Question

Take the Wheel of the Global Economy! I am appointing you as the head of the Global Economic Forum, and giving you the opportunity to set the direction for global economic policy. Take a moment, or a few moments, and think about the topics that we have covered over the last few days, and the three different approaches to global economic development we have explored. Based in the information that you have, what do you think the top priority for the global economy should be, and why? More importantly, how would you go about achieving it? Do Neoliberalism, Dependency theory, or Sustainable Development hold the key? Maybe some combination of the three? What do you think?

Answer 1

                                        Neo-liberalism refers to a new form of liberalistic principle in the market economy that favours more liberalistic processes and hence favours free-market mechanism. It has a more focus on economic liberalism and market capitalism for which it focusses on privatization, globalization, deregulation, free trade, austerity measures etc. Thus, it can be seen as a paradigm shift from the Keynesian view of market economics. The ‘Dependency theory’ states that in a globalized world, there is a continuous flow of resources from the poor nation to the developed and richer nations which would make the latter richer at the expense of the former. The theory rose as a response to the modernization theory of development which stated that each nation has to follow certain stages of development at different stages of their economic growth and the condition of the poor nations today is just a resemblance of this concept. The most discussed theory of the modern world is the Sustainable Development theory which states that the needs of the present generation should be met with the consideration of the future generations and their ability to meet their needs tin the future.

                                     Thus, by taking in to consideration all the theories as discussed above, the following directions and recommendations could be suggested for the future global economic policies

· In this globalised world, each economy should have a focus on the regional economy and expansion of it on a global scale so that the economic distribution would be equitable and would not be concentrated on some manufacture giants.

· With the current crisis situation due to the global spread of pandemic, most of the economies are expected to follow a market behaviour that could focus on specific sectors and development of minority sectors.

· As recommended by the Neo-liberalism, free-market economy is one of the major features of a globalized world and could not be restricted.

· The Dependency theory, although says that it is essential for every economy, needs to be considered on a global scale and should be given more analysis.

· The sustainable development model is to be strictly followed in this era of rising technological progress. Thus, it has to be made sure that the principles of sustainable development should form a basis of every economic strategy that are taken across the globe.

The following could be done on a global scale in order to achieve this mechanism on a global scale

· With the development of e-commerce and e-learning platforms, it should be made the basis of trade on a global scale and the advantages of online platforms should be made available to the lower sections of the manufacturing base so as to bring in all the sectors in to the economy with an improved efficiency.

· International trade mechanisms should be made liberal so as to extend the benefits of individual economies across the globe to develop a sustainable global economy.

· Private participations should be improved in development and infrastructural sectors so as to maintain the fiscal balances of the state and monetary reserves of the central banking authority.

· The benefits of the global trade should be made available to all the counties so that the ‘Dependency theory’ is addressed to on a sustainable scale.

                             Thus, from the above suggestions, it could be understood that Neo-liberalism and Sustainable Development theories could not be marginalised in this global world and due considerations have to be applied to the ‘Dependency theory’ so as to extend the benefits to the resource origin countries also. Thus, a combination should be key for considerations of future global economic policies.