Economics Article Commentary Essay Example | Topics and Well Written Essays - 750 words

Economics Article Commentary - Essay Example The author compares East Asian markets like South Korea, Hong Kong, Taiwan and Singapore which have grown under the control of their respective governments. Even the US markets which promote free trade have some participation of the government. Market liberalisation has resulted in adverse effects on the poor in the developing countries. In such countries, agriculture is the main occupation of majority of population. Agriculture sector allows the import of cheap products in the local markets. Small scale farmers of the developing countries like Ghana, Kenya are not able to sell their produce in their own countries and have to pay more for the farm needs. Free trade gives far more powers to the traders outside the country who make sure that in addition to the cheaper imports of their own products, exports of the country are bought at cheaper prices which eventually hits the local agriculture sector. This results in the exploitation of the poor farmers. Small scale farmers are losing their lands to richer sections of the society. Liberalisation is forcing gender inequality and unemployment. Market liberalisation is also affecting the environment. Earlier crops were grown according to soil types and climate. There was a vast diversity of the crops grown all round the year and in different regions. While now the concentration is on the growth of the cash crops fit for the export. Crops that are suitable for export are grown on a large scale affecting the environment conditions resulting from soil degradation and extensive use of chemical fertilizers and pesticides. As government does not interfere, all the support offered by the government to the small scale farmers is also lost such as subsidies, agricultural research, price control and so on. Free trade also hampers the self-sufficiency of a nation on its own production. Traders establish monopoly in the local markets.For overcoming this problem, governments should have selective intervention in the markets. As mentioned earlier East Asian markets like South Korea, Hong Kong, Taiwan and Singapore have benefited from the participation of government in controlling and managing the markets. Government decides the policies and restrictions such as investment tariffs and various taxes to be imposed on the foreign trade in order to protect the domestic trade and attain maximum benefit from the international commerce. Governments tend to maintain price stability and balanced growth keeping in mind the interests of every section of the society. Some of the steps the governments can take are: open an d fund government banks, promote savings, subsidised credit for the industries, investment in technological developments, promotion of export and protection from imports that can affect domestic produce. Governments provide aid to small scale farmers and declining industries. The main focus lies in the capital accumulation and labour literacy. The administration should selectively intervene to control the inflation. Public and private sectors must be able to share the information. Extensive exports and huge foreign investments regulated by government can boost up the economy. These are the steps taken by the governments of East Asian countries that resulted in their miraculous growth. US markets also support free trade but government plays an important role as well. Agriculture sector needs aids from the government and US government provides financial