Nations engage in international trade because they benefit from doing so and the gains from trade arise because trade allows countries to specialise their production in a way that allocates all resources to their most productive use. Trade plays an important role in achieving this allocation because it frees each and every country’s residents from having to consume goods in the same time combination in which the domestic economy can produce them. China’s growing presence in Africa has increasingly become a topic for debate in the international system and among economists as well as policy analysts. China’s presence in Africa and its relations with African countries is primarily driven by economic interests and practical political considerations,
It seems to work one way for the poor countries and another for the rich. It is quite clear that free trade benefits the consumer as prices of goods are lower due to cheaper imports without taxes on them. But it threatens on forms of local home grown business be it agriculture, clothing or technological and in these poor countries locals are forced out of their jobs due to the unwanted corporate
In Africa there are programs designed to assist in reducing poverty but ends up in the hands of corrupt people, the distribution of the money is unequal, the large amount of money are spend on the person in charge of the program not on the poor people. Due to the poor governance, the people in the higher authority are unable to solve such matters. At the end those unprivileged people still have face poverty and that causes inequalities in their society. Africa is wealthy in minerals and other things but they do not have the necessary equipment or even to deploy the needed equipment. Problem statement Are
Shiva said the Nitrogen fertilizers, sold to Africa with high prices, are doubly criminal because they force the poor into a debt and the humanity into an ecological one. (Null, 2008) Hence, that debt made the poor poorer due to the free trade by globalization. According to the United Nations, poverty is not the lack of money only, but it is the lack of accessing to the most basic needs of humans like the food, health, education, clean water. Also, the number of people living in extreme poverty is 836 million while there are around 20% of the world’s population living on less than 1.25 dollars a day. Although it was a target to halve the number of people living in hunger by 2015, the rates of poverty are raising.
For example, the government caused scarcity of silver in China caused farmers to cultivate less land because it drove the prices of grain down (Doc 3). This conveys the social problem that because the flow of silver in china was limited because of the government, farmers were not able to cultivate as much land. Therefore, less food was produced to sustain chinese society. Moreover, Ming official Ye chunji explains that a simple man is fulfilled even with scarcity of silver, while a extravagant man can not be content with huge amounts of silver (Doc 1). This record depicts the social problem that the huge flow of silver has caused some people to leave traditional confucian and chinese values of modesty and unnecessary spending because the author claims that there are people in society that can not be satisfied with enough wealth.
Over the years, Zambia have been experiencing economic and mental poverty, where they lack basic needs and education, due to tax havens. The Guardian(2013) stated that tax haven companies have legally avoided enough Zambian tax to put 48,000 children in schools. However, educational poverty in rich countries is not as unfavorable as in poorer states. The Guardian(2015) indicated that in the US, most students attending public schools live in poverty due to low-income families. Therefore, citizens are withheld from pursuing an education in Zambia due to lack of revenue, as oppose to the US, and will result in unemployment as mentioned by the National Bureau(2015) that poor countries with unskilled labor do not gain from trade reform.
China and South Africa), or one country and a trading bloc (e.g. the European Union and Morocco) or 2 trading blocs (e.g. EFTA and SCU). ADVANTAGES OF REGIONAL AND BILATERAL APPROACH FOR BOTH POOR AND RICH COUNTRIES Most of developing countries are enjoying some sort of trade preferences in the form of very low or up to zero tariffs on their exports to developed countries. Bilateral trade deals tend to attract less attention, therefore pressure from the opposition forces is likely to be low.
Promotion of small business entrepreneurship policies created by the government can attracts these investors, which enables a stable economic growth. Politics affects the macro environment of every business and in order to have a positive effect on it, it is mandatory for it to be unwavering. This enables investors to be confident about decision making relating to whether to invest in the country or not. Political factors analyze economic processes and also include how a state government affects its economic performances. According to Gerring, et al (2005), democracy has a negative effect on our economic growth.
Even though competition helps a company to stay productive and effective the more competition there is in a market the less sales you will have. Another disadvantage for Illovo Sugar is that the South Africa government does not provide any form as assistance or subsidies. They now have to compete against international companies who receive export subsidies from their government. The implication for Illovo Sugar is that they now have to compete against very cheap prices without having any form of assistance what so ever. Overseas companies can sell sugar at a cheaper price that what Illovo Sugar can produce it locally.
Less developed countries, such as African countries, largely depend upon single primary commodities for economic growth. There are several drawbacks to such a reliance on a primary product for the growth of the economy (Stein 1970: 607). Such economies are not able benefit from comparative advantage, due to the inability to direct resources towards other sectors, such as industry, with a greater potential for growth (Stein 1970: 611). According to Nafziger (2006: 611), less developed countries are “vulnerable to declining terms of trade due to the inability to shift resources to accommodate shifting patterns of comparative advantage”. Additionally, manufacturing exports are produced at a much faster rate than primary products.