Market Forces In Global Development

1284 Words6 Pages
Introduction International development faces many challenges today: poverty, inequalities, injustice etc. However, who is the main actor, capable to solve development issues is controversial. Countries and the State intervention or the market forces can bring in better results in (developing) countries? There is no a common narrative or a magic recipe for a sustainable development. Below I present the market forces that influence global development today, weather they have a positive or a negative effect, and I try to answer if these forces can contribute to solve development issues. The “friendly” forces Hernado De Soto introduces an innovative solution to tackle poverty and solve development issues. He states that small informal businesses…show more content…
For example my country, Greece, faces a tremendous economic and humanitarian crisis since 2010. During that period its GDP have decreased almost 30%, large parts of population reached in poverty line, unemployment reached the 28% and many people lost their houses. We have experienced in the hardest way the weaknesses of globalized financial system and the clamp of debt to limit our moves. In this dramatic situation, European and international institutions, and Multilateral Organizations, such as European Commission and International Monetary Fund, imposing neoliberal policies, failed resoundingly to improve the situation, driving the country in deeper recession. World Bank and IMF starred in the wrongs of the past 2015 agenda. Providing aid and loans with conditionality, and most of the times this conditionality means liberalization and privatization, have driven countries in…show more content…
It begun in a pure form in Bangladesh,, with the goal to empower poor women, nowadays though tend to become another banking product, with a considerable increasing of the interest, exclude many poor people who need to borrow money but they don’t have the ability to repay the loans. Also, when the borrowers cannot repay their loans on time, they prefer to borrow from other lenders at even higher rates and as a consequence their level of indebtedness rises. This might also result in a higher burden on children, who have to work to assist their mothers. Another major critique is that microfinance undermines the economies of scale and in the long run has a negative influence in a country’s economy. While I am not an expert in economics, I could realize with bare eyes that this is fact during my presence in Tanzania. Many microcredit borrowers had established unsustainable business, unaware of the demand driven economy, and you could find in the same place many businesses providing exactly the same
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