This study was meant to delve into the wide area of trade liberalization as an issue that is gaining many roots in this new world order and influencing the economic growths of the participating countries. It lays a lot of emphasis on the pertinent aspects of trade liberalization and the revolutions that have emerged courtesy of this new wave. Any current study on trade liberalization can never fail to embrace the fact that it is indeed a process that has become so complex to the extent that nothing therein is taken for granted. It is in the same vein that this thesis attempts to present a thorough dissection of the whole concept while laying greater emphasis on the causes and the effects of trade liberalization in developing countries.
In a world as diverse and dynamic as ours, any systematic study should never fail to be objective in presentation (Blundell, pp45). Considering how my study is presented and the components included, one sees the striking manner in which both qualitative and quantitative methods have been employed. Primary methods of data collection were intensively employed in the data collection process.
Considering that Latin America is quite a wide area, the primary data was mainly collected from a sample of eight countries in Latin America. Despite this, the data is very representative of the whole region of Latin America considering that the region is very much homogeneous in entirely all aspects. The data was mainly collected through the use of questionnaires and by interviewing the relevant people in these regions. A lot of secondary sources were also used in the collection of data. These were mainly from books, journals, magazines, and audio-visual sources from libraries. Much data was also collected from several government websites of these countries.
Much research has been conducted about the trade liberalization subject in Latin America and huge volumes have been written. However one can still never fail to notice the missing link between the socio-economic events in these countries and their effects on the economies of these countries. It is given this that the study was objectively geared towards these critical areas.
The economic growth of many countries is normally a function of an aggregate of many factors of which free trade is normally a component (Cypher & Dietz pp78). Trade liberalization has influenced the economies of countries in Latin America. When Brazil widely opened its doors to free trade in the early eighties, an economic up-turn was evidenced in the subsequent years (Kume & Piani pp78). Brazilian coffee could now be found in many departmental stores all over the world. The coffee was normally sold at a higher price in the developed world where the demand was high thereby generating much revenue for the government.
In Argentina, before the adoption of the liberalization policies, the government was employing protectionist tendencies in a bid to support local industries (Nogues & Baracat, pp 84). However many textile factories were collapsing due to the increase in the cost of imported cotton (Robinson, pp90-7). The period 1980-1989 saw the economy of Argentina grow in double digits courtesy of the reduction of the import tariffs that enhanced free trade in the country (Cipher & Baracat pp,123).
Several studies indicate that many countries in Latin America have managed to eliminate deficits in their budgets in the last fifteen years (Raja pp78-80). The clear analysis will also show that this is the period when most of those countries adopted policies that promoted free trade with foreign nations (Rein, pp65). Research has also demonstrated that Latin American countries that have been reluctant to adopt neoliberal reform have continued to languish in perennial penury and have mostly depended on foreign aid mainly from the United States (Berry pp56-9). In light of all these developments, one can never fail to notice the improvement in the standards of living that has resulted thereof.
Reforms geared towards creating a free market have seen Latin America become a great home to many foreign investors (Schmidt, pp 670). Direct foreign investment in Brazil more than doubled in the period of the 1980s through the early 1990s (Feinberg, pp76-9). Several western investors were motivated by the booming investment environment that was availed by the governments of these countries (Walton, pp146-9). This has seen many multinational companies establish great plants in Latin America. It has therefore been seen that several countries in Latin America have managed to graduate from the league of most impoverished nations in the world to middle-income earners (Berry,pp106-9).
On the other hand, many critics of neoliberal reforms have enumerated several disarrays that have come about by the free trade policies. Studies have shown that considerable widespread income inequality is realized among the citizens in these countries (Ocampo, 34). This is attributed to the fact that the gains of free trade mostly benefit the little top brass in the economy. It has also been seen that several infant firms in the region have collapsed due to the huge competition posed by foreign multinationals (Vos, pp89).
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