Are Economic and Social Development Affected by Trade and Investment? (pp. 52-53)
In the recent world, all economies are open in the monetary environment of globalization. Trade assumes a critical part in shaping social and economic performance of numerous nations around the world, particularly the underdeveloped countries. The development of these countries is as a consequence of trade. Nevertheless, the contribution of trade to development relies on upon the setting in which it works and the goals it serves. To ensure that trade and investment plays a crucial role in enhancing social and economic development, United Nations Conference on Trade and Development (UNCTAD) launched an initiative known as Trade and Development Index (Kearney, 1984). Foreign direct investment has a definite impact on exportation performance across all countries. FDI influences exports inclusive of export supply capacity and technological content, especially in the knowledge-based firms. The impact of foreign direct investment is seen to be strong in the third world countries. TDI provides an indication of nation’s trade rules and strategies that enable commerce to act as a vital tool for improving development.
IMF Sees a Growing Africa and So Does China.
In 2010 and 2011, International Monetary Fund has augmented its growth expectations for Africa. In 2011, IMF predicted that sub-Saharan Africa would grow by 5.5 percent and by 5.8 percent in the year 2012. Although many African economies were significantly affected by the economic downturn of 2007, with their development reduced by fifty percent, they had strong retaliations that were majorly based on increased trade with countries such as China, Latin America, and Asia (Kearney, 1984). IMF suggests that Africa’s policymakers should focus on reducing the national budgets particularly the house subsidies for electricity and fuel and use the money to aid in sustaining its growth during the international financial slowdown.
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One of the major trading partners of Africa is the European Union. Nevertheless, in the past decades, China has been among Africa’s major trading partners especially in the financial sector, minerals, and oil. China has an interest in Africa because of its natural resources such as energy. However, China admits that Africa is in the process of growing and will later become a large market after India and China. China takes a long-term view that Africa will grow tremendously. As a result of this, China has amplified its investment and trade with Africa (Kearney, 1984).
“ When in Rome, Should You “Do as the Romans do”….and Feel Comfortable about it?
People are now traveling overseas either for vacation or work. Therefore, this becomes challenging when people have to decide whether to follow their culture or adapt to the new culture of the foreign nation. However, with some indigenous practices, these people have no choice rather than embracing their culture. When driving in Britain, one has to follow the left side of the road. For some native practices, this may not make sense. To other practices, this may seem redemptive. For the Japanese, they protect their delicate tatami mats by taking away their shoes (Kearney, 1984). At some levels, these customs may conflict with the legal and moral standards of home nations. For example, one may be from a country where marijuana is illegal and only legalized when used for medical purposes. Therefore, this raises a question as to whether one will visit marijuana coffee shop when one is in Amsterdam (Kearney, 1984). Another example of how these customs conflict with people moral and legal, standards is when one is an American and observes the drinking age of 21. This raises an issue as to whether a person will drink in areas where there is no drinking age. Further, at the business level, one will be having a dilemma of whether to follow the corporate tax laws of their home country or that of the locals. All these practices raise questions such as when one is in Rome should he or she do as the Romans do and still feel comfortable. This may be comfortable for some people and vice versa.
Reference
Kearney, M. (1984) World view Chandler & Sharp Pub.
