GGH3702 Exam Pack 2022

GGH3702 Exam Pack 2022. ESSAY QUESTIONS Question 1 Debate the reasons why some economies in the Global South are on the decline or stagnant while others are growing. How can government in countries with weak or stagnant economies influence their economies to grow? Support your answer with literature on how countries of the Global South can achieve economic development whilst maintaining the environmental integrity for future generations. 3 Contents NO PAGE 1 Introduction 2 Defining the term Global South 3 Booming Economies in the Global South State of China’s Economy Why China’s economy is growing South African economy Reasons why South African economy has experienced growth State of Rwanda’s economy Reasons behind Rwanda’s economic growth 4 Declining economies in the Global South Somalia state of economy Reasons behind Somalia’s weak economy Zimbabwe’s economic state Reasons behind Zimbabwe’s economic decline 5 How can government with weak or stagnant economies influence their economies? 6 Conclusion 7 References 4 Introduction Throughout history, it has been quiet apparent that the world is divided into two groups. The first being the one that controls the world assets and the other group being the one that is constantly under development. These two groups are: The Global North and the Global South. The Global North is composed of primary developed countries such as the United States, Australia and countries under European Union. On the other hand, the Global South which is under discussion in this essay. The first part will conceptualize the term Global South, secondly identify countries under the global south whose economies are growing and reasons behind their growth, the essay will further discuss economies in the Global south which are declining or remaining stagnant and the reasons behind the stagnancy. The other part of the essay will share on strategies that can be adopted with Government with economies which are struggling. Lastly the essay will discuss how countries in the Global South can achieve sustainable economic development. Defining the term Global south The emergence of the term Global South in its historical context constitutes interesting connotations since the term has been charged with various shades of meaning since the term is not perfect. The term Global south can be said to be contextual since it evokes different meaning for different people. To some it is related to economic division between the richer and poorer countries. According to Mahler (2007). The nations of Africa, Central and Latin America and most Asia are collectively known as the Global South. Global South is the latest term used to describe the non-Western world or developing countries. The term is usually used to mean countries faced with social, political and economic challenges which include poverty, environmental degradation to mention just but a few. 5 Booming Economies in the Global south Countries of the Global South have been described as newly industrialized or in the process of industrializing, this part of the essay shall briefly look at China, South Africa, and Rwanda. State of China’s Economy World Bank (2018) assert that China has the largest global economy, the largest exporter and has the largest exchange reserves in the world. According to World Bank report on China since the country began to open up and reform its economy in 1978, the Gross Domestic Product growth has averaged almost 10 percent a year and more than 800 million people have been lifted out of poverty. It is on record that China has experienced improvements in access to health, education and other services. According to a report by World Bank, China is now an upper middle income country. Why China’s economy is growing According to Hurst (2017) China’s economy has enjoyed more than 30 years of explosive growth, making it one of the fastest growing economy in the world. Caves (2007) highlights that China’s success is largely based on a mixed economy and there was massive government spending in trying to build their economy. Xu (2011) argues that the government of the People’s Republic of China owns strategically important companies that dominate their industries, it is argued that Chinese government ownership allowed China to direct companies to high-priority projects. In addition to that the government is said to control its relations with foreign investors as they have strict policies when handling foreign partners. This therefore implies that China’s regulations on foreign business has also helped in the economic growth. 6 Another reason why China’s economy has grown whilst other countries in the Global South are wallowing is that the People’s Bank of China, controls the Yuan to dollar value. The control of the nation’s central bank is meant to manage the prices of exports to other countries such as United States. Their goal is to produce goods and services which are cheaper than those produced in United States and the country takes advantages of the disparity between the countries. South African economy According to World Bank (2018) South African economy is the second largest in Africa after Nigeria, however South Africa is evidently the most industrialized, technologically advanced and diversified economy in the African continent. According to World Bank report South Africa is an upper middle income economy which is highly developed with advanced infrastructure. World Bank report on South Africa (2017) notes that South Africa is one of the largest exporters of gold, platinum, and other natural resources. In addition to abundance of resources, the country has well established financial, legal, energy, communications, stock exchange and many other sectors. Reasons why South African economy has experienced growth According to World Bank (2018) South Africa has one of the most sophisticated and promising emerging markets globally. Various scholars highlight that the nation of South Africa has experienced a booming economy as result of a highly developed first world economic infrastructure and a huge market economy. With such, it has given room for strong entrepreneurial and dynamic investment environment. 7 The nation of South Africa can be described as the economic powerhouse of the African continent as it leads in industrial output and mineral production and also known to generate electricity. However, it should be noted that despite being an economic powerhouse in the African continent, the economic strength of South Africa is steadily on the decline, however this doesn’t mean the country is not improving. The country is fairly doing well apart from the fact that due to COVID 19, the economy has been severely affected but it would be unjustifiable to label South African economy as weak. State of Rwanda’s economy World Bank (2020) highlights that the economy of Rwanda has undergone rapid industrialization due to effective policies by the current government. The country is enjoying strong economic growth rates, creating new business prospects and lifting people out of poverty. According to a USAID report (2021) The government of Rwanda is actively working to develop the economy and reform the financial and business sectors. The World Bank report on Rwanda (2020) highlights that the country’s major foreign exchange earners include but are not limited to mining, tourism and agriculture. Reasons behind Rwanda’s economic growth One of the reasons behind economic growth in Rwanda is the Business environment in Rwanda. According to World Bank report (2020), Rwanda has seen success in the World Bank Doing Business 2020 report. In Africa it is currently ranked second in the World Bank Ease of Doing Business report. Reforms have been put in place to assist business people by easing the process of starting a business in their country, property registration, and many other processes. 8 Furthermore, Rwanda’s President Paul Kigame’s l