How the Lack of Technical and Financial Means Prevent Sustainability in Developing Countries - Essay Example

Running Head: Technical and Financial Influences on Developing Countries How the Lack of Technical and Financial Means Prevent Sustainability in Developing Countries Student Name: University Name: Trends currently show that the majority of developing countries cannot achieve sustainability because of the lack of technical and financial means. Being that the World Trade Organization (WTO) administers the multilateral rules of trade between the nations of the world, they do give special attention to those developing countries because of the influence that every country has upon one another. The WTO helps to increase trade operations, make improvements in infrastructure development, and safeguard the interests of these countries when adopting measures. The problem that these countries are encountering, in respect to technical and financial development, is that the solutions to these technical and financial issues are coming along incredibly too slow. Even when the International Institute for Sustainable Development comes into the equation, progress is still not being made to bring these developing countries closer to technical and financial success. Having the basic subsistence level is not adequate, so a solid action plan needs to develop at some point in time. Even though these developing countries seem to be on the list of agendas, there are still no policies in place and there is not much in the way of help from the richer countries to build a strong and sustainable economy. It seems that it would be in the best interest of all economies to make these developing countries part of the world economy. Since these countries have citizens who are willing to work to better their lives and resources exist that could be useful, it is truly in the best interest of the global economy to have them within an arm's reach. Development priorities There is no doubt that developing countries are on the agendas of the WTO and the International Institute for Sustainable Development. One of the priorities on these agendas is the information and communication technology sector. Developing countries that would be able to achieve success in the information and communication technology sector would be able to achieve communication internationally with other businesses and with consumers to increase income potential. Such communications are necessary for international trade and the import and export of goods. Business operations would no longer be limited to the home nation alone, but would open the entire world to what that nation has to offer. Such technological innovations would also broaden the range of stakeholders who have an interest in information and communication developments (Souter, p. 5). When developing countries begin showing continual promise, investors can find wonderful opportunities within that country that convinces them to invest money in that economy. When that money is invested, the economy benefits as well. Such actions tend to persuade others to do the same, which can then add a popular trend to investing in that particular market. The World Trade Order states that commercial interests do not take priority over development. They know that freer trade boosts economic growth and that that economic growth supports development. The debate, on the other hand, is of whether or not developing countries gain any from this particular system, but it isn't true that these countries gain nothing at all. Since developing countries are higher on the priority list, they are allowed more time to apply the high number of provisions of the World Trade Order agreements. Those that are less developed receive special treatment, which means that they don't necessarily have to follow certain provisions (WTO p.1). But there is still a deficiency that exists; otherwise those provisions in place that are required to be followed would be working. Perhaps the provisions need to be reviewed in order to give these countries a boost in the right direction and cause a snowball effect that will bring them from "developing" status to "developed." The Income Gap The income gap between poor and rich countries has increased substantially. The income statistics for many developing countries is rather disturbing and the income gap between developing countries and the more developed countries is widening all of the time. Sometimes, within the country alone the income gap is incredibly large between the rich and the poor. (iisd p.1). Brazil has one of the largest income gaps between the rich and the poor. Half of the nation's income is acquired by only 10% of earners. Other countries such as Honduras, Chile, Tanzania, Zimbabwe, and Kenya suffer rifts very similar to that of Brazil. Basically what this comes down to is the fact that poverty is so high in these countries and these figures make that fact quite obvious. The governments need to be doing something to take care of those who are not as well-off in order to boost their own economies. These issues have taken place all over the world, therefore has a negative effect on the world economy (iisd p.1). Yet again, we run into the issue of financial stability to make jobs available in these countries. There are certain trades that exist, but there tend to be more people than there are jobs available. By opening up these countries to a world economy, demand for a particular resource grows. When the demand grows, people are needed to get the job done. When the job is there, the income grows, which is why income is growing in many other countries. Despite the fact that incomes are growing all over the world, that income gap between the richest and the poorest nations keeps growing respectively. Many of these countries spend more money trying to resolve their debts to others rather than take care of the issues surrounding their people, which is why the money is usually loaned to begin with (iisd p.1). Poverty and the ecosystem Those who live in poverty and live in rural areas tend to depend on the ecosystem in order to live. Recent studies have shown that 1/5 of the income of poor rural families comes from collecting and selling fuelwoods, wild foods, and other products that are collected from the forest. Developing countries depend highly on the fish-related jobs. Fish is also the main source of nutrition for many of these poor families. This is true in such countries as Cambodia and Bangladesh (Steele, Oviedo, McCauley p.7). The fishing industry is a prime example of how the ecosystem is important in for the health and livelihoods of those who are poor. Ecosystems also provide the materials needed to sustain an economy. A lot of low-income countries have extreme potential wealth in their natural resources such as the timber industry. Their forests contribute over 10% of exported materials. These natural resources provide a large amount of the government tax revenues, which could actually be used in reducing poverty. But these generated revenues still tend to be low due to taxing that is ineffective in natural resources and too much corruption. The revenues are also used in unproductive ways rather than using them to reduce poverty (Steele, Oviedo, McCauley p.7-8) Trade and investments Trade and investment are very crucial factors in economic growth. Foreign investments are a wonderful thing. The more foreign investments there are, the better off a country's economy. Stable currencies are also a good thing for a developing country to have along with free trade and transparent banking practices (de Soto p.3). Yet some blame those in third world countries for their lack of trade and investment participation. They are accused of having a lack of entrepreneurial spirit or a lack of market orientation. These accusers think that the failure despite the excellent advice given is because there is something wrong with them; sometimes with accusations as ridiculous as their IQs being low. Yet if the explanation is culture, then that will explain why countries such as Japan and Switzerland have succeeded in many of their trade and investment practices. Therefore, the same dynamic exists for developing countries in which their cultures are not accustomed to such economical practices (de Soto p.4). What is impressive, though, is that when visiting these developing countries, you will be approached by someone trying to offer you something. They do possess an entrepreneurial spirit because they have the desire to live, so they must possess an incredible ability to sell. They have this ability to make a profit out of nothing and they have the ability to use technology because the United States is always wrestling with patents being used illegally in these countries (de Soto p.5). Some have the ability to get their hands on certain pieces of technology that gives them a little big of an edge, but not everyone is that fortunate and that is why technology needs to be spread out amongst these countries in some way. But capitalism is not making its way to these countries despite the lists of priorities sitting at the WTO and the IISD. Sometimes technology loans are given, but they are not large enough to accomplish all of the technological needs. Land ownership in developing countries Land ownership in developing countries is severely hindered. One of the questions that is asked when land ownership is considered is whether or not any one individual should have the right to own land or if the state should retain the ownership of that land. Another question that is asked is whether or not the state can identify all aspects of every single land parcel that exists (McEwen p.1). Laws related to land in developing countries should reflect the will of the people as well as the customary practices within that country. Land acquisition is usually supplemented by regulations and various acts that deal with land management and administration. Yet when funds need to be provided for a land reform project, it is required that the loan recipient abide by (McEwen p.3-4). If land legislation undergoes a comparative analysis, other jurisdictions can assist a developing country in the practice of enacting their own laws. The goal should be in finding solutions that are based on local needs and local circumstances (McEwen p.4). Another aspect of land ownership in developing countries is the contribution of technology. If technology were used to map the land to make the governments more aware of what they actually have, then perhaps allowing citizens to acquire land to do with it what they please would be a huge help. If the government knows what they have and what resources exist on them, then they are more likely to utilize those resources in ways that will give them an economic edge (McEwen p.8). Protection from unscrupulous investors Unscrupulous investors kill sustainability in developing countries. Through political elites taking kickbacks whenever they come their way, they are trapping developing countries into poverty and putting a stick in the spokes of sustainability. This corruption exists in high numbers in poor areas of the world where firms find it to be a good idea to invest in these developing countries (Shah p.1). Government-led globalization has been a contributing factor to environmental issues and various social and economic issues that have an impact on developing countries. This is especially due to the fact that third world countries have special interest in the WTO, the IMF, and the World Bank. They are also taken into consideration on different agreements and negotiations that take place (Shah p.1). What needs to be done is a stop put to these unscrupulous investors who are putting their own gain above the gain of the citizens. There has been an anti-bribery agreement in which the bribing of foreign public officials is banned. This tends to be a method in which unscrupulous investors get their way, so this method is just one step toward offering protection against unscrupulous investors although there will always be some sort of loop hole. President Vladimir Putin introduced tax reforms in order to combat money laundering in order to reduce such corruption in Russia (Jaura, p.1) A lesson on the benefits of sustainability and conserving natural resources Sustainability and the conservation of natural resources are very important. First of all, sustainability is obviously very important. Without it, countries cannot make any move toward prosperity. Anything that exists in chaos cannot exist in harmony. By sharing the benefits of knowledge and the various opportunities that exist, a country can benefit. Also, by making available and utilizing the environmentally friendly technologies that exist, a country can also move in the right direction (El-Ashry p.1) Obviously, sustainability and the conservation of natural resources go hand-in-hand. New financial resources must be achieved by moving beyond the formulas of traditional finance. These formulas must be formulas that allow for a greater investment in global sustainability and achieve greater cooperation. Polluters must pay because pollution destroys resources. These penalties for polluters must be done through joint ventures and the building of sustainable livelihoods (El-Ashry p.1). Through the maximization of the market impact of the many public resources, public funds should be used to help create an environment that enables private investments. Corporate greed must be surpassed and so does the irresponsibility that surrounds much corruption. Governments, investors, and consumers need to put on pressure for these governments to self-regulate and make the business case for sustainability (El-Ashry p.1). Economic, environmental and social processes Economic, environmental and social processes are intertwined in so many ways. In many developing countries, the economy is dependent upon various areas of the environment. As stated before, many third world countries rely on fisheries for their nutrition and their income (Steele, Oviedo, McCauley, p.7). If horrible things happen to the environment, then the damage to the ecosystem could severely hamper the well-being of the residents of a developing country. Amongst this well-being is the economic impact that occurs. As far as social processes, so much is impacted by the social impact. Social capital can reduce the effects of poverty and many of the inequalities that exist. Social networks make it possible for the creation of spontaneous creations of mechanisms of informal insurance. Voluntary organizations can actually improve the performance of the delivery of public services and of social protection systems. Through developmental assistance, poverty reduction processes can be put in place. It is just a matter of these programs being fully developed and implemented. Some studies have been done that have proved that such efforts are successful, but it is simply a matter of developing countries to cooperate with these efforts to bring about successful social processes (Capitale, Sociale, p.1). In conclusion Obviously, there is a technological and financial deficiency when it comes to the advancement of developing countries being behind the rest of the world. Developing countries do have, on the other hand, some processes that are in place, otherwise they wouldn't be developing. One could honestly say that if these countries did not have some sort of successful processes happening, they would be considered undeveloped and consist of much higher poverty levels than what they currently have. But they are still in need of help and this is only going to occur if the WTO and the IISD follow through on the items placed upon their list of priorities. These priorities include the poverty-stricken, which can be solved through better economic practices, the environment that needs to be preserved since the economies of many different developing companies are dependent upon the ecosystems, and protection from unscrupulous investors who damage the economy through their unfair investing practices. Globalization has opened a world of opportunities for developing countries, but it has also opened a world of opportunities for the developing countries to be taken advantage of. Vladimir Putin had the right idea when presenting his anti-bribery agreement, preventing unscrupulous investors from bribing government officials of developing countries. Sustainability is nothing to sneeze at since it can influence the economy on a global level, but until the financial means are available through responsible legislation that is enforced and the allowance of technology, things such as land acquisition and utilization are going to be at a stand still. There is plenty of technology to go around that will benefit these developing countries, but until the financial aspect gets under control, the financial means to acquire this technology will not be available unless the wealthier countries contribute, which would be in their best interest. By opening new trade agreements with developing countries because of the resources they can provide, a completely different economic revolution could be on the horizon. References Capitale Sociale. It (n.d). Social Capital and Poverty in Developing Countries. P.1. Retrieved December 1, 2007 from http://www.socialcapitalgateway.org/NV-eng-povertydeveloping.htm de Soto, Hernando (2000). The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. p.3, 4, 5. New York, New York, Basic Books. El-Ashry, Mohamed T. (n.d.). Unmatched Opportunities. P.1. Retrieved December 1, 2007 from http://www.ourplanet.com/imgversn/133/ashry.html Iisd (2007). Pulling Up the Ladder: The Widening Wealth Gap, p.1. Retrieved November 30, 2007 from http://www.iisd.org/briefcase/ten+ten_failures2.asp Jaura, Ramesh (2002). Global Anti-Corruption NGO Blasts Rich and Poor Alike. p.1. Retrieved December 1, 2007 from http://www.globalpolicy.org/ngos/role/globdem/globgov/2002/0828corrupt.htm McEwen, Alec (n.d.) Land Reform in Developing Countries p. 3,4,5. Retrieved December 1, 2007 from http://www.ucalgary.ca/amcewen/ILM2.pdf Shah, Anup (2007). World Summit on Sustainable Development p.1. Retrieved December 1, 2007 from http://www.globalissues.org/TradeRelated/Development/WSSD.asp Souter, David (2007). Capacity of Developing Countries to Participate in ICT International Governance, p.5. Retrieved November 30, 2007, from http://www.iisd.org/pdf/2007/igsd_capacity_dev.pdf Steele, Paul; Oviedo, Gonzalo; McCauley, David (n.d.). Poverty, Health, and Ecosystems: Experience from Asia, p.7, 8. Retrieved December 1, 2007 from http://www.adb.org/Documents/Books/Poverty-Health-Ecosystems/adb-iucn-phe.pdf WTO (n.d.). The 10 Misunderstandings: 3. Ignores Development p.1. Retrieved November 30, 2007 from http://www.wto.org/english/thewto_e/whatis_e/10mis_e/10m03_e.htm Read More