International Trade - Essay Example

Eventually, globalization of trade worked in some countries better than others. Stiglitz takes a closer look at globalization and its effects leading to disparity of growth in different countries. Among the factors he identifies are the following. First, he talks about the lack of ready capital flow. Countries such as the US made readily available grants to commerce making it easy for new enterprises to emerge to take advantage of global trade. Secondly, Asian countries experienced rapid exponential economic growth due to their emphasis on industrialization rather than educational programs.

Thirdly, he blames the neo-classical theories, which asked developing countries to emphasize on manpower training rather than capital flow to enterprise. The result was rampant joblessness, poverty and desperation in these countries; rather than the envisaged economic growth. Finally, he points out that the disparities between experiences countries in the New Economy depend on their own policies which enable them to take advantage of it to grow or otherwise. Stiglitz is right on many counts. His criticism of the neo-classical theory that portrayed globalization as the panacea for all the world’s pre-existing economic problems, such as the disparities in wealth, is justified.

He points out that South American countries have emerged all the poorer compared to their northern neighbour the US. In Africa, the poverty situation is worsening. The main difference between those who have become richer and those who have stagnated is in terms of policies. Countries that had a readily available trained manpower base and credit capital like the US did better than others in the New Economy. As a result, economies of world nations diverged instead of converging. Secondly, he points out that countries such as China did not embrace international economic ideologies fully, but adopted positive ideas while