WTO (World Trade Organization)

Problems and Challenges

The challenge right now for most developing countries is how to be an industrial based economy and be successful with it and how to maximize the trade and investment that it offers. Given that trade and performance of commodity dependent economies is starting to slow down, it made development efforts for them unattainable. Another challenge for these developing countries is how to minimize their competition, since these countries offers cheap labor, their main export is labor itself. The Philippines for example is one of the countries who exports semi-conductors and micro chips, but in reality the raw materials are being imported here to have it finished and then that’s when they export it, in short the only thing that we exported is the labor because the materials were also imported from more advanced and developed countries. This kind of setting somehow worked for a few countries like South Korea and Taiwan, but for most like East Asian countries and Latin American countries, it didn’t work. They always remained from where they started and also even technological development was difficult to achieve. Another problem is that deindustrialization has been rampant that manufacturing has been ignored and production has been slow. Output wasn’t obvious and determining the amount that developing countries earn is starting to get tricky because of the labor intensive manufacturing.

Policies

For developing countries to survive the status quo, there are options to choose from in order to compete. If they do what China and India did, competition will work for them although the results wouldn’t be shown immediately. If developing countries would maximize the use of their laborers to manufacture and industrialize, being in the first stage of development would be attainable, also if they rely on the domestic industries and rely less on foreign markets, in a few years they can stand on their own. Regional economic integration would help to pursue development and sustainable strategies. If there’s a chance for the developing countries to increase their tariffs and tax as well, it would be possible that they won’t be a dumpsite for the developed countries, but this is highly unlikely because WTO won’t allow it because its an organization used by hegemonic countries to forward their self interest in a more diplomatic way, so even increasing interest rates is impossible. So the best thing to do is to integrate with economic region and make a plan on how to develop, sustain, and stabilize world trade in their advantage.

Globalization with a Human Face

The article by Yilmaz Akyüz states that globalization has indeed intensified world trade, for developing countries, this means laborers, workers, and the like. Industrialization for developing countries hasn’t been attained yet so the next best thing for them is labor, which they offer in a very cheap price. Narrowing the gap between the rich and the poor countries should be the goal according to the article but we don’t see this happening because if you think about it from the grass roots level, the developed countries doesn’t really want to do this because if they do, they won’t be having countries to exploit. The last bullet point in the article says that equity, justice, and choices should be for everyone and this article was written 1999, after a decade we don’t see any changes, because the MNC’s and TNC’s owned by developed countries are the ones who are still in power, and still has the say. Their Corporate Social Responsibility in developing countries is not practiced that much because they decrease the level, so instead of helping the countries to developed they just allow it to stay as it is and not upgrade it. Competitive Market was the goal during 1999, and until now it is the goal. Yes, maybe people everywhere are now connected, maybe what we have right now is a borderless world, we feel the recession of developed countries or some sort, but they don’t suffer the same. So, leadership should come from who? If they allow the developing countries to take the lead to sustainable development and assist them, maybe living in a borderless world is something that everyone would want to have.