As the global market expands, our economic health becomes increasingly intertwined with the success of developing nations. As a leader in the market, the U.S. is an influential indicator of global stability. Unfortunately, this can also translate to global hardship in times of recession. As third world countries continue to develop, the overall market stabilizes and provides additional areas of growth as individual markets struggle. But what are third world countries?
This article discusses exactly what are third world countries, listed by highest GDP per capita to lowest, and the potential impact on the U.S. global market and local investors.
What Are Third World Countries? & Their Importance
Defining exactly what are third world countries in our modern age is somewhat difficult. This term was created in the post-Cold War era. Countries of the “Third World” were described as states that were not allied with the U.S. or the old Soviet Union. Countries of the “First World” described democratic nations allied with the United States while “Second World” referred to communist countries allied to the Soviet Union.
Today, defining what are third world countries stems from a different school of thought. The official definition ranges, but it’s widely agreed that modern-day third world countries struggle with governmental or social unrest and have stagnant industrial markets. Citizens in these countries are generally impoverished and uneducated.
While most of these nations are dependent on first world countries, they are also essential for global growth. For example, half of U.S. exports, such as machinery, aircraft, and human resources, now go to developing countries. As these countries develop, so does their demand for exported goods and American investments.
7 Third World Countries Tied to Our Development
Although Yemen’s gross domestic product (GDP) is the highest on this list, specialists estimate that almost half the population is malnourished. As a major exporter of crude and refined petroleum, and raw goods, such as wheat, fish, and rice, Yemen holds the potential to become a major investment opportunity. Unfortunately, Yemen’s chaotic political climate, terrorism presence, and lack of basic human resources, currently prevents lucrative development.
Struggles with extremist rebel forces and democratic instability have played a part in preventing this vibrant nation’s economic growth. With continued aid, Mali has the potential to play a major role in the energy market. Although China is the country’s main exporting partner, American trade continues to grow with their qualification of the AGOA, African Growth, and Opportunity Act. As Mali industrializes, current import demand for U.S. vehicles, pharmaceuticals, and machinery will grow.
Ethiopia is an agricultural country. Droughts, disease, and constantly changing regimes are always affecting it. As an exporter of primarily coffee and spices, Ethiopia’s major potential is with its need for imports. Underdevelopment is Ethiopia’s greatest enemy. As Ethiopia continues to fight its humanitarian crisis, its infrastructure will grow, as will its demand for current U.S. goods, such as aircraft, machinery, and electrical machinery.
When someone asks, What are third world countries? Haiti is usually the first to be described. This third world country is a major priority for U.S. relations. Haiti’s troubles stem from a lack of education and unstable government structure. If the authorities could resolve these issues, Haiti would become a very viable resource for local trade.
In Haiti’s current economic climate, the U.S. purchases nearly 70% of their exports, including coffee, cocoa, and mangoes.
As Haiti develops, American companies, such as banks, manufacturing plants, and pharmaceuticals, will be able to expand into their region. Despite this, the textile industry holds the most potential, due to cheap labor costs and the extension of the HOPE II program.
Experts believe that Afghanistan is a gold mine for natural resources, such as petroleum, natural gas, and metals. Unfortunately, due to militant regimes, poor infrastructure, and changing political climates, Afghanistan is struggling to develop and currently imports more than it exports. The U.S. continues to assist this impoverished nation with the implementation of trade agreements such as the Trade and Investment Framework Agreement (TIFA). With the continued help of global investors and stabilization of the political climate, Afghanistan could be a very rich nation that could change the global market.
An island located on the southeast coast of Africa, Madagascar is a beautiful nation with a majority impoverished population. Despite the rich climate, poor infrastructure, political turmoil, and geographical limitations are primary causes for this nation’s poor development.
Madagascar remains a potentially lucrative trade partner for aircraft and machinery. Although governments have implemented trade agreements such as AGOA to stimulate global trade, renewed political division and instability has prevented the nation from further development.
Liberia is the poorest nation on the list, scraping by at a startling $882 GDP per capita. Despite this, Liberia’s potential to be a lucrative partner in the global market is clear. With advanced infrastructure and a stable government, Liberia could become a major exporter of iron ore and rubber.
Since Liberia lacks major farming systems and houses several orphans with little or no education, Liberia’s development also represents possible growth in several sectors of the market, such as machinery, vehicles, and human resources.
Moving forward, we shouldn’t simply ask, What are third world countries? but, What are third world countries and how can we help them develop?
Each of these countries struggles with unique challenges, such as political instability, geographic limitations, and poor humanitarian conditions. What we must do is to discover these challenges and implement ways to overcome them. This is the key to their economic growth. Their development represents more than the growth of the populace or the advancement of society; it also represents the growth of our global community. As an active member of the global community, share this article to spread the awareness of the potential for our market.