Question

Economic interdependence is associated with stability of state relationships. Do you agree or disagree with the statement? Support your position by offering at least three historical examples.

Answer 1

We say that economies are interdependent when an economy is largely affected by another economy. The mere exchange of products between states can be termed as economic interdependence. Sometimes a product produced in a state can become highly valuable for another state. In a way, it has given rise to globalization whereby goods are traded on a comparative advantage basis. Since a developed nation will be more progressive in nature and depend highly on industrial and service sectors, it will require a source for its raw materials. Thus, I disagree with the statement that economic interdependence is associated with stability of state relationships. If we look into further details, we notice that economic interdependency has eased the trade of developed nations but the underdeveloped and the developing nations are the one which is worse off. Developed nations will dump their cheaper and durable goods in the poorer economy and dominate the local market. This will just create more unrest and increase economic debt of the poorer economy. Thus, if proper policies are not maintained, economic interedependency will bring about more unstability in the states.

Three historical examples can be that support the above statement would be-

• The rise of colonisation- In the early 15th century, the Europeans started exploring nations such as Africa and America in seach of resources and land. The huge exploitation led to some serious social as well as political unrest.
• the western nations ventured out to most parts of Asia and Africa looking for raw materials such as rubber, oil, jute, etc and to trade their finished goods in the local markets.
• the most popular example of capitalism would the possession of India by the British in order to obtain raw matrials such as spieces, slk, indigo, pepper, etc.
• the invasion of Kuwait by Iraq for oil.