The impact of the Global Economic Crisis on Developing States Essay

The impact of the Global Economic Crisis on Developing States - Essay Example This paper tries to evaluate the overall effects of the global financial crisis on developing countries. It analyzes the economic situations during the crisis in major developing states in Asia, Africa, Latin America, and Eastern Europe. Extraordinary financing, massive flow of remittance in developing states, and high commodity costs were the fundamental components of the economic boom in the developing countries between 2003 and 2007. The global financial crisis (GFC) initially trembled the banking systems in North America and Europe. The first developing states to face the crisis were those which had its majority of financial sectors linked with the global market. Next, it caused impact on domestic and international trade as prices and volumes of manufacturing and commodities felled across the world. Low workers like, street vendors, garbage pickers along with blue-collar workers affected mostly due to job-and pay-cuts. As remittances from migrant workers from the North America and Europe hit badly, large population in developing and poor states, which were highly dependent on it, was significantly affected. Due to the global financial crisis of 2007, developing and emerging economies in all over the world faced a drastic drop in output growth. The aggregate GDP growth decline in the newly industrialized and emerging Asian economies such as, Singapore (17.9%), Hong Kong (10.9%), Malaysia (9.9%), and Korea (9.2%) was larger compare to that in the developing economies of Central and Eastern Europe such as Russia (14%), Turkey (9.6%), Poland (7.3%), and Hungary (4.3%). Among the Asian countries, Singapore had the greatest GDP growth decline followed by Hong Kong and Malaysia.