Academic Paper: “Commerce and Certain Policies Benefit the Development and Growth of Developing Countries”

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| Theories and Policies of International Trade
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DATE: May 23rd 2013
TO: Veronica Querejazu
FROM: Ignacio Orihuela Navarro
SUBJECT: Academic Paper: “Commerce and Certain Policies Benefit the Development and Growth of Developing Countries”

Introduction:
The main goal of this Academic Paper is to identify possible trade policies that allow countries like Bolivia to take advantage of the economic and social potential they have. To show how certain policies have been successfully implemented in different economies across the years and how they have shown to have positive impacts is a vital part of the paper. Another objective is to show with some examples how commerce with “the hand” of some policies is able to transform different economies and give us solutions and hope for a brighter future. There is a historic and geographic and demographic background that surrounds some cases in which certain policies were seen as positive. Finally as a conclusion, some recommendations that were found to be potentially very important. Better living standards, human indicators and more economic development are always main goals which can be achievable if some recommendations are transformed into actions. Theoretical Framework/Development of Ideas

If we compare in a general view the economic and social development between the Developed and Developing economies, the gap is huge. However, as time goes by, the gap is becoming more and more little. Developing nations are gaining more power, weight and influence in the international context. Most of developing countries have a really high potential of growing in the economic and social aspect. There are some like Malaysia or Thailand who have already started to diminish “the gap” with developed economies. These countries have been developing other types of regular trade and have been facilitating trade platforms which makes them able to take advantage of the potential they have. One example is Thailand; “E-COMMERCE is starting to find a place in some of the world's emerging economies; Governments and businesses in a growing number of developing nations have begun building the infrastructure needed for online commerce, Thailand, for example, is starting to see results from a government strategy that began in 1996 and was updated in 2002.” By the other hand, there are some countries like Bolivia or Angola, which have great potential but they need to observe what other developing nations are doing , pay attention on different recommendations they receive and learn from past mistakes. If countries like us try to apply the same policies or trends used in Europe, probably results will turn out to be negative. One example is fiscal austerity. We all know Europe´s recession. Attempts to overcome crisis are dominated by fiscal austerity joined by “flexibilization” of the labor markets. The UNCTAD reports posses that these policies in practice “means wage restraint and in some cases massive wage reductions. However, these policies are more likely to further weaken growth dynamics and increase unemployment instead of stimulating investment and job creation. At the same time, as has been demonstrated with similar structural reform policies in the developing world over the past 30 years, they will also serve to reinforce the trend towards greater inequality.” If countries like Bolivia try to apply the same policies as Europe, probably they will have negative impacts in the economy because we have different geographic locations, economic development and we face different conditions. Instead of trying to analyze everything that developed nations do, we should try to analyze how more advanced developing countries than us perform. Advanced developing countries face the International Context with certain conditions which are similar to our conditions. Low wages, dependency on international prices or unequal income distribution. The relationship we...
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