Introduction:
With the passage of time there will be many changes
globally that would affect the economy of many
countries. Globalization was one of the major
changes that the world witnessed recently, and
similar to this kind of major make over, there
are expected to be more isolated yet more effective
changes made.
In the last 10-15 years trade has seen major changes.
These changes are ones that directly affect the
lives of the working class, and have raised a
great deal of concern for millions of people.
This is because of the fact that democratic principles
might well be overwhelmed by capitalist endeavors.
However, from a governmental perspective it appears
that these strategies are ones that would not
interfere with democracy. It seems that the government
believes that the alliances would aid the effect
of globalization, thereby creating better trade
in the North Western hemisphere.
There are many organizations who act as the alliances
some of the most noted ones are the World Trade
Organization & The IMF there are briefly described
below
World Trade Organization (WTO): -
The World Trade Organization (WTO) is the only
global international organization dealing with
the rules of trade between nations. At its heart
are the WTO agreements, negotiated and signed
by the bulk of the world’s trading nations
and ratified in their parliaments. The goal is
to help producers of goods and services, exporters,
and importers conduct their business (Lucas, 2003).
International Monetary Fund (IMF): -
The International Monetary Fund is a specialized
agency of the United Nations system set up by
treaty in 1945 to help promote the health of the
world economy. Headquartered in Washington, D.C.,
it is governed by its almost global membership
of 184 countries.
The IMF is the central institution of the international
monetary system—the system of international
payments and exchange rates among national currencies
that enables business to take place between countries.
It aims to prevent crises in the system by encouraging
countries to adopt sound economic policies; it
is also—as its name suggests—a fund
that can be tapped by members needing temporary
financing to address balance of payments problems.
By uniting several economies in the North Western
hemisphere the alliances believe it can establish
conditions in which trade would be most efficient.
In order to implement such a strategy in the North
Western hemisphere it must be realized that there
are quite a good number of companies required
to make it all possible (Lucas, 2003).
Protestors believe that some of the biggest business
owners want more and more autonomy from the government,
and have in fact succeeded in blackmailing them
into allowing them to implement the free trade.
By implementing free trade, it is said that businesses
that establish liberty to trade with whomever
they want gain both power and profit. This kind
of situation is something that is extremely dangerous
to the 800 million people living in North, Central
and South America. These same people produce an
estimated CDN $15 trillion even though more than
half of them live in poverty. It is feared that
the alliances might have an immense influence
on their lives and worsen their already pathetic
standard of living.
Though these kinds of fears still prevail with
the existence of the alliances, its merits must
not be over-ruled. It should be remembered that
products that are scarce or are not available
would be freely available at affordable rates
(Garrett, 1995).
The fact that labor is cheaper in economies outside
the United States and Canada creates enormous
opportunity for profit for investors. This is
because of the fact that products produced where
labor is cheaper means that they would be sold
for greater profit in the investing countries.
But this does not mean that only richer countries
or investors would gain from such a venture. This
is because of the fact that there would also be
many more job opportunities created in countries
that fall under the THE ALLIANCES.
In addition to such benefits there are numerous
others that may be achieved under the agreement.
In the December of 1994 in Miami this was the
basic idea behind uniting the economies of the
Western Hemisphere into a single free trade arrangement.
Though the concept was initiated in 1994 the FTAA’s
launching is planned for 2005, and this venture
would certainly supercede NAFTA, as it encompasses
many more countries in the North Western Hemisphere
(Garrett, 1995).
The alliances such as the FTAA even has greater
potential for efficient trade than the NAFTA,
as is emphasized in the words of US Secretary
of State Colin Powell: “Our objective with
the FTAA is to guarantee control for North American
businesses over a territory which stretches from
the Arctic to the Antarctic, free access, over
the entire hemisphere, without any difficulty
or obstacle, for our products, services, technology
and capital” (Ainger, 2002).
It is evident that there would be a surge in the
US economy if the THE ALLIANCES were to be established.
There is already so much zeal for its inception
from the private sector which means that the economy
would certainly be strengthened. Though there
would not be heavy or extra taxes imposed on the
private sectors but the fact that there would
be many more businesses participating in the venture
that the regular taxes collected would serve as
a basis for more funds in the country.
In addition to the US gaining economically the
poorer countries would also gain though their
taxes would not be increased. This is because
there would be many more people with jobs there,
and businesses setup under the alliances would
also provide more regular tax for their countries.
It is because of this that their economy would
also be ameliorated (Garrett, 1995).
Considering the number of people whose lives would
be influenced by the alliances it must be realized
that there would certainly be a very significant
outcome. It is really up to governments to overview
all the trade processes that would take place
in countries under the alliances.
One cannot begin to imagine what would ensue if
organizations really had enough autonomy to carry
out their businesses independently. It is quite
hard to believe that governments would be blackmailed
by organizations to allow them more power and
profit. This is because governments would not
allow the country to be used for the sake private
sector if the country did not stand to gain anything
from a particular venture.
It is also quite hard to believe that there would
be so many countries involved with the alliances
that would be blackmailed by businesses. Governments
surely would be more aware of the intimidating
aspects of businesses and would not permit any
kind of venture that would cause them or their
people to lose power and independence.
The alliances are an agreement that is bent on
ameliorating trading conditions in the North Western
hemisphere, and therefore making these countries
more and more independent of other countries that
are greater distances. In this way these countries
are also saving themselves a great deal of resources
because of the distances and time spans being
mitigated tremendously. Their markets too are
large enough to host trade with in the North Western
hemisphere, without them interacting with other
continents. Independence of other countries with
regard to trade seems to be of central importance
in the alliances, along with the fact that there
is immense scope for greater profit.
The poverty of a country can be defined as the
total economic stability or instability it has.
It defines the status of the individual and the
country as well. Countries that are poor are likely
to remain the same for a long period in a society
where there are many inequalities. This is often
the trend that is followed in capitalist society.
Most of the poor countries that are trying to
apply democracy are the ones that seem to become
victims of the same. It appears that richer countries
can afford this form of government if the general
standard of living is relatively higher than others
(Rodrik, 1997).
An example of this is the United States of America,
where we see that there is also significant amount
of poverty and unemployment. This country also
has a high standard of living, so these effects
are not that prominent. But, if we look at a country
like India, we see that because the general standard
of living is so low the whole country seems to
be a poor one, and the majority of the population
suffers.
At the same time, we must also compare the two
as far as their defense budgets are concerned.
This gives us a good idea of some of the reasons
why poverty is so difficult to remove from there.
Of course, though the international community
is aware of the way that things have fallen into
place against the favor of these poor countries,
there is not much that can or will be done about
the same. It is the international politics practiced
today that keeps the poorer countries the way
that they are so that they are not capable of
developing themselves to a degree that will match
the superpowers, which at one time ruled over
them by force. Today, the same is seen and not
much has changed because it all continues in the
form of economic oppression.
According to Chen & Ravallion we find that
the incidence of poverty decreased between 1987
and 1998. The level of poverty in some regions
of the world has gone extremely bad in the last
decade or so, and this is largely due to the effect
that free trade has had along with few other factors.
But this is just one of the reasons for the same
in countries where there is far too much freedom
exercised with regard to trade. It is also said
that far too many “persistent inequalities
(in income and other measures)” are responsible
for the poverty of the world to be in such bad
shape. The economic growth and the rate of it
as well are responsible for the condition that
the world economy is in today (Rodrik, 1997).
Though globalization has taken place, and the
rate at which trade should be taking place, it
appears that the reverse has resulted. And this
is largely due to the faulty policies that have
been implemented by governments that have encouraged
too much freedom. There is also a reason for this.
The state of some of the poor countries is so
bad that the education there is also in a pathetic
condition. There are many people who are struggling
to improve the literacy level too, but it is indeed
a difficult task because of the lack of funds
in these regions (Rodrik, 1997).
In addition to this, those who do manage to obtain
a good education do not want to waste their acquired
knowledge within the same country, and hence,
search for means to better their prospects abroad.
It is these people who do not realize the fact
that they are the ones who are being exploited
the most for their talents and capabilities. They
are given lucrative offers outside their own countries,
which they do not refuse. As a result, exploitation
does not end even if the individuals are educated,
and the country itself continues to be led by
less educated, shortsighted politicians that serve
as an internal destructive force. This takes place
because they have a lack of realization of the
situation that they get into, and they know that
they only have a short while to amass wealth while
they are in power. Hence, the country sinks deeper
in poverty.
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