The principle of comparative advantage state that countries should specialize in producing goods that they are efficient in making (Carbaugh, 2015). Having natural recourses like Saudi Arabia can support your economy and gain you an absolute advantage since cost of exporting Saudi’s natural resource (oil) is low. Such natural recourses helped Saudi to be in the G20 which is a forum of 20 major economies in the world. In the list of the G20 we find South Korea, where it got its economy to be up with top economies in the world without depending on natural recourses.
South Korea is supporting its economy by exporting goods such ships, automobile and armaments. The secret of South Korea strong economy is the investment in its well-educated and discipline people (Chulchung, 2015). Moreover, major investments were in research ; development programs. The combination of well-educated workforce and advanced technology made South Korea gain a comparative advantage and be cost efficient in industries such as shipbuilding ; automobile. Therefore, South Korea became one of leading economies in the world. South Korea is a beautiful example of how to gain a comparative advantage without the need of natural recourses.
Saudi Arabia Oil ; Gas Report. (2015). Business Monitor International.
Carbaugh, R. J. (2015). International Economics (15th ed.). Mason, OH: South-Western, Cengage Learning. ISBN 13: 9781285854359
KILIÇ, C., BALAN, F., ; KURT, Ü. (2015). An Empirical Investigation of Factors Affecting the Trade Balance of G-20 Countries. International Journal Of Economic Perspectives, 9(2), 49-56.
Chulchung, S. (2015, February 23). Lessons to be learned from South Korea’s stellar rise. Retrieved from Europesworld, http://europesworld.org/
South Korea: Finding its place on the world stage. (2010, April ). Retrieved from McKinsey&Company, http://www.mckinsey.com
Ahmad, N., & Kalim, R. (2013). Changing revealed comparative advantage of textile and clothing sector of Pakistan: Pre and post quota analysis. Pakistan Journal of Commerce and Social Sciences, 7(3), 520-521.