International Economics - Essay Example

In the case of a country’s competitiveness, it is directly associated with its economic activities and complex international trade condition (Wong & Grinols 1995).It is therefore clear that countries with substantial economic activities and potential earnings are viewed to be competitive enough to play their part in the worldwide economy. In the same way, those countries with poor economic performances are most likely known or called for their incapacity to compete in the world’s economic activities.

This is eventually true when one has to try to take a look at the right measures used in economic performances. Adam Smith and David Ricardo and other economists come to agree that the competitive advantage of a certain location may be due to its local availability of resources for production purposes (Sachs & Warner 2001). However, it is not all the time that those countries with enough supply of resources may stand competitive over the other. In the same way, a country with arable lands does not necessarily mean economic competitiveness in its part.

Most likely, the availability of enough manpower does not automatically mean a competitive advantage. If factor of international trade and factor input mobility are not considered, a certain region or country with larger resources can be capable of producing goods and services compared to other market or economy (Easterly & Levine 2003). In this paper the proponent elaborately discusses the extent to which factor availability is no longer an effective explanation of the competitiveness of regions or countries.

There are other important factors that need to be elaborately discussed in order to understand further the true nature of competitiveness of a country. Some other countries have become so intensively competitive due to their political control or power in the world wide economy. There are other environmental issues that need to be considered and in the end it is important to create a link of them to the