The Politics of International Trade in the 21st Century - Essay Example

Global Economy With the increasing levels of globalization which are resulting from liberalization of markets, efficient flow of information, and integration of economies, the competition levels in the international and local markets has increased tremendously over the years. This is because of the entry of multinational companies which have a huge financial base to position their products strategically in the market, attract the loyalty of the customers towards their products and services, and segment the market. This has enabled them to accumulate a huge amount of money which is used to create a barrier of entry to other interested investors. Global economy has created an opportunity for organizations to diversify their operations to different parts of the world. This is in an attempt to reduce the risks and uncertainties associated with concentrating on a single market (Katada 64). On the other hand, governments have come together to form multilateral organizations in order to take advantage of the opportunities that have been brought about by globalization. These organizations obtain their funding from multiple governments in order to initiate projects in different countries across the world. One of the major roles of multilateral institutions is to improve infrastructures in different parts of the world. This is in an attempt to reduce the poverty levels in the world and especially in developing countries. Institutions such as Asian Development Bank, African Development Bank, and European Bank for Reconstruction and Development are some of the multilateral institutions which receive finances from different countries in order to oversee the implementation of different projects (Martin 53). Some of the areas supported by these institutions include capacity extension and improvement of access to electricity. In addition, they support the expansion of roads and other critical infrastructures that are of great importance to the local population. Besides the funding, their existence especially in monitoring mega projects in developing countries attracts the confidence of investors who in turn invests in various mega projects that plays a critical role in reducing poverty levels and creating employment in developing countries. Multilateral Development Institutions participation in different developmental projects brings a semblance of transparency and assures people a competent and due diligence in various projects that brings socioeconomic and political reforms. Therefore, these institutions are agents of change. Furthermore, they put pressure on governments to streamline local systems for the benefit of the local people. This is critical in spearheading growth and development in these countries. Furthermore, these measures ensure that those in government use public finances effectively (McNabb 34). This is achieved through conducting independent auditing to ensure that public resources were channeled towards the right direction and people are benefiting from the same. Multilateral institutions such as World Bank tackle global burdens that cannot be handled by a single country. For instance, the institution has been instrumental in handling ill-health and providing people with the necessary health facilities. In Africa and Asia, the bank has established various hospitals to treat the most vulnerable in the society. This aspect has been critical in reducing the mortality rates in the world. Research indicates that ill health is associated to poverty because it restricts people from undertaking their activities. The World Bank has therefore, set up a fund to alleviate poverty through giving out loans and credits on advantageous terms which are not available in the market. In addition, it provides grants to poor countries in order to initiate development projects in different sectors of economy such as education healthcare, agriculture, and management of environment and natural resources (Spilsbury 135). Besides funds, the interventions through projects has played a significant role in creating diverse employment opportunities to the young people in areas such as financial management, lawyers, educators, etc. Education is a very critical area in relation to poverty eradication. Many developing countries are crumpling with the increasing population levels, an aspect that is straining the existing educational infrastructures. In addition, some of these governments are under pressure to deliver in other areas of the economy. This has made it hard to focusing its attention in the education. Multilateral institutions have been closing these gaps by releasing funds to support the education sector. This has made it possible for these governments to subsidize the costs of education. As a result, both the poor and rich in the society have access to education (Kiely 92). The institutions have also been establishing schools in remote areas to help children get access to quality education. This has been instrumental in opening up rural areas and tapping on the talents of the young generation residing on these areas. Multilateral institutions provide much needed help to the most vulnerable in the society. For instance, the United Nations Children’s Education Fund plays a critical role in addressing the welfare of the children across the world. Some of the interventions include improving the health of the children and implementing health projects such as immunization, oral rehydration, HIV/AIDS education, and providing micronutrient supplementation to the children who need them most (Kelly and Wyn 84). Food security is critical to the existence of human beings. However, with the increasing levels of population and threat being posed by global warming, many developing countries are finding it very hard to sustain the food demand. In addition, these governments lack the capacity to produce enough food for the whole population. Moreover, majority of farmers in these countries are illiterate and lack the necessary equipments to produce enough food. They therefore, depend on rain fed agriculture for production (Haynes 116). However, multilateral institutions have been intervening in alleviating food crisis in the world. This is through providing grants and loans to governments in order to improve the necessary agricultural infrastructure. In addition, they have been offering the farmers with training in order to enhance their production capabilities. This has played a critical role in improving the food security levels in the world. The world environment and natural resources are under intense threat resulting from increased pollution. With the increasing levels of industrialization and mechanization of different sectors such as transport, the level of pollution in the world is reaching a melting point. This is because environment is a common resource and no country is responsible to take care of it. Therefore, multilateral organization such as UNEP have been playing a critical role in ensuring that the natural resources are preserved and various industries that are releasing their affluent in the atmosphere are put under notice (Beeson and Nick 48). Although these bodies are being overwhelmed because of the urgency needed to deal with the threat of global warming coupled by the unwillingness by some countries to regulate their local industries, these institutions have deterred some industries from polluting the environment. With the increasing levels of economic interconnectivity, the prospects of improved economic governance are very high. Initially, every government used to protect its interests and that of its people. However, with globalization, economies are relying on each other. Therefore, in order for developed and developing countries to record growth and development, they must work together towards a common objective. Therefore, in the past one decade, developed countries have shifted their attention towards helping developing countries to improve their economies (Guillén and Baeza 72). This is through giving loans and grants to these countries in order to improve the infrastructure levels and eradicate poverty. This aspect has increased the prospects of improved economic governance especially while putting into perspective that the developed countries are sending their auditors to ensure that money given to these countries are utilized effectively. This has reduced the level of corruption and improved the governance levels as these countries are piling pressure on developing countries to improve the levels of transparency in order to benefit from the money. With the liberalization of markets, each country is keen to ensure that its economy is not affected by poor governance in other countries. The 2008 financial crisis has offered the countries with an ideal lesson on the importance of effective economic governance. All countries were affected by the crisis. Since them, the countries have taken upon themselves to ensure that economic governance is improved in order to avert another crisis in the future. Therefore, the future of economic governance is bright. On the other hand, the increasing of democracy and ideologies that are development oriented indicates that the level of governance in the world will improve significantly with the governing power shifting to people (Dunaway 98). Therefore, the members of the public will participate effectively in governance and put into task the spending of their taxes. Therefore, the level of transparency and accountability in world governance will improve immensely. World bodies such as United Nations and International Monetary Fund have increased the prospects of improved economic governance. Initially, political leaders were in full control of the country’s resources. Therefore, they were dividing resources according to voting patterns and relationship with people in order to maintain their loyalty. However, these external bodies are playing an oversight role and ensuring that misuse of public finance is minimized. In addition, they have set up mechanisms to put the leaders in these countries under pressure in order to deliver to their citizens (Smith, Imad El-Anis, and Chris 79). For instance, they have put conditions that any leader who fails to comply with the set policies will not be able to get access to developmental loans and grants. Improvement in technology is having a major impact on economic governance across the world. With the entry of internet and social media in the world, it has become easy for citizens to share information about the issues that they would like to be addressed. The Arab Spring is a good example of the power of the new technology. A small scuffle in the street spread across the social media and forced people to move to the street in order to oust their president who has neglected their agendas and instead pursue his personal interest. Therefore, technology has given an opportunity for the people to participate in the governance of the country. Currently, countries are uniting with their neighbors in order to form economic blocks. For instance, the recent formation of BRICS which include Brazil, Russia, China, South Africa, and India is an indication that the countries are willing to play an oversight role over each other. In addition, this is an indication that countries now trust each other with their economic progress (DeMartino 78). Formation of such trade blocs is actualized through signing of an agreement that every member must maintain good governance and political tolerance. As a result, formation of these trading blocs increases the prospects of improved governance in the days to come. One of the major changes that have been put forward by different policy-advocate to make global economy function more efficiently and fairly is related to trade. Initially, countries had internal policies that protected the interests of the local producers. For instance, Japan had limited imports of cars in its markets. However, with the formation of World Trade Organization, these policies have been replaced by policies that advocate for free markets. Although a certain school of thought believes these policies are hurting the economies of developing countries. This is through exposing them to products from developed countries. These are countries that have diversified their source of revenues and they have invested heavily in the modern technology making it possible to produce products at very low costs. Nevertheless, this policy will ensure that developing countries do not lag behind in terms of economic development. Global economy cannot function without putting in place the ethical standards to be followed by all countries and organizations. Through the Universal Declaration and other policies by international constituted bodies such as UN, the interactions of different countries are being assessed by external observers (Beeson and Nick 34). They ensure that there is no imbalance in trade or political relations which might affect the success of the global economies. In conclusion, the multilateral institutions have been instrumental in delivering much needed help to the vulnerable people in the developing countries. In addition, they have acted as auditors to governments across the world. This has improved the level of governance. Moreover, it has protected the interests of the people from being exploited by the political leaders. On the other hand, the world governing bodies have put up policies to protect the functionality of the global economy. This has been significant in achieving global success. Works Cited Beeson, Mark, and Nick Bisley. Issues in 21st Century World Politics. Basingstoke: Palgrave Macmillan, 2013. Print. DeMartino, George. Global Economy, Global Justice: Theoretical Objections and Policy Alternatives to Neoliberalism. London: Routledge, 2000. Print. Dunaway, Wilma A. Emerging Issues in the 21st Century World-System: Volume 2. Westport: Praeger, 2003. Print. Guillén, Mauro F, and Baeza E. Ontiveros. Global Turning Points: Understanding the Challenges for Business in the 21st Century. Cambridge [England: Cambridge UP, 2012. Print. Haynes, Jeffrey. World Politics: International Relations and Globalisation in the 21st Century. New York: Pearson Longman, 2011. Print. Katada, Saori N. The Global Economic Crisis and East Asian Regionalism. Abingdon: Routledge, 2012. Print. Kelly, Dominic, and Wyn Grant. The Politics of International Trade in the 21st Century: Actors, Issues, and Regional Dynamics. Houndmills: Palgrave Macmillan, 2005. Print. Kiely, Ray. Empire in the Age of Globalisation: Us Hegemony and Neoliberal Disorder. London: Pluto, 2005. Print. Martin, James. The Meaning of the 21st Century: A Vital Blueprint for Ensuring Our Future. New York: Riverhead Books, 2006. Print. McNabb, David E. Public Utilities: Management Challenges for the 21st Century. Cheltenham: E. Elgar Pub, 2005. Print. Smith, Roy H, Imad El-Anis, and Chris Farrands. International Political Economy in the 21st Century: Contemporary Issues and Analyses. Harlow: Longman, 2011. Print. Spilsbury, Richard. Global Economy. Chicago: Heinemann Library, 2012. Print. Read More