Order from us for quality, customized work in due time of your choice.
Introduction
Klares book Rising Powers shrinking Planet provides a descriptive analysis of the problems that are associated with oil unless the trend of energy use is reversed. According to Klaire, oil is a scarce commodity that is mainly found in the Middle East. This commodity is therefore very expensive due to its high demand and this has led powerful countries like Russia and USA to get interested in this commodity. The author argues that it is only through international cooperation that the commodity can be used sustainably. On the other hand, Barnets presentation on The Pentagons New Map is an analysis of the grand strategy employed by America in matters relating to foreign policy. Most of the policies set forth by the American government are meant to ensure that it remains a superpower. The scenario presents a situation of emerging differences in per capita income between the developed and developing nations as discussed in this paper.
Discussion
The politics surrounding economic policy reforms have majorly affected the distribution of wealth in many of the developing countries. This phenomenon applies more in domestic politics but also in international politics. For instance, one of the economic policy reforms that were formulated to assist developing nations is the regulation of trade policy. According to Betts (26) one of the changes introduced in this policy was changing it from protection to openness. Such form of shift and its reverse was associated with many changes in the world of trade. It therefore resulted in the distribution of gains and losses across sectors of the economy, classes of people, and across different ethnic communities. The trade shift resulted in the disruption of the economies of the developing countries which are characterized by internal conflicts, corrupt political leaders and large disparities in wealth distribution. As a result, in form of liberalization or even trade takes place in a place that is polluted with bad politics. There are specific factors that determine the nature of trade policy reforms especially with respect to liberalization. Such factors are responsible for the rate at which developing countries overcome their debts.
Factors that determine the success of developing nations
Country size
Small countries are likely to respond to liberalization faster than bigger countries. An example of such countries is Sri Lanka which was the first country to be liberalized in Asia before the ethnic conflicts had affected it. Some of the African countries which stood out in the ethnic conflicts were: Mauritius and Botswana. According to Klaire (106) the economic and political reforms of a small country are considered to be easier than large countries because these countries do not depend on the world economy. As a result, the interests of the countries are considered to be in-looking and protectionist inclined. Reforms in large countries had to be instituted due to nature of the land size and when instituted, they are done sluggishly. However, China is an exemption in this category because it is the most populated country in the world yet it has the highest record of economic performance among the worlds large countries. Other large countries like Brazil, South Africa, Russia, Egypt, and India have low economic reforms when compared with small countries that are in or close to their regions.
According to Barnet (58) large developing countries have policies that fail to bear in mind the interests of the people who live in marginalized areas of the respective countries. This problem is very common in Africa where the marginalized communities are very few and therefore lack the ability to vote for the leaders to represent them in the government. The marginalized communities live in areas that are endowed with resources like rich agricultural land and minerals. Such areas can be very productive if they are exploited well or provided with water for the case of agricultural land. However, due to poor politics and weak economic policies, such areas remain under-developed since the people are not well represented in the government. On the contrary, the community that has the majority of people benefits more from government resources since such a community is able to elect its people to represent them. The end effect of political move is that the marginalized communities remain poor and depend on the large communities for help.
Institutions
Institutions are the governing bodies that are responsible for formulating formal and informal rules. The different forms of rules considered in the case of economic reforms are those that deal with: corporate governance, financial market regulation and competition. According to Betts (27) there are also informal laws that deal with norms and traditions that influence the world of business and the government too. Institutions and policies are inter-connected in that it is not possible to have good institutions if the policies are not good. Institutions are responsible for governing the trade policies in both developing and developed nations. The policies in the developed world have made such countries to be more liberalized and have made them join the globalized world easier than the developing nations. Such nations have reduced trade and Foreign Direct Investment barriers (FDI), and their trading sectors perform better as compared to the developing nations. In addition, the judiciary, the public administration sectors perform fairly well due to reduced levels of corruption.
The developing countries that have strong institutions are for instance Chile in Latin America, South Africa, Mauritius and Botswana in Africa and some few countries in North-Eastern Asia. However, large developing countries like India, Indonesia and Brazil have weak institutions making them be listed among the mentioned countries. According to Klaire (47) the business climate indicators by the World Bank indicate that there is huge policy and institution difference among the developing nations. The indicators also indicated that generalizing the linkage between the political and economic policies of reform is a difficult task. The developing world has witnessed globalization taking place in both democratic and authoritarian environments. China is an example of such a country that underwent reform from the early 1990 during the short-term authoritarian regime. In other nations like Russia, the growing economic reforms reversed during the authoritarian regime of President Putin.
Factors Endowments
When mentioning policies for economic reforms, it is worth mentioning factors such as land, capital and labor. These factors are called the factors of production because they determine the level of production in any economy. According to Barnet (7) the developing countries which have shown high rates of economic reforms are those found in East Asia. However, most of these countries had a slow start in economic growth. In later stages, labor became abundant and was utilized in various labor-intensive manufacturing activities leading to the production of export goods. These activities were very successful to the extent that they became the center for economic growth which in turn led to poverty reduction and improved the lives of the people. This whole exercise was not easy without the availability of the right policies and institutions to facilitate it. That was the reason why some parts of south Asia remained in poverty because the right market-based policies were not adopted in spite of it having similar conditions as the East.
On the contrary, countries in Latin America have land implying that there are abundant resources but there is no labor. However, due to the lack of import substitution policies, countries like Brazil, Chile and Argentina remained in the agricultural production sector and depended on commodities manufactured in China. This implied that in the 21st century there were comparative trade gains for the western countries which had abundant capital, East and South-Eastern countries which have adequate labor and other countries which had abundant land. According to Betts (62) the political economy has had numerous impacts on factor endowments. Structural disadvantages have therefore affected countries that have abundant land than those that have abundant labor. Activities that are labor-intensive have the ability to attract DFI and any technology or skill associated with it. This results in the FDI being fed into the process of reducing poverty, improving the welfare of the people and better infrastructure. On the contrary, nations that have abundant land require expensive labor and which is not affordable thus eliminating them in the export market which is mainly dominated by China.
Conclusion
This paper has found out that the developing nations remain under-developed even after the trade reform policies were introduced. In the oil sector, Klaire discussed the cases of oil in the Middle East which is highly valued and thus countries like America have shown interest to control its extraction. It has been found that the United States government has shown interest in controlling the oil industry through military involvement in the name of peacekeeping to end violence.
Works Cited
Barnet, Thomas. The Pentagons New Map . 2008.
Betts, Richard. Conflict after the Cold War: Arguments on Causes of War and Peace. 3rd Ed. New York: Longman Publishers, 2008.
Klare, Michael. Rising Powers, Shrinking Planet: The New Geopolitics of Energy. London: Holt Publishers, 2008.
Order from us for quality, customized work in due time of your choice.