Debate on the Forces of Economic Development - Essay Example

Institution : xxxxxxxxxxx Title : xxxxxxxxxxx Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2015 Introduction As highlighted by Allison (2012), a significantly growing consensus globally has been that promoting equitable economic development depends largely on the facilitation or enabling of economic growth that take account of the masses of a population, including the poor. Although, the private sector are progressively being acknowledged as a key force in terms of economic development, significant opinions are that they do not entirely share development interests, which can contribute to inclusive economic growth. Alternatively, Allison (2012) elucidates that national governments carry out significant roles in their quest for inclusive economic development. Indeed, they create not only conditions, but also regulations within which continuous and inclusive economic development driven by the private sector is possible. As such, it is imperative to argue that governments are more effective than business/private enterprise in promoting equitable economic development. It is within this backdrop that this particular paper argues more on why governments are more effective than business/private enterprise in promoting equitable economic development. One of the major reasons why I think governments are more effective than private companies in promoting equitable economic development is that a large number of decisions by private organizations are often expressed in financial terms. With their sole purpose being financial gains, a great number of them tend to focus more on generating money instead of providing benefits to the people. As such, unlike governments, which have major responsibility obliging them to serve the people by ensuring equitable economic growth, private organizations operate within an expediently narrow image, which is extremely embedded in capitalism, and which molds most of their actions, as a consequence, constraining them to concentrate more on not only maximizing short term profits but also delivering returns to the organization shareholders. There are a number of examples to show this. For instance, despite a 650-square apartment on the Hong Kong Island estimated to cost around US$ 1 million, Cecilian Chan who works at the University of Hong Kong’s Social Work and Social Administration department argued that the housing prices in Hong Kong have risen by 120 percent since the year 2008, with this figure being viewed as outrageously unaffordable (Chen, 2013). A notable figure, Li Ka Shing, who is a renowned Hong Kong philanthropist and private investor with a number of estates, ports, schools, as well as an electricity company, has been highlighted as one of the prominent figures contributing towards the increasing housing prices. Besides being mentioned as among those pushing for increasing housing prices,Li’s electricity company is also argued to charge more on electricity as compared to what a government-owned company would. Alternatively, another significant example exemplifying private organizations’ major interest of financial gains can be witnessed within the republic of China where, despite food safety being one of the biggest concerns, a number of scandals involving organizations providing toxic foods to its clients has been noted (VOA News,2014). A large number of people are actually familiar with bad food experiences including being provided with rotten meat, tainted milk, sewer oils, dog food, fake eggs as well as toxic packaging. A great number of these food companies often employ the use of toxic materials to reduce costs. As such, they would go as far as mixing rotten meat with fresh meat, using human hair to yield cheap soy sauce, in addition to blending industrial alcohol and rice wine as liquor (quora.com, 2015). Indeed, as Foster (2011) highlights, statistics reveal that there are approximately 4 to 5 cases relating to food safety annually, with tainted milk alone having affected over 300,000 people so far. In essence, Chinese entrepreneurs are generally known to employ various strategies to deceive consumers, a factor that has been attributed to not only poor knowledge regarding food safety, but also lack of morality or ethics. The second major reason why I think governments are more effective than private companies in promoting equitable economic development is that, having the interest of the masses in mind, national governments often have the capability to come up with not only targeted policy efforts, but also regulations that create an even playing field that benefits all. Indeed, according to Allison (2012), for a nation to attain its goals on equitable economic growth, its political leaders or the government has to come up with new policies as well as regulations that ensure equitable economic growth/development at the core of their democratic development agenda. The policies and regulations must address or take care of power inequalities within the markets as well as deal with close obscurities in law that expose the poorest to abuse. Furthermore, governments also ought to provide clear indications to investors as regards what kind of growth they need by clearly and continuously expressing their priorities in domestic policy, regulation as well as incentives to encourage Foreign Direct Investment. Alternatively, without effective directed policy efforts and regulations aimed at creating an even field, the benefits filter down on just a few, hence inequitable economic growth. A significant example of this experience has been in Cambodia where economic liberalization is argued to have led to an exceptionally rapid growth rates, hitting 9.8% between the year 1999 and the year 2007.However, much of this particular growth failed to produce results for the poor. In fact, whereas the nation’s Human Development Index score has significantly progressed, income inequality has escalated, with environmental as well as social rights being disregarded and abused (Allison, 2012). In particular, the nation has experience a lot of land issues whereby poorly-managed land concessions have resulted into widespread land-grabs as well as conflicts pitting the local people and foreign firms. In general, it can be argued that governments are more effective than private companies in promoting equitable economic development based on the fact that they have the capability to come up with not only targeted policy efforts, but also regulations that create an even playing field that benefits all. Thirdly, it is also easier to argue that governments are more effective than private companies in promoting equitable economic development based on what has been observed among many nations of the world. Indeed many nations of the world have proved to not only provide effective government support in as far as economic development of their respective nations is concerned. A significant example illustrating this can be seen through the example of the Australian nation, which despite requiring its citizens to submit heavy income taxes has revealed good prospect for growth geared towards the long term. Essentially, the collected taxes could help residents acquire not only a considerable amount of pension when they get older, but also acquire the opportunity to apply for Medicare, help homeless individuals, single parent families, or even those who have lost their economic capacity to receive financial support from the government. Indeed, the Comprehensive Growth Strategy Australia (2014) stated that Australia possesses an economic growth potential to create 1 million new job opportunities over the coming five years. In conclusion, the analysis as clearly defended why governments are more effective than business/private enterprise in promoting equitable economic development. The major justifications supporting the above notion include the fact that while a large number of decisions by private organizations are often expressed in financial terms, governments bears the interests of the masses in its decisions; the fact that national governments often have the capability to come up with targeted policy efforts and regulations that create an even playing field targeted at benefiting everybody as well as the observation of many nations of the world providing effective government support in as far as economic development of their respective nations is concerned. References Allison, D, 2012, Driving Inclusive Economic Growth: The Role of the Private Sector in International Development: Report of the Standing Committee on Foreign Affairs and International Development Chen, T, 2013, Hong Kong’s High Cost of Living Deters Would-Be Parents, Retrieved on the 17th May, 2014 from : Comprehensive Growth Strategy Australia, 2014, Retrieved on the 17th May, 2014 from: Foster, P, 2011, Top 10 Chinese Food Scandals, The Telegraph, Retrieved on the 17th May, 2014 from: quora.com, 2015, Why do Chinese Cook their Food with Recycled Sewer Oil? Retrieved on the 17th May, 2014 from: VOA News, 2014, Tainted Food Scandal Grows in China, Retrieved on the 17th May, 2014 from: Read More