WTO, OECD and Developing Countries - Case Study Example

WTO, OECD and Developing Countries Name: Date: Institution: WTO, OECD and Developing Countries Introduction The World Trade Organization, commonly referred to as WTO, is the sole global international organization that deals with the rules of trade among nations. The main goal of the organization is to assist the producer of goods and services, importers and exporters to conduct their business with ease [Wor14]. The Organization for Economic Cooperation and Development also known as OECD refers to a group of 30 member countries that develops and discusses social and economic policy [Sta14]. These specific countries are the democratic countries that support a free market economy. Some of these countries include; Norway, Australia, United States, United Kingdom among others [Sta14]. We are going to analyse and determine whether these two bodies help or hinder economic developing countries. Most developing countries are associated with Democratic deficit. Democratic deficit refers to a situation where it is believed that there is lack of democratic control and accountability over the process of decision making [Tay06]. Because of this, organizations such as World Trade Organization and Organization for Economic Cooperation and Development have taken it upon themselves to try and streamline such situations in developing countries. Impact of World Trade Organization on Developing Countries In order to determine whether World Trade Organization has helped or hindered economic developing countries, we will discuss its association with developing countries so as to determine whether the institution has had a positive or negative impact on their economies. The World Trade Organizations believes that more open trade has the ability to boost economic growth and also help countries develop thus stating that commerce and development go hand in hand [Wor141]. The latest statistics from the World Trade Organization show that 66.6 %of its members are developing countries [Wor141]. This means from a total of 150 members in the World Trade Organization, 100 of them are developing countries. This is a very significant number and because of this, the developing countries are able to benefit and play an active and important role because of their numbers in the organization since they are continuing to play a significant role in the global economy. Because of World Trade Organization, the developing countries have now perceived trade as a crucial tool for their economic development efforts. To encourage more developing countries to enrol in the organization, special provisions have been put up that favour most of the developing countries [Wor142]. One of such provision is that developed countries are to treat the developing countries favourably compared to the WTO members and the other provision is that the specific governments are given certain subsidies one that the other members do not enjoy. The world trade organization has been able to provide ready market for most of the goods produced from the developing. Most of the developing countries are agricultural producers and produce goods such as Tea, Coffee, Sugarcane, Flowers and rice [Kat04]. So as to ensure that what the countries have produced do not go to waste, the World Trade Organization has linked various developing countries with developed countries that need the good and this has resulted to a faster and efficient among countries [Ode06]. This has saved the governments of the developing countries, the hustle of searching for their produced goods which at times leads to corruption and exploitative trade deals that see the developing countries lose. This has also eliminated the greedy and corrupt middlemen from the developing countries. The WTO aids trade in that they bring donors, recipient governments, development agencies and the private sector together, something that was not happening before [Mar13]. This form of dialogue among all these stakeholders has had the improvement and efficiency in trade thus eliminating democratic deficit. It is important to note that both the donor and recipient countries positive response has led to a commitment of about 40 billion dollars annually to the trade development programmes thus the recipient countries which are mostly developing countries have had significant success [Wor143]. To improve communication further, the World Trade Organization has set up reference centres in over one hundred trade ministries and the regional organizations in the capitals of developing countries and the least developed countries. The organization has gone further and provided computers and internet success in these countries so as enable the ministry officials to be abreast with the progress in Geneva through online access of the WTO’s huge database [Wor143]. Such efforts by the World Trade Organization has seen most of the developing countries benefit immensely from this trade. Some of the benefits from this trade include; Foreign exchange, receive goods of superior trade, benefit from international techno how and tenders [Kat04]. This in turn boosts the economy of the developing countries. Citizens in developing countries will now be able to experience improved standards of living, and increase in employment. It can therefore be stated that the World Trade Organization has helped most the developing countries grow economically. OECD and Developing countries The fight against corruption should not be for the developed countries and neither can the recipe that have worked in developed countries, work in the developing countries [OEC14]. Recently, over 134 countries attended “the 9th International Anti-Corruption Conference” that was organised by Transparency international. Over 100 of the countries present were the developing countries thus showing the desire that these countries have towards combating corruption [OEC14]. This echoes the initiatives such as those facilitated by the OECD for example the OECD convention. In most developing countries, corruption is widespread and is now part of the everyday life. The societies have learnt to live with corruption and what’s worse is that individuals perceive it as an integral part of their society and culture which should not be the case in the present world. A study conducted by the UN Development programme and the OECD Development centre showed that so as to understand corruption, institutional analysis isn’t enough but rather an economic and political analysis is crucial too [OEC14]. OECD has taken upon itself to fight such vices in the developing countries so as to ensure that the society is enlightened about the negative impact corruption has on the economy. To achieve this, the OECD have made efforts to ensure that they support anti-corruption strategies in the developing countries, align themselves with the specific country led initiatives and endorsing or supporting local ownership of the anti-corruption reform in the country [Org00]. These initiatives go a long way in ensuring thorough institutional, economic and political reforms in the developing nations and this has a long run effect of boosting the economic performance in developing countries. Once the culture towards corruption is changed then new generation of young individuals is likely to be a corruption free generation just like those in developed countries [OEC13]. The second way in which the OECD has impacted the developing countries is by pushing for reforms in the developing countries. The OECD aims at improving the economies of the developing countries through trade and investment policy [OEC08]. To achieve this, the OECD uses sequencing and timing since a gradual approach allows the institutions, industries and the government bodies enough time to adjust however, a more radical approach is advised in some cases. These efforts are aimed at ensuring that the countries participate in regional and international trade so as to benefit from them maximally [OEC08]. The OECD countries do have an initiative to aid developing countries so to ensure that the economies in the developing countries run smoothly. The OECD channel these aids into various projects in developing countries which do have a multiplier effect on the economy. Most of these countries such as United States, Australia and United Kingdom tend to channel these funds to the crucial sectors of the economy such as Health Sectors, Education, Agriculture and Security [OEC13]. All these are done as an attempt to streamline the economy and ensure that the economy gets back to its feet [OEC14]. Such funds are donated to various countries, so as to stimulate the economic rates. It is important to note that before a country is granted donations, there is thorough analysis carried out by the donor country so as to ensure that there exist proper institutions of anti-corruption that will prevent the embezzlements. In the recent past most of the developing would perceive “free” funds and thus most of the leaders in the respective developing countries would misuse the funds [OEC14]. However, thanks to OECD, such actions and incidences have significantly reduced. Despite WTO and OECD intervening to assist the developing countries in the world, critics argue that most the developing countries do not gain a lot from these international bodies. Some arguing that it is only the developed countries that are benefiting from such organizations. However, it is important to note that most of these critics have been quick to one or more actions of organizations such as WTO and OECD and not consider the general functions and goals of these two organizations. It is important that we look at these from all angles. In this case we have to analyse the living standards and economic situation of the developing countries, before and after joining OECD or WTO. Some of the opinions raised by the critics have also been crucial in assisting WTO and OECD improve their services to the developing countries. Conclusion From the analysis above it is vivid that the OECD and WTO have had a positive impact on the developing countries’ economy, both directly and indirectly. This has been mainly through trade and elimination of corruption in the member countries. The developed countries have acted as mentors to the developing countries thus enabling the developing countries emulate the best vices and do away with bad practices such corruption and exploitation. Actions by OECD such as creating awareness on the negative impacts of corruption has seen most of the developing countries embrace forums and international conferences that will assist them fight corruption. On the other hand WTO has assisted the developing countries through reducing trade barriers thus these countries benefit from quota free access and free duty. Some of those that have benefited include; Caribbean Forum of Caribbean States that include member states such Haiti, Grenada, Trinidad among others; Common Market for Eastern and Southern Africa (COMESA) which include developing countries such as Sudan, Uganda Congo, Ethiopia, among other member countries [Dep14]. Thus it can be stated that institution such as WTO and OECD help facilitate economic development in developing countries. 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