Free Trade Benefits For Developing Countries
Free Trade is a boon to developing nations and is considered as a very significant, element to reduce the poverty levels. There is proof that trade liberalization increments growth and production levels while improving the entire economy. This is a popularly held notion, which can be traced back to classical economists like Adam Smith and David Ricardo and has been continuously put into an international practice for more than twenty years. Free trade creates job opportunities, enforces economic growth world wide, and improves customer choice and the living standards of people all around the globe. Limiting the trade diminishes economic growth, slows the formation of high-paying jobs, and harms customers by boosting up the prices for goods and services. Free Trade can even be considered as a solution to lots of issues existing world wide. From historical times there is enough evidence that people have been involved in trading with each other and derived benefits from it.
The critiques think that free trade has got a lot of negative aspects. They believe that developed countries robbed and exploited former colonies’ natural resources and that is the reason why former colonies remain poor. That might be an issue in some cases, but what we generally see in today’s world is that, the more natural resources a nation possess, the worst things happen for the common citizens over there. If there is a valuable natural resource in some area, then there will be strong power struggles to keep control of it within small elite. Places devoid of natural resources, like Taiwan, Singapore etc, have formed relatively broad-based economies, while countries rich in oil or minerals usually have not. The wider an economy is, the more its money and income are spread out. Johan Norberg says that the best thing that could happen to the Arab countries would be for them to run out of oil. Then they would have to open up to free trade, so that economy will not be in the control of less number of people, as in the case of Saudi Arabia.
If free trade is not implemented economic and political centralization will arise. It will give rise to unwanted very strong power centers in a large number of places. This can be seen in Africa. As the scholar George Ayittey points out, in several African countries there once prevailed many regional markets and local democracies where the chief was responsible to his people and had to carry out their decisions. But when colonialism emerged, they formed power groups that weren’t responsible to the people. They exploited resources and, with the aid of small local groups, became autocratic owners of the area. When they abandoned the place, the local elites just snatched the power structures and transformed to the new occupation forces. They actually took over the machinery of autocracy abandoned by the colonizers (Gillespie, 2003)
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