Poles of the Global Economy
Three major poles, North America, Western Europe and East Asia, dominate the global economy. Each of these poles has a non-exclusive sphere of influence, which is reflected in passengers and freight flows. For North America, this involves Latin American nations, closely linked to the American economy. Africa, Eastern Europe and Russia (with many of the former Soviet Republics) are within the sphere of influence of Western Europe. JAKOTA (Japan, Korean and Taiwan) represents the main pole of Pacific Asia, including China and the other newly industrializing economies of the region (Singapore, Malaysia, Thailand). Several regions, such as Oceania, South Asia and the Middle East are not within a specific area of influence, but contribute significantly to global trade (petroleum for the Middle East, minerals and food for Australia).
It is possible to classify nations according to their levels of development and the role the play in the global economy. One such classification was proposed by the United Nations and divides economies in five major classes:
  • Underdeveloped. Characterized by low levels of income, industrialization and literacy. They are the least involved in the global economy with exports dominated by raw materials.
  • Developing. Characterized by a very heterogeneous group of nations that have seen various levels of improvements in the welfare of their populations. They include former socialist economies (Russia and Eastern Europe), North African and many Latin American countries.
  • Newly industrializing. Characterized by fast processes of industrialization and integration to the global economy where manufacturing goods account for more than 25% of the GDP and more than 50% of exports. There are however strong disparities within this group as Latin American (Mexico, Brazil and Argentina) growth is little compared with the growth taking place in East and Southeast Asia, especially China.
  • Advanced. Characterized by a high level of economic development. These nations are at the forefront of the global economy.
  • Rent. Countries that derive the majority of their incomes from oil exports are labeled as rent economies, such as Saudi Arabia. Incomes are artificially high and subject to the fluctuations of oil prices. Several nations such as Algeria, Nigeria, Venezuela and Iraq are significant oil exporters, but they have a more diversified economy.
The continent-sized countries of India and China are special categories on their own. They have low incomes but the last decade, especially for China, has brought significant economic opportunities. Economic growth is accompanied by strong growth of raw materials, products and services and their related global flows.