International Trade and Developing Countries
International Trade and Developing Countries
CSU-Global
The purpose of this paper is to examine the problems faced by developing countries on global market and to evaluate the steps that governments take in order to assure that developing countries obtain a fair share of the benefits of international grade. As Carbaugh (2011) pointed out, most economists today agree that taking advantage of international trade is “the best strategy for a poor nation to develop” (p. 233). In the past two decades, many developing nations, including China, Singapore, Hong Kong, South Korea, Bangladesh, India, Indonesia, Sri Lanka, Vietnam, Mexico, Turkey, and Morocco, followed this strategy, opened their markets to international trade and foreign investment, and realized significant poverty reduction (Carbaugh, 2011). By investing into technology, infrastructure development and education, these nations were able to shift from exporting agricultural commodities to integrating their economies into the world’s industrialized economy by exporting manufactured products. Another group of developing nations that realized wealth in recent decades consists of oil-exporting nations such as Saudi Arabia, Iran, Iraq, Egypt, Syria, Algeria, Angola, Ecuador, Kuwait, Libya, Qatar, Venezuela, and the United Arab Emirates (Carbaugh, 2011). However, not all developing countries experience a positive effect of global trade. According to Carbaugh (2011), “some developing nations have become dubious of the distribution of trade benefits between themselves and advanced nations” (p. 234) and accused the protectionist trade policies of developed nations in slowing down the industrialization process of the developing world. It is true that the gap between export revenues and the prices that developing countries pay for imported goods is growing. Carbaugh (2011) cited the study conducted by the United Nations in 2004. The study found that “between 1961 and 2001, the
CSU-Global
The purpose of this paper is to examine the problems faced by developing countries on global market and to evaluate the steps that governments take in order to assure that developing countries obtain a fair share of the benefits of international grade. As Carbaugh (2011) pointed out, most economists today agree that taking advantage of international trade is “the best strategy for a poor nation to develop” (p. 233). In the past two decades, many developing nations, including China, Singapore, Hong Kong, South Korea, Bangladesh, India, Indonesia, Sri Lanka, Vietnam, Mexico, Turkey, and Morocco, followed this strategy, opened their markets to international trade and foreign investment, and realized significant poverty reduction (Carbaugh, 2011). By investing into technology, infrastructure development and education, these nations were able to shift from exporting agricultural commodities to integrating their economies into the world’s industrialized economy by exporting manufactured products. Another group of developing nations that realized wealth in recent decades consists of oil-exporting nations such as Saudi Arabia, Iran, Iraq, Egypt, Syria, Algeria, Angola, Ecuador, Kuwait, Libya, Qatar, Venezuela, and the United Arab Emirates (Carbaugh, 2011). However, not all developing countries experience a positive effect of global trade. According to Carbaugh (2011), “some developing nations have become dubious of the distribution of trade benefits between themselves and advanced nations” (p. 234) and accused the protectionist trade policies of developed nations in slowing down the industrialization process of the developing world. It is true that the gap between export revenues and the prices that developing countries pay for imported goods is growing. Carbaugh (2011) cited the study conducted by the United Nations in 2004. The study found that “between 1961 and 2001, the