Reforming Global Economy

Reforming the global economy is one of the most challenging elements
since it involves an evaluation of what ails several economies and not
just one economy. However from the understanding of universality of the
economic fundamentals, global policies that impact on macroeconomic
outcomes of all global economies can be formulated to achieve the
objective. This objective would be not only to reform global economy but
also promote equality in the rates of growth and income distribution. In
light to this objective, this essay will discuss the ways of reforming
global economy as proposed by Mosley Layna. This essay also seeks to
explore the rationale for reforming global economy and evaluate the
arguments presented by Mosley.
Synopsis
Mosley describes the history of the global policies relating to trade
agreements and International Trade Organization. Mosley (74) discusses
the roles of international trade agreements of GATT and the need for the
World Trade Organization. The main element of these negotiations was to
ensure fair and open trade policies and negotiations but in reality
these policies did not achieve their objective. In addition, Mosley
further discusses the elements of ownership of global resources that has
shaped the unfair trade relations that needs reforms if global economic
reforms were to be successful.
Mosley presents strong cases on the need for globalization of economies
by discussing historical events that have shaped the need for global
economic reforms. Mosley presents the case of inequality in global trade
and economic policies that favor the developed countries and stronger
world trade blocs only. Mosley illustrates how the developed countries
and trade blocs unfairly engage in trade negotiations and adopt double
standards in advocating for economic equality. In particular, Mosley
(78) illustrates that the United States and European Union present
advocacy for equal economic policies while on the other hand, engaging
in unequal policies that favor their interests only. From the
discussions of Mosley on this perspective, it is evident that the global
economic policy needs critical reforms to promote equitable economic
growth.
Mosley also discusses the practice of developed countries to maintain
special interests in their economic policies and relations with other
countries. Mosley describes that in addition to the unfair practices,
the developed countries have adopted mean policies that are meant to
protect their special interests. These special interests are
particularly focused on the developed countries and are not formulated
for the benefit of trade recipients but the developed countries only. In
associating with developing countries, the United States and the
European Union countries have tried to exploit these economies through
policies that are palatable to the developing countries such as
liberalization (Mosley 78). This way, reforms in the global economy
would mean introduction of economically open policies that are based on
market forces and not special interests of the developed economies.
Embrace of greater economic openness when establishing global economic
policies is an important element of reforming global economy discussed
by Mosley. Mosley (108) argues that greater openness at the economic
front assures governments of a positive economic outcome especially
those resulting from their policies. It is also a critical factor when
formulating trade association policies and when adopting foreign
relation policies. Through an open trade and economic negotiation, a
government is able to understand the elements of any global economic
policy. According to Mosley (108), developed countries were more open in
trade affairs in the 1970s and 1980s and global economy was more stable
at the time. However, this phenomenon has changed over time which
explains the current global economic situation. It is therefore
important to reform the economy by promoting greater openness in
economic policies.
In terms of trade restrictions, Mosley discusses the unfairness of the
policies adopted by developed countries. In particular, Mosley points
out that developed countries formulated the most unfair policies to
developing countries four times more that they are unfair to themselves.
These trade restrictions and policies are yet to change and may not
change due to domination by the developed countries at international
level. Mosley (78) describes that these policies are not easy to change
since most of the countries that make the decisions at international
trade agreements are the developed countries. Mosley (103) further
illustrates that developing countries do not present stronger interests
to enjoy free trade opportunities with developed countries as he uses
the case of Morocco and United States.
Mosley further discusses the inequality of the distribution of the world
income and economic output. As usual, domination by developed economies
is highlighted but the focus is on capital flows, flow of labor and
ownership of property rights. In particular, Mosley describes that
seventy percent of the benefits of the world output goes to the
developed countries at the expense of the developing countries. Mosley
(78) further illustrates that of the thirty percent shared by the
growing economies, over 85% of it is owed to the middle income economy
countries such as Brazil.
Agreement and Disagreement
In an agreement with Mosley, aligning the global economic policies with
the macro-economic rates of all the countries is a critical rationale
for economic reforms. This is because reforms will introduce economic
policies that consider the challenges of all countries particularly the
growing economies that are forced to conform to macroeconomic policies
of developed countries (Mosley 110). One of the main challenges to
growing economies is how to handle the effect of globalization in their
own macro-economic space. They are challenged to formulate policies that
are compatible with global economic policies and market trends.
According to Mosley (107) incompatibility between the welfare of several
economies to economic globalization presents potential challenges.
In additional agreement to Mosley’s argument that global economy lacks
equality and has no policies favoring all players. In my own
perspective, the world economy seems to be totally dominated by the
developed countries and there is no much room for developing economies
to create any influence. Almost all the economic policies are favoring
the developed economies both in trade and in relations. This explains
why there is a consistent inequality between the two extremes of the
economic growths. In addition, most developed economies have been
powered by developing economies of third world countries who supply raw
materials at low cost and access restrictions. These same developing
economies are the market places that have powered the economies
developed countries to dominate the world economies.
In disagreement with Mosley, I believe openness in trade cannot be the
reason for current economic situation and cannot be a key reform
determinant. I believe one of the main elements of reforming global
economy would be to enhance formulation of fair and consistently
equitable global economic policies that favor all the economies. This is
in the light of domination of the world economies by developed economies
over the developing ones. This is evident in the current economic
policies and market formulations that favor developed economies at the
expense of developing economies. This way, introduction of rational
economic policies that are meant to reform the current economic policies
will be important as suggested by Mosley (108). In disagreement with
what Mosley (108) illustrates, fair economic policies and not openness
will be friendly to governments when establishing competitive economic
policies.
In addition, it is notable that Mosley omits the element of consumption
in his illustration of ways and rationale for globalization of
economies. It is important for global economies to consider increased
consumption as a solution for reforms in economic policies. Establishing
policies that encourage global consumption will create a multiplier
effect that will shape trade ties and international policies. Through
consumption, world economies are fueled for growth and through the
introduction of operational policies, consumption becomes the sole
element of growth of the world economies. This is the main element that
shapes demand and supplies for goods and services thereby introducing
international trade as discussed by Mosley.
Conclusion
What Mosley discusses is the real facts of the current global situation
that is dominated by the developed economies. Mosley describes the
history of international trade agreements and elements of economic
globalization that need reforms to promote global economies. In
agreement with Mosley, I maintain that developed countries are mean and
unfair trade policies that are focused on maintaining the interests of
the developed countries in exploiting the resources of the developing
countries. However, Mosley should have included consumption as an
important key to opening economic polices. In addition, it is only
fairness of the policies and not openness that will help reform global
economic situations.
Work Cited
Mosley, Layna. Making Globalization Work.
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