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Any country has its way of development. Some countries maintain to thrive in a quickly changing environment, and some have difficulties. Often, IMF and World Bank, which is supported by developed countries, tend to guide underdeveloped countries to make progress by introducing neo-liberalism policies. However, this guidance will not help underdeveloped countries to change the situation evaluates as the Third world Countries. In terms of making economic development, underdeveloped countries need to retain controlling of the tariff, subsidies for pillar industry and protect the infant industry from international competition.
While the Third World countries are not only struggling with the political situation and reforms but also dealing with financial crisis, and low level of education. Even though, the IMF and the World Bank have enough funding and could offer help to those countries who are facing finical crises. However, help is not their primary interest, they tend to invest in underdeveloped countries by adopting neo-liberalism. Many underdeveloped countries take it in desperation, but there are many traps and pitfalls. It is a way to hold over Third World nations and gain maximum benefit for investors. For instance, Jamaica such a perfect tourist destination for people who enjoy low-cost hospitality and beautiful nature. However, the natives are inferior and do not have opportunities to get decent jobs and salaries. In Life and Debt, documentarian Stephanie Black shows that the current situation in the country did not much change since Jamaica gained independence. Natives live in harsh conditions and are jealous of the tourists who can travel and treat them like servants. The common stereotype is that Jamaican people are lazy and relaxed, but in real life, they try to do their best to satisfy the tourists as they bring the most of their income. Travelers do not pay attention that the sunshine causes a lack of water and that all the food they eat there is from Miami. Moreover, natives do not like the tourists as they do not look, speak, or eat the same way as they do. Jamaicans are still under the influence of the United States and European countries. They create trade systems and conditions that give themselves opportunities to earn substantial money, and it is hard for Jamaican people to compete with them. It is the main reason why the IMF, World Bank, and WTO manipulate them. In the Life and Debt, the director wants to show to the audience how the World Bank and the International Monetary Fund try to work to help make reforms, but only deny the opportunity for the Third World countries to be independent and thrive. Black shows a perfect example, where the IMF refused to provide Jamaica with the loan until they lower the trade barriers. Thus, foreign companies sell cheaper items that destroy local businesses. The United States imported milk powder that is much cheaper than real fresh milk so that it left native farmers with no profit. Nonetheless, Stanley Fischer, the first deputy managing director of IMF, defends the policies and tries to convince the audience that all actions are beneficial for Jamaica. However, once the milk powder company dominated the market, there is no local competitors exist, it is easy to control market price as much as they want.
In Bad Samaritans, Chang gives another example of economic development. He provides a few concrete examples from the different researchers of the past, who wrote about Japanese people in the workplaces. All of these examples confirm that at the time, people from different countries saw Japanese as lazy and easy-going workers and Germany were considered to be slow and unfair as cultural heritage. Nonetheless, it did not affect the economic development of both Japan and German. Nowadays, their cultures are known as hard-working and passionate. With time, culture in any country changes, and it is not right to consider anything like a cultural description. One of the standard features of people from Third World countries is prejudice against foreigners. However, rich and emerging countries have a different organizational structure. The stereotype is that developing countries are in this condition because their natives are lazy. Nevertheless, they usually have longer working hours, they work with simple tools compare with well-development counties, so that criticism is unfair.. Chang claims that economic development depends on the country’s economic conditions, not people’s personal qualities.
Chang says that it is impossible to follow and define the reasons for how countries evaluate economically. He states that emerging countries have many unemployed or underemployed people, and immigrants from these countries usually work harder than the locals. Also, weak law enforcement and poor education resources are vital in the process of economic evaluation. Modern economies in developed countries change people’s points of view and encourage them to act differently. However, in the slowly changing economy, people are not interested in planning for the future, as it is a feature of those who seek for new opportunities to have a better life standard. Economic development changes the culture in both positive and negative ways. According to Chang, culture is the result and the cause of economic development. Usually, economic development encourages natives to become more hardworking and disciplined and not the opposite.
It shows that development can spontaneously cause a cultural revolution. There is no need for the cultural revolution before the economic rise as their attempt rarely succeeds. People’s behavior will change once they see changes and evaluations in economics. However, it will not work in societies where workers are treated badly. Also, pursuing young people in countries with small industries that having an engineering profession is wrong will not encourage them to change. The manufacturer has high productivity and it is one of the crucial differences between rich countries and poor ones.
Also, there are a few key historical elements that Chang addresses effectively. He sets an example of Korea, where in the 1960s, the government increased funding and the number of places in university for engineering and science departments, as the country needed more scientists and engineers, and it had a positive result. In Japan, workers received such benefits as lifetime employment and company welfare schemes. However, it happened all over the world. For example, Sweden also had a problem with terrible labor. In the 1920s, there were more strikes than in any other country. The country’s capitalists delivered a generous welfare state combined with good retraining programs in return for workers restraining their wage demands and strike activities. Nevertheless, countries with low economic development will not survive if they will be exposed to international competition without proper preparation and supporting from the government. In the beginning, they need to improve their capabilities by mastering advanced technologies and building effective organizations, and then they need to shield those infant industries by setting up a shield either use subside or increase tariff. Alexander Hamilton, the first treasury secretary of the US, was the first one to propose this theory, and many generations of policymakers before and after him used it.
There is another significant point raised by Chang. It is the importance of tariffs and subsidies. In US history, there is only a short period that the US cut off tariff, to help the world to rebuild after WWII, also make as many allies as possible against the Soviet Union. In the meantime, US government lunches heavy subsidies every year in term of supporting not only emerging industries, but also agriculture. In contrast, Jamaica is forced to accept terms of conditions about lowering tariff and cutting off subside, which is considered as well-development countries ‘kicked away the ladder’. Neo-liberalism is offering policies have the opposite direction compared to the strategies that developed countries are taken.
During the past decades, developing countries have liberalized trade to a high level. IMF and the World Bank first pushed in the aftermath of the Third World debt crisis of 1982. For example, the Mexico borders on the largest market in the world (the United States) and has had a free trade agreement with it since 1995. Moreover, there are many skilled workers, competent managers, and developed infrastructure. Free trade economists argue that free trade benefited Mexico by accelerating growth. However, in the 1980s and the 1990s, trade liberalization destroyed a significant amount of businesses of Mexican industry that had been built up during the period of import substitution industrialization. It caused a slowdown in economic growth, lost of job places, and fell in salaries because better-paying manufacturing jobs disappeared. Free trade is playing an essential role in neo-liberalism, it also means that underdeveloped countries must directly compete with well-developed countries that are doomed to fail.
Many factors have an impact on the country’s development. It is crucial to pay attention to the details to understand if the country would succeed or fail. Nonetheless, governments need to put efforts on policymaking to benefit the domestic economy. Also, individuals from underdeveloped countries need to respect such professions as engineering as it is one of the jobs that help to reach the country’s higher needs. Furthermore, IMF and World Bank policy play a crucial role as before. It is important to have a link among globalization, neo-liberalism, historical elements, in terms of producing a more convincible blueprint for helping underdevelopment countries efficiently. Finally, it is necessary to absorb different scientists from other subjects such as social science and development study, in order to design a suitable economic development plan, combine economic and local conditions.
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