aggregate demand, promote the growth of aggregate supply (productive capacity) and control inflation.

Maintaining a stable political environment ensures investor confidence and the continuity of development policies. Ideological polarization with attempted coups only keeps foreign investors away due to the risk of contracts.

Among the common geographic characteristics of these countries are their large territorial extensions, allowing the exploitation of varied natural resources and climatic and geographic diversity. They have the availability of abundant natural resources such as minerals, oil, natural gas and fertile agricultural land.

Regarding demographic characteristics, the presence of a young and growing population provides an abundant and potentially dynamic workforce. But everyone suffers the threat of population aging and even absolute population decline.

The high rate of urbanization with large urban centers acts as a driver of economic growth. However, it causes pollution and congestion problems that are difficult to solve.

In general, these countries with large populations have diversified economies with the presence of all sectors: primary, secondary and tertiary. Its large domestic markets support growth in production and consumption.

The most significant challenges occur in terms of social inclusion and reduction of inequalities, with the need for public policies focused on the problem, after the maximum reduction of poverty. Increasing opportunities for social mobility can be achieved through improvements in education and living conditions.

All need complex governance systems to deal with regional diversity and the problems of managing large populations. It exacerbates the difficulty of combining planning and the free market with the growing emphasis on sustainable development policies to balance economic growth with environmental preservation.

Highlighting the United States from this group, a country with mature capitalism, the others are distinguished in the following way.

China prioritized massive industrialization, heavy investment in infrastructure, the promotion of technological innovation and poverty reduction policies. It has an extensive network of Special Economic Zones and a vast domestic market.

India has placed a focus on agricultural modernization, industrial development, infrastructure investment and a growing information technology sector. Social inclusion policies and income transfer programs also stood out.

Indonesia is still pursuing infrastructure development, economic diversification, promoting foreign investment and social inclusion programs to reduce poverty and improve education.

Brazil, despite facing economic problems due to political polarization and instability, invests in infrastructure, agricultural modernization, industrialization in some areas that are lacking and dependent on foreign technology, such as the pharmaceutical industry. Social policies to improve the quality of life of the poorest received priority in the social-developmental era (2003-2014). They are being resumed.

Countries with a workforce of over 100 million people adopt development strategies through industrialization, modernization of agriculture, investments in infrastructure, attraction of foreign investment, development of human capital and social inclusion policies.

These countries share geographic, demographic, economic, social and political characteristics that are influential in their development approaches, taking advantage of their large populations, abundant natural resources and extensive domestic markets to drive sustainable economic growth and improve the quality of life of their populations.

*Fernando Nogueira da Costa He is a full professor at the Institute of Economics at Unicamp. Author, among other books, of Brazil of banks (EDUSP). [https://amzn.to/3r9xVNh]


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