Effects of world economic politics to Australia Essay
World political economy can be defined as a political process of interaction between countries in world transform local phenomena in to global perspective. Mostly, this interaction comes up as integration of sovereign state for economic benefit based on trade and commerce. In Australian context, world political economics is interaction between Australian-nation and the rest of world. World political economy is the transformation of the Australia-nation phenomenon into global perspective.
This interaction has been promoted in rationale of giving Australian-nationals a form of interaction with the world which in most cases in commercial, foreign investment, migration of man power, capital flow as well as sharing of technology. On other hand, world political economy interactions allow Australia partners in trade to be able to get in Australia and do business freely. These have been achieved through liberalization of market which has been achieved through Australian authorities negotiating with its trade partners for a more regulated trade.
In a nutshell World political economy to Australia can be viewed in perspective of globalisation which has positive and negative impact in Australian economy. Globalisation is world political economics which seeks for integration of the whole world in commerce, communication as well as transport networks across the world. Theoretically, globalisation has been viewed as a way of economic empowerment but its aftermath is marked with economic crisis. In Australia, unemployment crisis is a good example of result of world political economics in the name of globalisation.
World political economic has been in existence for long time but it major impact can be traced after the Second World War. This was after realisation of importance of world peace giving reasons to have international integrations. Integration took economic perspective where countries would interact in commerce an aspect which resulted to concept of globalization. This was supported by many countries, where Australia became to part of this economic integration. Bretton Wood conference after World War II came up with institutions which would oversee the world political economic and Australia government became a member of these institutions.
These institutions included; International monetary fund (IMF) and World Bank designed to foresee development in world. Other organisations on basis of world political economy which Australia-nation is members are; General Agreement on Tariffs and Trade (GATT), and World Trade Organisation (WTO). These organisations influence world political economics through trade negotiations, pushing for market liberation, aimed at reducing the cost of doing business and promotion of a more integrated economic growth in world.
World political economy championing for globalization has resulted to a lot of change in Australia-nation hurting the economy and the welfare of the common man. Adoption of globalisation policies by Australian government has resulted to rapid change in technology making education system not to meet employment requirement and fleeing of employment through cheap imports among others (Krisztina 2006). World political economy base on globalisation has not resulted well for Australia.
Globalisation in the world economic has winner and losers. It can be said that Australia has come out of globalisation crusade as a loser, getting to the current unemployment crisis. The negative side of globalisation as a result of world political economies had led Australia to be in more problem than before. Before embracing in totality the world political concept of globalisation, Australia was rich country endowed with a lot of natural resources but freed them as per globalization concept of mobility of natural resources.
Losing of resources in the name of mobility of resources has resulted to the current problem of unemployment. Unemployment problem facing Australia today can be blamed on world political economy policy of globalisation which has squeezed people of Australia employment through liberated market. World political economics championed opening country’s borders allowing other countries to trade freely. This has resulted to Australia opening to imports resulting to loss of employments and promoting employment of foreign countries through consuming their products.
Rationale behind implementation of globalisation in the Australian economy as influence by the world political economics was the purported ‘advantages’ of market liberalisation. Proponent of world integrated economy argued that globalisation would result to increase welfare to the consumer in world. Integration of world trade would result to increase range of choice for good and service. Elimination of trade barriers means allowing imports in the country giving local people a chance to be able to choice from local manufactured commodities a well import.
Local producer would have a chance to trade their commodities in the export market with ease hence promotion of employment and development in the country. Aftermath of this would be specialization since the trading partners will only be able to produce and compete efficiently. “The trade policy breakthrough started to take place in 1973, when the government executed its 25 percent across-the-board tarrif reduction. Even though general reductions in protection were precluded in 1982, the ‘opening process’ was continued in the late 1980s, when a four-year program in nominal tariff rates was introduced for most imports.
This four year program was extended until 1991: by this time general tariffs were to be phased down to 5 percent” (Krisztina, 2006 pp. 13). World political economy would provide world wide financial markets. Australia being member of world political institution meant it could be able to source for finance for government projects. It also gave citizen a chance of participating and trading in world foreign exchange and speculative markets. Globalisation would result to a major global market where there would be freedom in exchange of good as well as capital.
This was seen as a benefit by the policy maker and proponents of integration of world economy. World political economics viewed integration as important vehicles to bring governments together through trade and be able to regulate each other to avert any threat to world peace and abuse of human rights. Exchange of expatriates and technology would be very easy through integrated economy and political world. It would as help countries to be able to share telecommunication infrastructures reaping advantages resulting from free flow of information.
These are the rationale behind adoption of globalisation concept in Australian nation. This concept has injured the country’s welfare through loss of employments greatly (Davidson, 2004). Although there may be economic benefit of world economic integration, globalisation always has taker and loser. Market liberalisation has resulted to be problematic to Australian economy. Australia-nation has come out of world political economies like a loser instead of gaining.
In the wake of globalisation resulting from world political economy has influenced changes in Government export Promotion Policy (GEPP) adjusting various policies on exports and imports. “GEPP is generally considered as variably significance part of the government’s overall trade policy. There are a number of GEPP definitions describing GEPP from fairly different perspectives, ranging from the GEPP describing of the Organisational for Economic co-operation and development (OECD) focusing only on the extra-cost-bring nature of export promotion tools” (Krisztina 2006 pp.
3). Changes in export as well as import policies have impacted negatively to Australian employment structures. GEPP mainly deals with promotion of the exports through strategising on improvement of export market support instruments. It also brings policies to promote export through giving tax incentives to export so as to influence flow of goods and services for export. GEPP policies results to formation of job opportunities since increase export mean increase in production of real goods which need human resource effort.
This means that increase export means creation of more employment. On the other hand when the country experiences an influx of imports the employment opportunities as well as growth are at risk. Imports compete with locally manufactured good making the local production to reduce. Low production translates to reduced need of man power for production of real good hence reduced employment.
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