Impact of the recession?

How to you define a size of a business?

  By the revenue, capital  and the workforce

  Technology reinvestment and expansion also reflect the size of the firm

Categories of Economic and business activities

Above mentioned are the basic economic activities in the economy.  Mainly the primary activities are more common in the developing countries.  This does not mean that developed countries do not have these activities but the dependency is very much lower.  If you consider a developing country, most of the times it should be more relying\depending on the Primary activities.   This is not the case when it comes to developed countries where they mainly depend on the secondary and tertiary activities, which generate more revenue and income to the country. 

Recession Vs Developed countries

As mentioned above most of the developed countries depend on secondary and tertiary activities which are mainly focusing on adding values to the customers.  If a financial company was bankrupted that will create a huge impact on the total economy as the dependency is high.  This is exactly what happened to America where all these problems started.  There were severe issues related to banks and that led to collapse some financial companies.  It created a huge impact not only on the US economy but also in the world economy.  

Recession Vs Developing Countries 

I would say the immediate impact of the recession is lower in developing countries.  Developing world mainly depends on primary economic activities and therefore it mainly deals with the producer and the nature.  If you take a traditional farmer, this recession did not make any problem for him.  The fact is that people do these primary economic activities not just to sell but to consume as well.  Therefore the impact is very much less compared to the developed country.  In addition their life styles are not directly aligned with financial aspects as banking, insurance.  Basically what they do it produce, consume and just selling the excess.  

How does recession impact on developing counties then?

As I mentioned above the immediate affect is very much less.  Lets say a bank is collapsed, most of the producers will not experience the immediate effect as the dependency is less.

However there is another fact in the developing world countries.  All most all the essential goods and services are subsidized by the government.  It is a fact that the traditional farmer does not experience the immediate effect of this global economic crisis because there is no direct dependency.  Its just a relationship between the effort put in the land.  However we should not forget that the fertilizers that are bought by the famer, the fuel that is pumped to transport their excess, are highly subsidized by the government.  Usually fertilizer, fuel and other essential food items are imported and coming from the global market where we have this entire economic crisis.  Therefore price fluctuations and all other problems are associated.   The reason why the farmer does not experience that is because the government absorbs that and maintains the stability of the price.  This strategy burns the economy of the country and therefore the government might have to go for additional funding which are mainly the loans or simply printing money.  This works only in the short run and as you can notice developing countries are experiencing just the gloom of the storm.

What should developing countries do?

Its time for you to comment on this.  What do you really think about this?