Economics - International Trade

Globalization and the Developing World

Globalization is the most popular trend in international economics today . Increasing integration of economies not only in terms of products and services , but also with regards to information and technology - this trend includes foreign direct investment as perhaps its single most important factor . Foreign direct investments are an extraordinary boost for the economies of the developing world . As a matter of fact , FDI flows to developing countries increased nearly four-fold in the 1990s and reached approximately 120 billion in 1997

Globalization entails growth to a worldwide

or international scale By importing and exporting more goods and services , a developing nation can increase its income and also improve the standard of living of its peoples . However , an increase in international trade is usually accompanied by an increase in income inequality , seeing that the majority of the people in developing nations are poor and cannot afford to purchase relatively expensive foreign goods in the local market , nor form gigantic enterprises to sell to the foreign public

The World Trade Organization protests globalization on behalf of the poor nations whenever these nations are threatened by it . As an effect of globalization , the developing nations are asked to accept the standards of environmental and labor protection that the rich nations have been able to afford only now - just because the poorer nations are doing business with the richer ones . Because the pace of development is extraordinarily rapid with respect to globalization , the World Trade Organization wants to emphasize that developing nations must be given more time to adjust to change . The fact that these nations require more time to adjust to change is illustrated by the experience of India with regards to child labor law . In point of fact , child labor law in

GLOBALIZATION AND THE DEVELOPING WORLD

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India took a long time to be developed . The law was implemented at various levels over the course of many years , the reason being that India required children to work in its factories because of the Indian economy 's dependency on cheap labor . Besides , the parents of Indian children who worked could not afford to support their children that did not work

Poor nations are primarily agricultural . These nations exported agricultural produce to the developed world in exchange for manufactured goods to begin with . Due to globalization , manufactured goods may now be produced worldwide , and are being manufactured thus . This , of course , must lead to a decrease in exports and a reduction of money making possibilities in the developing world

The debate over agricultural trade is by and large the most important issue at the World Trade Organization . Pitting rich nations against the poor , the debate emphasizes that the world 's poorest nations have few exports to offer besides basic agricultural products . Given that international trade is a necessity in today 's internationalized world , developing nations must compete against the giant nations , such as the United States and Japan . Developed nations support farmers with subsidies because if they did...