Economic growth is the rise in a country's production of goods and services over a certain period of time compared to more than two previous periods. Additionally, it compares the Gross National Product across a two-year period. Both the current year and the year before will be covered. Technology development, the creation of improved methods for producing and manufacturing goods and services, an increase in the capital stock, and an increase in literacy rates are a few examples of economic growth. Economic growth within a nation or firm or company helps in the creation of new jobs thus improving the standards of living. Indicators of an increase in economic growth are higher incomes, the government receiving increased amount of revenues, increased investments and reduction of inflation. Economic development is the process in which a given country can improve the political, economic and social condition of its citizens (Birdsall, Kelley, and Spending, 32). Economic development will involve the relation of policies and regulation leading to a better economic, political and social growth. In this essay, I will discuss the relationships that exist between economic development and growth. Additionally, I will be giving the importance of democracy in this relationship.
Economic growth within a country means there is more abundance production. This means that there is the better production of goods and services and the standards of living of the citizens have improved. On the other hand economic development involves the creation of policies that will enable an increase in economic growth.(Eltis, 117) Additionally, economic growth is basically dealing with increase and decrease of the output of the economy whereas economic development deals with coming up with better methods of improving the output of the economy. Therefore, economic growth is co-dependent on economic development. An increase in economic growth will affect the policies made on economic development.
How important is democracy in this relationship?
Democracy provides people with the opportunity to invest and move freely with any economic locality. Take, for instance, Economist and authors believed that democracy will provide more political rights which will, in turn, strengthen economic rights. It is important to note that, with favorable economic rights, results in economic freedom thus resulting in a free enterprise exchange economy. From this discussion, it is, therefore, a fact that, democracy is accountable for the public thus providing a platform for a larger distribution of goods and services. Additionally, democracy will provide a platform in which the minority groups are protected. With this protection, there will be more investments in the factors of production leading to an accelerated economic growth and development.
Do groups like the EU/WTO hinder this democracy?
The European Union and World Trade Organization do hinder this democracy. This is because; these trade organizations are being controlled by powerful states such as Russia, United States of America. In the event that a decision is made, other countries may suffer the consequences such as countries found within Africa. Birdsall, Kelley, and Sinding (56-57) state that there are instances where the trade organizations use coercion during collection of goods. The activities involved in this activity do not favor some countries. This denies them their democratic rights leading to a slow economic growth and development.
In conclusion, economic development and growth depend on each other. This means that a change in economic growth will affect the economic development. It is, therefore, comparative to deduce, economic growth and development work simultaneously. Better economic growth leads to better economic development. To achieve a sustainable economic growth and development, countries ought to be political democratic. This will provide a platform for free enterprise environment leading to abundance in the production of goods and services. However .certain trade organizations such as the European Union and World Trade Organizations do hinder this democracy making some countries to suffer through stunted economic growth and development.
5. Corporate Social Responsibility
Describe the Concept of CSR and the place it plays in modern business environment.
Introduction
Corporate Social Responsibility is a popular concept among the business community since businesses now have the mandate to create value for their customers and stakeholder and consequently create value for the society. The concept of CSR is defined as the relationship between governments, corporations, and society in which they operate in or reside. It analyses the social, moral, legal, physical, and economic aspects of the environment. The concept of CSR requires a company to take actions beyond the legal obligations that the company has. The company needs to integrate ethical, environmental, and social concerns into the company’s business process.
Do you believe that CSR aids/ Hinders developing/developed countries?
I believe that CSR aids in developing/developed countries. In the 21st century, business has emerged as one of the most powerful institutions on the global map. There exist businesses that are bigger than some economies in the developing world. Through globalization, these businesses are expanding into new geographic locations. Through CSR policies such businesses are mandated to make significant contributions that improve the governance, environmental, labor, ethical, and social status of both developing and developed states in which the businesses operate. Business enterprises are expected to go beyond their traditional role of making profits. The business community should also remain thoughtful of predominant cultural, historical, and religious contexts (Presutti and Mawhinney, 6). The economies of developing countries are usually attractive growing markets for the business environment since these countries are expanding in terms of economic, social, and environmental capabilities. Another important advantage of CSR in developing/developed countries is, corporations under their CSR policy are required to recognize their actions that affect the external environment and they are supposed to take responsibility for the effects of their actions, therefore, this concept ensures responsibility for effects of actions taken, both external to the corporation and internal. The organizations have to develop appropriate measures of environmental performance that benefit the countries they are operating in.
Do you believe that CSR aids global trade? Why?
Globalization and liberalization have helped improve the growth rate of the business environment. Businesses in growing economies are integrating with the global economy and opening competition internationally. CSR is also an enabler for businesses in developing countries to try and enter markets in the developed world hence promote global trade. Companies in the developing regions are globalizing and they need to be compliant to the international market listing requirement. Therefore, they are able to fulfill this through numerous arrangements of CSR and sustainability performance reporting code compliance (Newell, 42). CSR in another way helps global trade since through it partnerships are possible. Companies residing in developing countries through their CSR approach can get access to new markets and partnership agreements with companies in developed countries.
In conclusion, CSR policies play a crucial role in the business environment as it enables the ability of a firm to achieve a competitive advantage. CSR also aids in developing/developed countries as businesses are forced to comply with the business ethics, human rights, job creation, and community development.
6. World Trade Organization (WTO)
Discuss the role that politics has in World Trade
Introduction
World trade may have different definitions. World Trade can be defined as the trading activities that take place within and across the globe. It is also known as international trade. World Trade involves many countries across the globe. World Trade may involve the exchange of goods and services between continents. World trade is regulated by an organization known as World Trade Organization. This is an organization providing policies that regulate any trade activity that happens within the member states of the organization. With these policies, every interest of the member country will be addressed at a neutral level. This will ensure that there is no discrimination or unscrupulous trading activities happening against the agreements put in place. However, there are many factors that affect the world trade such as currency value, Inflation, politics amongst other factors. In this article, I will be discussing the following; the role of politics in the World Trade and my opinion on the current discussions taking place in the United States of America in regards to trade are sustainable in the long run.
Politics play a major role in World Trade. Politics in World Trade is to provide leadership. This leadership will ensure that there is proper negation that is presented during trade agreement amongst member countries. Through leadership, there will be policies enacted to safeguard the interest of each member country during participation. Politics will also provide a platform of trade regulation. (Deese, 224) This will ensure that there are proper channels to be followed as stipulated by the trade agreement.
Do you believe the current discussions taking place in the U.S. in regard to trade are sustainable in the long term?
One of the current U.S. trade discussions is on Trans-Pacific Partnership (TPP) and Free Trade Agreements (FTAs) and. These agreements were made by former U.S President Barack Obama with South Korea, Panama, and Colombia. However, President Donald Trump has overturned the TPP agreement and U.S. has withdrawn from the agreement. President Trump argued that multilateral talks would not favor the U.S. economy, therefore, his administration would consider bilateral trade deals. Other advocates who support President Trump suggest that such trade agreements would be disadvantageous to the labor market in the U.S. and will also degrade the country’s manufacturing base.
I do not believe that these trade discussions are sustainable in the long term. The Trans-Pacific Partnership was important for the United States as it helps create jobs for the U.S citizens by opening new international markets. In addition, I argue that the agreements make it easier for U.S based companies to compete in the foreign markets.
Are there lessons from history that need to be considered?
Yes. There are lessons to consider such as agreements that exist such as General Agreement on Tariffs and Trade (GATT). This agreement engaged 23 countries in October 1947 (Chase, 625). The number of members in the agreement has increased over time, due to the benefits of the agreement. The member countries are committed to establishing free trade, open economies, and lower tariffs (Chase, 626). As a result of the agreement tariffs on global imports has significantly dropped from an average of 30 percent to below 5 percent.
In conclusion, the United State should not have withdrawn from the agreement of Trans-Pacific Partnership as it would have benefited the country.
Works Cited
Birdsall, Nancy, Allen C. Kelley, and Steven W. Sinding. Population Matters: Demographic Change, Economic Growth, and Poverty in the Developing World. Oxford: Oxford University Press, 2003. Print.
Chase, Kerry A. "The Evolution of the Trade Regime: Politics, Law, and Economics of the GATT and the WTO." Perspectives on Politics. 4.3 (2006): 625-626. Print.
Deese, David A. World Trade Politics: Power, Principles, and Leadership. Milton Park, Abingdon, Oxon: Routledge, 2008. Print.
Eltis, Walter A. The Classical Theory of Economic Growth. Basingstoke: Palgrave, 2000. Print.
Newell, Andrew P. Corporate Social Responsibility: Challenges, Benefits, and Impact on Business Performance. New York: Nova Publishers, 2014. Print.
Presutti, William D, and John Mawhinney. Understanding the Dynamics of the Value Chain. New York: Business Expert Press, 2013. Print.
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