Posted: December 30th, 2021
Compose a 500 words assignment on growth and development of global economy. Needs to be plagiarism free! Growth and Development of Global Economy – Economics and Section # of Growth and Development ofGlobal Economy – Economics
The global trade arena with regards to cotton import/export in contemporary times involves players from the diametrically opposite nations of the world in terms of development, i.e. the USA and the West African nations along with other nations of the world such as China. The major concern in this field are the negative externalities emitted by the US subsidies allotted to its domestic producers in order to make their yield appear competitive in the global market, but this move on part of the US government harms the West African nations which depend on cotton export for livelihood and a tool which could trigger economic growth. On the contrary, they are stuck in the vicious cycle due to the US subsidies which crowds the efficient producer’s market, since without subsidies the US cotton production would not be economical. The US government harms the poorer nations through subsidizing their own domestic cotton production more than it helps them through foreign aid, as proved by statistical data in The Oxfam Briefing Paper (Oxfam International, 2004, pages 1-40). The subsidies does not only affect the Balance of Payments, but has a trigger down effect, it lowers the income of farmers, thus reducing the income available for expenditure, further strengthening the economic crisis by lowering aggregate demand, the multiplier sets into a negative action, and poverty sets in, thus making West African nations vulnerable to US cotton subsidies, furthermore in accordance with Anderson and Valenzuela (Anderson and Valenzuela, 2006, page 19) the usage of Genetically Modified Organism for the cotton production in developing nations would have a greater positive effect than eliminating subsidies completely. However, since it is a time-consuming process to convert every small farm to GM technology, hence from the West African nation’s perspective, the USA should eliminate its cotton subsidies in order to aid the developing nations in coming out of the economic crisis and poverty situation.
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