Global Factors: Global trade system High protectionism in agricultural sector - developing nations specialise in agricultural production and are affected by high tariffs Increase in regional trading blocs - trade liberation would lift 140 million out of poverty Failure of WTO’s Doha Round - developed countries refused to make concessions that would benefit developing countries, eg reduce tariffs Free trade agreements(FTA) not available for developing nations - substantial cost for implementing FTAs and lodge appeal making it unfair to developing nations Global financial architecture FDI heavily favours developed countries - worlds 48 least developed economies receive 202% of global inflow in 2016. FDI based in developed countries is safer and more accessible investment Short term financial inflows favour emerging economies - fast growing emerging economies offer better financial returns for speculators Loopholes in international financial rules - large flows of income and wealth ($32 trillion usd) to international havens such as Cayman Islands. Developing countries disadvantaged as potential tax revenue is diverted IMF’s structural adjustment policies only serve developed countries - changes required by austerity measures put developing countries in a worse off position Massive foreign debt burdens on developing countries - international debt statistics report estimates total external debt for low and middle income economies to be US$5.2 trillion. Theses debt payments are an opportunity cost on education, healthcare and infrastructure spending Global aid and assistance Development aid less than promised - difference between aid that was promised and actual aid is over $4 trillion Significant portion of debt is “phantom aid” and “tied aid” - phantom aid does not directly improve lives of the poor and includes technical cooperation and debt relief. Tied aid is spent on overprice or unnecessary goods and services provided by the donor country Aid often reflects strategic and military considerations - since 2002, almost half of its $178 billion increase in global aid from wealthy countries went to Iraq and Afghanistan, while much smaller shares went to developing countries Global technology flows “Digital divide” - new tech benefit developed over developing countries. Eg. 5G can be absorbed more quickly in economies with existing infrastructure yet practically useless in developing countries. The world economic forum observes that the internet remains unavailable to 3.7 Billion around the world(2020). Intellectual property rights preventing the movement of new technologies - TRIPS(the Agreement of Trade Related Aspects of Intellectual Property Rights) forces all countries to implement structural intellectual property systems that are detrimental to developing countries. The issue was highlighted in the Doha Round, where developed countries refused to give concessions to reduce IP rights. Domestic factors: Economic resources Natural resources - countries with cheap natural resource supplies have an advantage. Eg oil rich countries in middle east have higher economic growth than neighbours Labour supply and quality - lower income nations have lower quality labour force - high pop growth, poor education levels and low health standards reduce quality of labour. South african labour supply is affected by high rates of HIV/AIDS with ¼ individuals between 15-49 Access to capital and technology - difficult gaining access to capital → low income levels lead to reduced saving for investment. Poorly designed financial systems → make it difficult for firms to gain loans for investment. Limited innovation →lower government expenditure results in limited opportunity to research Entrepreneurial culture - limited entrepreneurial culture → values of individuals responsibility, enterprise, wealth creation and strong work ethic can assist the industrialisation process High levels of inequality - wide gap between most and least rich → world's richest 62 individuals hold the same amount of wealth as the bottom half of the entire global population. Highlights differences in living standards between economies Institutional factors Political and economic institutions - political instability, corruption and lack of law enforcement for low income nations → reduces investor confidence, corrupt govts divert money from citizens to their own pockets. Eg. zimbabwe $1 billion in diamond related tax revenue is unaccounted for in 2011 Economic policies - different economic methodologies will influence growth and development → no govt intervention results high eco growth but market failure and lower quality of life Government response to globalisation - government's response to globalisation - policies relating to trade, financial flows, investment, tncs and countries participation in regional and global economic organisation can influence a country's ability to take advantage of globalisation

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Economic development faces significant barriers that prevent billions from escaping poverty. These barriers operate across three interconnected dimensions. Global factors include unfair trade systems, biased financial architecture, and inadequate aid flows. Domestic factors involve resource constraints, labor quality issues, and limited access to capital. Institutional factors encompass political instability, corruption, and poor policy choices. The scale of global inequality is staggering - the world's richest 62 individuals hold the same wealth as the bottom half of humanity, highlighting the urgent need to address these development barriers systematically. The global trade system creates significant barriers for developing nations. Agricultural protectionism is particularly severe, with tariff rates reaching over fifty percent compared to single digits for manufactured goods. This disproportionately affects developing countries that specialize in agricultural production. The failure of the WTO's Doha Round exemplifies this problem - launched in 2001 to address development concerns, negotiations stalled in 2008 and were effectively abandoned by 2015 when developed countries refused to make meaningful concessions. Regional trading blocs often exclude developing nations, while Free Trade Agreements impose substantial implementation costs that many cannot afford. The World Bank estimates that comprehensive trade liberalization could lift 140 million people out of poverty, yet these barriers persist, maintaining global inequality. The global financial architecture systematically disadvantages developing countries through multiple mechanisms. Foreign Direct Investment flows heavily favor developed nations, with the world's 48 least developed economies receiving only 2 percent of global FDI inflows in 2016, while developed countries attract the majority due to perceived safety and accessibility. Short-term financial flows create dangerous volatility in emerging markets, as speculative capital seeks quick returns but can rapidly withdraw during crises. A massive 32 trillion dollars flows to international tax havens like the Cayman Islands, representing lost tax revenue that developing countries desperately need for public services. The IMF's structural adjustment policies often worsen conditions through austerity measures that cut social spending. Finally, the external debt burden is crushing - low and middle-income economies owe 5.2 trillion dollars, creating opportunity costs that prevent investment in education, healthcare, and infrastructure essential for development. Global aid and technology systems systematically fail developing countries through multiple failures. There is a massive 4 trillion dollar gap between promised and actual development aid, undermining trust and planning capacity. Much of the aid that is delivered consists of phantom aid, which includes technical cooperation and debt relief that doesn't directly improve lives, and tied aid that forces recipients to purchase overpriced goods from donor countries. Aid allocation reflects strategic and military considerations rather than development needs - since 2002, almost half of the 178 billion dollar increase in global aid went to Iraq and Afghanistan, while much smaller shares reached the world's poorest countries. The digital divide further entrenches inequality, with 3.7 billion people lacking internet access as of 2020, preventing them from benefiting from technological advances. Finally, the TRIPS agreement on intellectual property rights prevents the transfer of new technologies to developing countries, forcing them to pay high prices for essential medicines and technologies that could accelerate their development. Domestic resource constraints create significant internal barriers to development. Natural resource endowments provide clear advantages - oil-rich Middle Eastern countries like Saudi Arabia and the UAE consistently outperform resource-poor neighbors like Jordan and Yemen in economic growth. Labor supply and quality present major challenges for developing nations. High population growth, poor education levels, and low health standards reduce labor force quality. South Africa exemplifies this problem, where HIV/AIDS affects one quarter of individuals between ages 15 and 49, severely impacting productivity. Access to capital remains limited due to low income levels leading to reduced savings for investment, while poorly designed financial systems make it difficult for firms to obtain loans. Limited government expenditure restricts research and innovation capacity. Entrepreneurial culture varies significantly between countries - values of individual responsibility, enterprise, wealth creation, and strong work ethic can assist the industrialization process, but these are often weak in developing economies. Finally, high levels of inequality create additional barriers, with the world's richest 62 individuals holding the same wealth as the bottom half of the entire global population, highlighting the vast differences in living standards and opportunities between economies.