The Concept of Economic Relations

Economic relations can be defined as the economic interaction among various countries and their effect on global economy

The impacts on governments restriction on production, consumption and distribution of income play major role in economic relations of a country with the other

Example: India, inspite of being under British colony for more than 200 years has maintained a good economic relation with UK. There is are significant changes the economic relations between India and British from the colonial period. In 2002 United Kingdom was the second largest trading partner for India, at present United Kingdom ranks fifth among India’s trading partner India’s major export to UK are tea, metal products, leather goods etc.

In this globalized era, to bring about better economic environment and reduce the trade barriers the WTO has worked with many countries and has brought about many new policies and programs to improve economic relations among the different nations of the world

Benefits of Economic Relations

• Economic relationship gives access to the goods that would not be available otherwise
• Economic relations helps to reduce the sales fluctuation of company
• One of the most immediate benefits of economic relationships is lower costs to consumer
• As there is an increase in the price competition it helps companies to become more efficient
• Economic relations allows nations to specialize their economies in the areas where their resources are best allocated

Limitations:

• Countries which sell primary commodity and buy manufactured good in return are losers
• Foreigner trade may completely exhaust a country’s natural resoures like coal and oil which are irreplaceable
• Imports of harmful drugs and luxuries as opium in china, ruin the health of nation
• Through economics relationships, economic troubles of one country are transmitted to others
• Trade rivalry may lead to war and frictions

What are TRIADS, BRICS and LDC:

Triads refers to the three countries, the USA, the EU ,the JAPAN which dominate the world economy. being the dominating countries of the world economy , the international corporation sells their product first in the USA, then in Europe and later in japan. the other parts of the world would then receive the product after it had been sold in these major world market

Let us take an example to understand the concept of BRICS

For instance let us assume that a person works as a mechanic to earn his living

Suppose he went to another city in search of the work . he there finds a company named “ram mechanics ltd” which is quite famous in that city.

He finds it difficult to get a job as most of the work is done by that company. As time passes he finds few people just like him, who were deprived of job because of that big company.

The few mechanics say around 5 of them found a solution to this problem. They joined hands to cooperate with each other and inform others about the work available in that area. This eventually turned into a team which informed each other with work opportunity available. They had found the way out of big company by forming alliances and enhancing the chances of survival among the big companies.

Here in the this examples BRICS are the lone mechanics who have joined hands for development and better opportunity among the big mechanist like that of USA.

BRICS is an acronym for combined economy of BRAZIL RUSSIA INDIA CHINA and SOUTH AFRICA.

BRICS as an idea was coined in the meeting of foreign ministerial among brazil Russia china and india. It officially acme into existence in 2009

They were formed for the three following major reason

1. to challenge the US supremacy
2. to be an alternative to the world bank and IMF
3. to provide self - managed organization to carry out developmental and economic plans in member nations without being dependent on foreign agency.

An LDC country is a country that is at early stage in its development. It has high population growth often with low level of wealth and industry. majority of its people are engaged in agriculture

An LDC country is characterized by low HDI ranking, low literacy rate, and low GDP, the infrastructure in these countries are usually underdeveloped.

Afghanistan, Bangladesh, Ethopia are Few Examples

The US has the biggest economy in the world which is believed to be the most powerful country in the world. It also has most powerful allies like Spain, France, UK under its control . the most important trading partner of bangladesh is USA , where 18% of bangladesh’s export is for US

China ranks third on the most powerful countries of the world. After adapting the fiscal and the liberal policy. Now a days one just cannot go without using a chinese product in their daily life. Bangladesh and china has good developments in the bilateral trade which makes china one among the top trades of bangladesh in the recent years.

Among the LDC countries, bangladesh’s economy is the fastest growing economy. Bangladesh opened up its country for international trade in 1991. It has been maintaining a very good relation with the two massive economies of the world.