Yevteeva+Elena

Impact of global economy and trade on Russian economy. Impact of global economy and trade on Kazakhstan economy.

The introduction into global economy. Free trade. //Never before have so many people had so much in common,// //but never before have the things that divide them been so obvious.//

 Globalization, trade and the free markets are the talks of today. Many envision or talk about a future where people of different nationalities and cultures will be able to share and trade resources across boundaries in a manner that will benefit all of humanity. But, how fair is trade  when a nation's own global trading policies together with international corporations' desire to increase their profits result in manipulate international trade pacts and agreements, so that they are most favorable for themselves? How free is the free market? Why do the poor get poorer and the rich get richer? []

 The world is becoming more globalized, there is no doubt about that. While that sounds promising, the //current form// of globalization, neoliberalism, free trade and open markets are coming under much criticism. The interests of powerful nations and corporations are shaping the terms of world trade. In democratic countries, they are shaping and affecting the ability of elected leaders to make decisions in the interests of their people. Elsewhere they are promoting narrow political discourse and even supporting dictatorships and the “stability” that it brings for their interests. This is to the detriment of most people in the world, while increasingly fewer people in proportion are prospering.

The modern system of free trade, free enterprise and market-based economies, actually emerged around 200 years ago, as one of the main engines of development for the Industrial Revolution. [] Except for religious conflicts and the petty wars of feudal lords, wars are primarily fought over resources and trade. President Woodrow Wilson recognized that this was the cause of World War I: 'Is there any man, is there any woman, let me say any child here that does not know that the seed of war in the modern world is industrial and commercial rivalry?'"

“Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed against him must be battered down. Concessions obtained by financiers must be safeguarded by ministers of state, even if the sovereignty of unwilling nations be outraged in the process. Colonies must be obtained or planted, in order that no useful corner of the world may be overlooked or left unused.” //Woodrow Wilson, President of the United States// media type="youtube" key="UKqXbSLYOm8" height="315" width="560"

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 A lot of overbearing regulations can give too much power to a few, and potentially corrupt ruling regime and prevent innovative ideas from flourishing. It can perhaps be an obstacle for a foreign nation to invest in a country due to those conditions and regulations which increase costs. However, too much deregulation can lead to corporations being able to undermine basic social and human rights as well as lead to environmental damage, often without accountability. IMF-imposed structural adjustment  and their pushes for deregulation has also led to further poverty in some countries.

 The correct balance is difficult to reach due to the inherent power conflicts between the various bodies involved. This leads to a lot of unfairness in trade and basic human rights for which the majority of people end up paying the price. Even the World Bank has cautioned  that globalization and localization (the increasing demand for local autonomy) can pose problems as well as offer benefits, if not handled properly.

 There is already a growing fair trade movement around the world, where local producers are able ta fairly trade their products. However, it isn't always easy to maintain that when globalization, in its current form, does not seem to favor those who want trade to be fair. media type="youtube" key="4tvLHDxv4B4" height="315" width="560" align="center"

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SELLING stuff to foreigners tends to be the last hope for economies whose own consumers are unwilling or unable to part with their cash. The current slump is no different, with rich-country hopes heaped on export-led growth. A new report—Trading myths—published by the McKinsey Global Institute investigates trade, exposing a number of fallacies about how trade has developed over time, the things that are bought and sold internationally, and the impact of open markets.

The first myth (some are more mythical that others, but it’s a good theme for a paper) is that advanced economies are losing out to emerging markets, so that trade deficits are ballooning. That’s not the case, as the chart below shows. In fact, the bigger story is not a myth but the mystery of why net trade is so stubbornly stable. Britain’s currency, for example, has depreciated by 20% since 2008. On paper, that should boost exports and lower imports. In reality the trade pickup has been poor.



<span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 120%;">Another myth concerns the components of trade. McKinsey reckon most people think that cheap goods—imported cars and televisions say—drive advanced countries’ deficits. The truth is that rich countries import lots of oil, gas and coal, and the prices of these have been historically high since the mid 2000s (second chart). Moreover, most advanced economies—12 out of 15—actually run a surplus for knowledge-intensive manufactured goods (pharmaceuticals and aeroplane engines, say). The big picture is that rich countries buy power, and sell ideas.

<span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 120%;">A third theme of the paper is the link between trade and employment. The report starts out by dispelling a couple of jobs-related myths. Trade, McKinsey recon, is not responsible for a decline in manufacturing jobs. The loss, and it has been significant, is more to do with increased productivity, combined with weak demand. Second, the notion that trade creates only low-paid jobs is wrong. In fact, many of the jobs gained through trade have been in ideas-intensive sectors, where work is well paid