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Answers The Questions Differences Benefits Associated Global Trade (Essay Sample)
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Global divide is generally a term that shows the differences in benefits associated with global trade. Global trade involves free movement of goods, services and people across the world. However, the economic benefits are mostly enjoyed by western countries compared to developing and poor countries. In developing countries, the main economic issue is poverty and the market has failed to provide the goods to lift people out of poverty, (Yeglin, 2003). Although we are on the same planet, there is absolutely extreme variation in material wealth between people in the west and developing countries.
Poor structure of capitalism is the main factor hindering developing countries from enjoying benefits of global trade. This deprives the people the opportunity to acquire mortgages, credit and loans used in private enterprise development. The capitalism structure works so well in western countries because it integrates elements such as property rights, (De Soto, 2011). Proper structure of capitalism will ensure developing countries benefit from global trade, because capitalism is essential a tool for prosperity. Furthermore, availability of international peace is crucial promoting open – markets, which are the engines for economic growth.
Paper wall theory describes the common challenges faced by people in developing countries to prosper economically. People in the western countries have superior legal laws; businesses, identity and property are properly documented and legally defined. Instead, the costly legal systems and discrimination behavior in poor countries has deprived them the legal tools they need to prosper. As a result, most people in developing and poor countries exist outside the legal system, (De Soto, 2011). In these countries, the assets of people cannot be seen to be economically useful. They are not liquid enough to create capital and people are not held accountable in business contracts. In addition, the poor cannot control their business risks through limited liability. Furthermore, they are not interconnected and transactions cannot be made easily.
“Snake kids” refers to children as young as 8 years old who work in gold mines in Tanzania. These children work in the gold mines hoping to improve their lives but find themselves stuck in the mines endangering their lives, (Morna, 2013). Most of them work in the mines because they are orphans or lack the basic necessities to survive. These children risk physical injury and long-term health damage due to exposure to mercury.
According to Yunus (2012), poor people are not creators of poverty. Instead, poverty is created by the capitalism system built globally. The poor people have as much potential to succeed as the rich people. Capitalism structure should be changed from profit seeking to dealing with real issues of poor people. The poor people can pay loans offered to them by banks if they can be associated with low social interest rates (low rates) rather than business interest rates.
Through his initiative of providing capital to the poor people, Yunus started the Grameen bank. The bank offers loans to poor people at low interest rates. Furthermore, the bank uses trust as collateral rather than material collateral. Since two thirds of world population does not qualify for bank loans...
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