The developing countries of Central and South America, Africa,
and Asia once merely exported raw materials and cash crops in return for
manufactured goods. People in these countries provided for most of their own
needs through subsistence agriculture and small-scale crafts. In time, though,
people in these countries grew increasingly dependent on the global economy,
because local crafts could not compete with the cheap, factory-made exports of
the developed countries, such as European nations, the United States, and Japan.
To decrease their dependence, many developing countries sought to strengthen
their economies by building factories, modern dams, and roads during the 1960s
and 1970s: Governments frequently made poor financial choices. However,
infrastructure projects such as dams and highways were often too massive for
local needs. Choices about industry were sometimes not based on the best
interests of the country, and protection from competition frequently resulted in
inferior goods. As a result, products could not compete on the global market
with the higher-quality goods from the industrialized countries. Many developing
countries then had little income to pay off debts incurred (招致) during their
expansion. A few developing economies succeeded in building
prosperity through industrialization during the 20th century. The most notable
of these were South Korea, Singapore, and Hong Kong S. A. R. Like Japan during
the 19th century, they established tariffs and other barriers to protect local
products from foreign competition and invested local wealth in industrial
development. Also like Japan, they focused on selling the products they
manufactured to foreign consumers in order to bring wealth into the country. By
the end of the 20th century some experts considered these economies to be
developed, rather than developing, although many of South Korea’s economic
successes were reversed in the financial crisis of 1997. Following a similar
path, China advanced economically through a rapid expansion of manufactured
exports during the late 20th century. Meanwhile, multinationals
based in the economically developed world set up low-wage manufacturing
facilities in some developing countries, particularly in Southeast Asia and in
Central and South America. These factories typically generated few long-term
benefits for the local economy. The profits flowed outside the country to the
shareholders of the foreign multinationals. Also, the developing countries were
forced to participate in a "race to the bottom" to attract multinational
investment. If a developing country or its people taught higher wages or
enforced labor or environmental protections, multinationals often simply
relocated production to a country with lower costs. What is the meaning of "race to the bottom" (Line 5, Para. 3)