The paper "Poor Countries Could Not Possibly Benefit From Free Trade" is a good example of business coursework. A poor country is characterized by lack of exports, lack of different forms of capital, high unemployment rates and lack of education and class mobility opportunities. A poor country suffers from perennial balance thro payment deficits and her populace lives at the mercy of assistance, financial or otherwise, given by richer countries. Sarup (2005, p. 2) defines a poor country as one “ with a low level of material wellbeing, where there are many homeless people, underpaid workers, many unemployed people, and many ill people with no access to basic medical care” . Discussion Eichengreen (2007, p.
45) defines the international monetary system as the glue that binds different economies together. International monetary systems play a significant role in bringing about order and stability in foreign exchange markets, provision of access to international credit whenever there are disruptive shocks and elimination of problems associated with the balance of payments. The origin of monetary systems can be traced to the development of capital markets. Even before the introduction of money markets and capital markets, other forms of money were still being used.
The use of money evolved from very deep-rooted customs as shown by various studies on primitive forms of money such as cowrie shells, cattle, manilas and teeth. The development of money ushered in the switch from barter trade to monetary trade. Barter trade involved exchanging goods for other goods. When money was introduced, it became a new, efficient standard medium of exchange. Banking was developed before money in the Egypt of the Ptolomies. Early monies were in the form of coins.
Use of coins was spread mainly through trade and at times, through military conquests. In many western societies, warfare contributed greatly to the development of trade, money and banking. During the American Revolution, paper money was a major causative factor as well an important means of financing all trading activities that transformed a divided country into today’ s world superpower. The forces of globalization and capitalism have penetrated almost every corner of the world. However, globalization and capitalism are two different concepts; the former is about the closeness of societies on the global platform while the latter is about the nature of economic structures.
Trade at the international level is being facilitated by globalization. However, there are many anti-globalization activists who insist that countries should form regional trading blocs before conglomerating into a global marketplace. Anti-globalization activists claim that globalization may bring about inflation problems since there is no jurisdiction that can impose and enforce strict laws. However, the issue of free trade tops the list of the reservations of these activists concerning globalization efforts. When 34 leaders of democratic nations of the western hemisphere convened in Quebec, Canada in April 2001, the third summit of the Americas got underway.
The main objective of the summit was to make a follow-up on the objectives of the first summit, which had been held six years earlier. Schott (2001, p. 24) says that the 23 initiatives that had been agreed on during the first summit all dwelt on the steps that needed to be taken in order for progress to be achieved the western hemisphere in the form of democratic values, institutions, prosperity and security.
Anti-globalization activists in the western hemisphere believe that the best way to close the divide between rich and poor countries is to forge regional trading bloc in the form of free trade areas.
Borrus, M. (1992). Merchantilism and Global Security. Berkeley: Berkeley Roundtable on the International Economy.
Eichengreen, B. (2007). Globalizing Capital: A History of the International Monetary System. London: Routledge.
Dornbusch, R. 1992. The Case for Trade Liberalization in Developing Countries. The Journal of Economic Perspectives, 6(1), 169-185.
Faulkner, D. (Ed.) (1992). Strategy: Critical Perspectives on Business and Management, Volume 2. London: Routledge.
Nader, R. (1993). The Case against "free trade": GATT, NAFTA, and the globalization of corporate power. San Francisco: Earth Island Press.
Portesa, R. & Rey, H. (2005). The Determinants of Cross-Border Equity Flows. Journal of International Economics, 65(2), 269-296.
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Sarup, K. (2005). Can A Poor Country Become Rich? A Personal Opinion. International Journal of Sustainable Development & World Ecology, 12(4), 1-2.
Schott, J. (2001). Prospects for Free Trade in the Americas, Massachusetts: Institute for International Economics.