In Getting Started on Social Analysis in Canada
Clarke, Czerny, Davies and Swift explain that the Third World conditions experienced in the southern countries (Third World countries) are as a result of unfair economic constitutions adopted by the rich nations, which are the US and the Western European countries (110). They argue that although international exchanges of ideas of arguably everything have increased, leading to faster flow of money, goods, people and information (Cairns and Sears 243), rich nations have taken advantage of their superiority to trample on the developing countries.
This, they explain, is as a result of unequal financial, as well as, trade relations. I completely agree with this assertion, based on the economic policies adopted by the World Trade Organization, International Monetary Fund and the World Bank where the rich nations are the major shareholders and signatories (UN Development Programme 2).
In my view, the rich nations in Western Europe and North America are responsible for the economic problems experienced in Third World countries. The global trade and commerce has not been able to generate the economic growth essential for the development of the Third World countries, while the rich nations continue to achieve significant economic growth and development (Shah 2).
Third World countries have been turned to beggars and highly depend on the rich nations for financial assistance. The enormous debts that they owe to rich nations have become the main obstacle to achieving human development and economic stability. According to Clarke, Czerny, Davies and Swift, poor countries pay more in debt services as compared to what they receive from loans (110).
Rich nations siphoned-off massive resources from Third World countries during the colonial period, and to further cement their economic power and growth, adopted economic policies that allow them to scoop more wealth from these countries. The rich nations have sometimes imposed loans on Third World countries so that they can achieve their interests, thereby increasing the debt burden on poor countries (Shah 8).
These unfair debts which result from illegitimate loans destabilize the economic growth of poor countries considering the high interest rates that they repay the loans with. Rich nations therefore get richer while poor nations only achieve minimal economic growth. Clarke, Czerny, Davies and Swift advocate for development based democracy and fair dealing (110).
While it is important to create economic institutions for the growth of a country or the world as a whole, the provisions of international economic constitutions should not favor the rich nations at the expense of the poor nations. The international economic and financial institutions such as IMF and World Bank have been instituted in such a way that the rich nations from North America and Western Europe control and scoop wealth from the poor countries.
Third World countries are forced to play along the rules created by rich nations or else they risk economic alienation or sanction even though these economic policies have more disadvantage to them than advantages. I take the example of Ethiopia where the IMF suspended financial aid due to its rejection of the one-size-fits-all development model adopted by the organization, at a time when the country lagging at the 170th position on the UN list (Clarke, Czerny, Davies and Swift 111-112).
Liberalization of markets and privatization policies further worsens the ability of poor countries to achieve significant economic stability. Rich nations have not allowed poor countries to stabilize their economies before they adopt the liberalization and privatization policies. In my view, this is the major reason as to why rich nations continue to unfairly drain off resources from poor countries to develop their own economies.
It is now several decades ranging from 6 to 3 since most of these poor countries attained independence from colonial control, and yet they are still not ready to compete favorably in global trade and commerce with the rich nations. This means that they were ambushed to adopt these policies. The former chief economist of the World Bank, Joseph Stiglitz, argues that IMF and the World Bank have adopted economic policies which push governments of poor countries away from controlling their internal markets claiming that free-market capitalism would help these countries solve their economic problems (Clarke, Czerny, Davies and Swift 110).
Today, the markets are controlled by demand and supply, as well as competition and not governments. Rich nations therefore take advantage of the poor countries by expanding their already established companies to developing economies. They quickly control the markets in such countries ahead of the domestic industries, yet the revenue collected in the process is repatriated. Clarke, Czerny, Davies and Swift are also share my view that the financial liberalization advocated for by the rich nations and international institutions such as the IMF and the World Bank unfairly benefit the economies of rich nations (111).
It limits ability of the poor countries to establish protectionist measures for their not yet stable financial markets and therefore opening them up to free-market economics. Poor countries no longer have the capacity to control the financial markets, meaning that they can not influence productivity, jobs, as well as, the prices of imports and exports.
I strongly believe that the economic policies applied by the rich nations and the international agreements which they make with the rich nations, have got nothing to do with achieving global economic growth. These policies and agreements are meant to achieve protectionism to their domestic products and companies, and to expand the market for their commodities and services.
The mutual benefits in these relationships are skewed and highly favour them. Clarke, Czerny, Davies and Swift (119-120) explain that some rich nations have occasionally applied technical barriers to limit trade abilities of other nations. Such governments have always quoted worker, consumer or environmental protection as their reasons for banning the importation of some products.
In my view, these are protectionist measures adopted to protect their economic interests. Canada has been forced to sign many international economic agreements to satisfy the economic interests of the US, and the World Trade Organization to benefit from the trade and economic relations with the US and Western European countries (Naiman 126). Rich nations normally sign agreements which have more trade benefits to them and which result to trade creation on their side more than it does to developing countries.
The market economics programs of liberalization, as well as, privatization which have controlled the new era of globalization are questionable. They have unfairly given rise to development for the US and the Western European countries.
I therefore conclude that development as a result of globalization should not just consider economic growth, but should be made sustainable, and participatory. There should also be checks on the free market particularly by Third World countries. Besides, there should be liberty to participate effectively and equally in trade and commerce.
Cairns, James and Sears, Alan. A Good Book. In Theory Making Sense Through Inquiry, 2nd Ed. Toronto: University of Toronto Press, 2010. Print.
Czerny, Michael, ]ackline, Clarke, Davies, Robert, and Swift, Jamie. Globalization and development. In getting started on social analysis in Canada, 4th ed. Toronto, ON: Between the Lines, 2003. Print.
Naiman, Joan. How Societies Work: Class, Power, And Change In A Class, Power, And Change In A Canadian Context, 4th Ed. Fernwood Publishing Company Ltd, 2008. Print.
Shah, Anup. Causes of Poverty. Global Issues, 05 June, 2011. 08 July, 2011. http://www.globalissues.org/issue/2/causes-of-poverty
UN Development Programme. Human Development Report 1999. New York: Oxford University Press, 1999. Print.