The international economic order refers to the system of rules, institutions, and practices that govern international economic relations among countries. Like any complex system, it has both pros and cons. Here are some of the key pros and cons of the international economic order:
Pros of the international economic order:
- Global economic growth: The international economic system has facilitated increased global trade and investment, leading to economic growth and improved living standards in many countries. It has created opportunities for countries to specialize in the production of goods and services they have a comparative advantage in, leading to efficiency gains and higher productivity.
- Reduced poverty and inequality: The international economic system or order has contributed to poverty reduction and the narrowing of income gaps in many parts of the world. Increased trade and investment can create jobs, increase incomes, and provide access to new markets, thereby lifting people out of poverty.
- Technological progress and innovation: The inter national economic system has facilitated the transfer of technology, knowledge, and innovation across borders. Globalization has allowed countries to benefit from technological advancements made in other parts of the world, fostering productivity growth and driving economic development.
- Cooperation and peaceful relations: The inter national economic order has encouraged cooperation and peaceful relations among countries. Economic interdependence created through trade and investment can incentivize countries to resolve disputes through negotiation rather than conflict, as they have a shared interest in maintaining stable economic relations.
Cons of the international economic order:
- Inequality and uneven development: The international economic systems have contributed to global economic inequality, with some countries and individuals benefiting more than others. Developing countries, particularly those with limited resources and capabilities, may face challenges in fully participating in the global economy and can become marginalized.
- Vulnerability to financial crises: The international economic order, characterized by financial liberalization and capital mobility, can make countries vulnerable to financial crises. Rapid capital flows, speculative investments, and financial contagion can result in severe economic disruptions, affecting both developed and developing countries.
- Loss of sovereignty: Some critics argue that the international economic order, particularly through international organizations such as the World Trade Organization (WTO) and the International Monetary Fund (IMF), limits the policy autonomy of countries. The enforcement of trade rules and conditions attached to financial assistance may be seen as infringing on national sovereignty.
- Environmental challenges: The international economic system has faced criticism for its impact on the environment. Increased global trade and production can lead to resource depletion, environmental degradation, and climate change. Some argue that the pursuit of economic growth and competitiveness within the existing order has not adequately accounted for environmental sustainability.
It is important to note that the pros and cons of the international economic order can vary depending on different perspectives, interests, and experiences of countries and individuals. Moreover, the international economic order is dynamic and subject to ongoing debates and changes over time.
ISSUES IN THE NEW INTERNATIONAL ECONOMIC ORDER
There have been a lot of imbalances and economic problems created as a result of the groupings of the various countries into developed and developing nations. The developed nations are highly industrialized with favourable terms of trade and balance of payment positions.
The developing countries are frustratingly depending on the developed countries for their survival owing mainly to the primary production nature of the developing nations. Under this situation of dependency, there is a tendency of serious exploitation of the developing nations by the advanced ones.
This feeling of complete domination therefore by the developing countries gives rise to the agitation for protection which eventually gives rise to the formation of the New International Economic Order to provide succour to the developing nations of the world.