International Trade And The Global Marketplace

1428 WordsApr 29, 20176 Pages
Globalization has huge influences on economies as many countries are engaged to international trade in order to achieve economic growth, free trade agreement and financial liberalization has contributed to the opening up of world economies and resulted in more international trade. Countries use their comparative advantages to gain a positon in the global marketplace and achieve economic growth (Seyoum 2007). International trade is a critical resource of revenue earning for developing countries. However, the benefits realized from free trade are mostly enjoyed by developed countries. In another word, developing nations are actually at a competitive disadvantage when it comes to international trade (Ghani 2009). In this essay, it will…show more content…
These industries are integral to the economic growth of developing countries because they provide employment in the local labour market and increase household incomes. Cottage industries do not rely so much on skilled labour, therefore, it creates employment for many unemployed in these countries. The population of the African country continent is increasing rapidly, and it has to create employment for the high number of young people joining the labour market. According to the World Bank, the continent has to create 50,000 jobs daily until the year 2035 to keep up with the pace of population growth. If that does not happen, Africa will experience skilled workers seek employment opportunities in developed countries, further condemning the continent to slow growth and limited development (Yanikkaya 2013). Cottage industries can help solve the challenge of unemployment and reduce the problems associated with many people living below the poverty line (Fazeli 2008). Africa has recently been flooded with cheap Chinese goods as China seeks to achieve more economic growth through international trade. The situation spells doom for local industries as developing countries cannot match the technological capabilities of China to compete with it in the international marketplace (Madavo 2007). It is also raised the issue of how the use of comparative advantage in international trade actually benefits the world economy. It may be a major contributing factor to the poor
Open Document