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A prime example of a disaster involving free trade and development was the African catastrophe. In Tanzania a shoe factory was created and was supposed to be the world's largest being able to produce four million pairs of shoes a year with three million being exported hoping generate large sums of profit. The profit generated was meant to be used to pay back the World Bank and to boost the country's economic development. Tanzania's disaster continued to get worse with the government and the World Bank creating miss calculations and poor planning of the construction and necessities needed for this factory to run accordingly. These miscalculations were evident after assessing the factories shoe completion average. "It never turned out more than 4 percent of its capacity, at its best a few hundred pairs of shoes a day" (Frieden 2006, p. 449). The extremely high price of electricity in Tanzania, the poor quality of local hides, its high tariffs on imported materials, and the scarcity of labour capable of working modern assembly lines all contributed heavily to the factory creating hefty deficits and proceeding to be closed down due to the poor infrastructure and large amounts of debt (Frieden 2006, p. 450).
One of the largest differentiations between Tanzania (East Africa) and the East Asian countries which responded extremely well to trade and development such as South Korea was the connection that they had with the US alliance system. This was a big factor in why South Korea could export to the US market and the US would not punish them for an undervalued currency rate. The US pressured these countries to move towards more outward oriented policies. South Korea also protected their industries by having very high tariff barriers where as Tanzania did not. They had large tariff barriers on imported materials which evidently contributed to the collapse of the shoe factory stated above.
Evidently, free trade is not the final and correct answer to development. Factors such as health and education, government status, alliances, and mentors all play just as an important role as the economic side of development does. Yes, revenue and profit can aid several third world countries towards development however it can also be detrimental and cause conflict, a spread of illness due to poor labouring conditions as well as corruption or an unstable government. These corporations such as the World Bank need to stop pumping money into these third world countries as it can fall into the wrong hands and not become beneficial to the community. Instead they should send advisors to create a plan and aid these communities through it and focus on the basics such as health and education to provide a stable basis for the developmental process to begin. Evidently if completed successfully many rewards can be drawn which can be seen in the East Asian successes.
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