Wednesday, 6 February 2008

Free Trade & Market economy

Basically there are many problems with giving foreign aid. The foreign aid is often short-sighted and not creating sustainable improvements. There need to be a shift from shipping food to developing countries to a foreign aid for a long term improvement. I am not saying catastrophy aid is not needed; it is very much needed. But an economy cannot be built around foreign aid.

The first mission should be free trade. The most efficient way for developing countries to develop is by letting them trade their goods with the rest of the world, without traid barriers. This will create an increased prosperity and incentives for technological development. Furthermore, the industrialized world needs to stop dumping goods in developing countries, destroying the domestic market and companies.

When this is done, important steps towards market economy have been taken. But this need to be followed up by creating a transparent and reliable market. This is the responsibility of the local government, creating the prerequisites for this development. The market economy will drive economical and technological development, thus reinforcing itself.

With the increased prosperity brought by the market economy, an efficient educational system need to be created. This is creating a workforce suited for jobs in a knowledge intensive industry and incentives for multinational companies to establish operations here.

This will create a growing educated middle class, which most probably will create a demand for democracy and decreased corruption. These systems, market economy and democracy, are reinforcing themselves and each other by their existence and interaction.

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