The free trade has been beneficial for some countries, but has left developing nations in a perpetual state of struggle. According to Kamal Ahmed, who is a specialist in the field of Economics and a journalist for the BBC, a report published by the World Bank highlighted the fact that such trades might lead to wage differentiation.
The internal memo also states that while such ventures create a lot of job opportunities and many advancements in economies, every pro still has its cons.
“While trade may have contributed to rising inequality in high-income economies, so has technological change and the weakening of institutions that used to represent the interests of labour,” highlighted Kamal Ahmed from the document. “Given overall efficiency gains, the dislocation effects of trade in advanced economies must be addressed through stronger safety nets and enhanced skills and flexible labour markets.”
According to Dr Jim Yong Kim who is the President of the World Bank, he told Ahmed why the developing nations dislike free trade. Dr Kim said that people have a problem with the psychology of it; they say that since their lives were not any better, so the lives of their children wouldn’t benefit either. He says such problems bring forth social security challenges concerning a vivid society of people with different mindsets – to which the government should assist and bring forth economic programs for their people, to close in such gaps.
Dr Kim also stated that if the developed nations wanted to end their poverty by 2030, they wouldn’t be able to do so because due to the stagnation of worldwide economic growth.
“We can build all the infrastructure we want and we can increase trade among the emerging market countries, [but] at the end of the day if global trade does not grow at a more robust rate it is going to be very hard to make those targets,” says Dr Kim in the interview with the BBC. “If all the developed countries close their borders, it’s going to be very difficult and it’s going to be very difficult for those countries as well.”
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