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In his terminology, the core is the developed, industrialized part of the world, and the periphery is the "underdeveloped", typically raw materials-exporting, poor part of the world; the market being the means by which the core exploits the periphery. Apart from them, Wallerstein defines four temporal features of the world system.
Developed countries usually import a substantial amount of raw materials from developing countries. Typically, these imported materials are transformed into finished products and might be exported after adding value. Financial trade balance statistics conceal material flow.
Periphery countries are known for exporting raw goods to core countries. What tends to happen is the maximum gain a periphery nation could earn is less than needed to maintain an equilibrium between costs and revenues .
This began an economic system in the Americas, Africa, and Asia to then export the natural materials from their land to Europe. After shipping the materials to Europe, Britain and the other European countries made products with these materials and then sent them back to colonized parts of the Americas, Africa, and Asia.
Trade in goods and services can serve as a substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example of this is the import of labor-intensive goods by the United States from China. Instead of importing ...
Foreign industries also contribute to resource exploitation, where raw materials are outsourced from developing countries, with the local communities receiving little profit from the exchange. This is often accompanied by negative effects of economic growth around the affected areas such as inequality and pollution [ 3 ]
The new leading powers are mostly non-European (United States, Canada, Japan). Outside of these developed countries are countries (see list below) that are considered semi-periphery and are both dominant and dominated within economic, political, and social realms. [12]
The primary sector of the economy includes any industry involved in the extraction and production of raw materials, such as farming, logging, fishing, forestry and mining. [ 1 ] [ 2 ] [ 3 ] The primary sector tends to make up a larger portion of the economy in developing countries than it does in developed countries .