Point out any four disadvantages of international trade for the underdeveloped and developing countries.
Point out any four disadvantages of international trade for the underdeveloped and developing countries.
Following are the disadvantages for the underdeveloped and developing countries:
a. Economic Dependence: Most of the underdeveloped and developing countries are totally dependent on the exporting countries for importing the goods and services for their economic development. Too much dependence on exporting countries has serious political and social-economic implications.
b. Dumping of goods: Many exporting countries in order to capture the market in underdeveloped countries, dump their goods at throwaway prices. Though such goods are inferior and have shorter life; they attract customers in importing countries which results in cut-throat competition to domestic industries.
c. Adverse effect on BOP: Due to low competency and relatively more freedom in international trade, the underdeveloped and developing nations are not in a position to compete with developed countries. Thus, the balance of trade remains negative on long-term basis.
d. Colonialism: International trade leads to colonialism in the world, which means the domination of developed countries over dependent underdeveloped countries to fulfil their mean interests.
Following are the disadvantages for the underdeveloped and developing countries:
a. Economic Dependence: Most of the underdeveloped and developing countries are totally dependent on the exporting countries for importing the goods and services for their economic development. Too much dependence on exporting countries has serious political and social-economic implications.
b. Dumping of goods: Many exporting countries in order to capture the market in underdeveloped countries, dump their goods at throwaway prices. Though such goods are inferior and have shorter life; they attract customers in importing countries which results in cut-throat competition to domestic industries.
c. Adverse effect on BOP: Due to low competency and relatively more freedom in international trade, the underdeveloped and developing nations are not in a position to compete with developed countries. Thus, the balance of trade remains negative on long-term basis.
d. Colonialism: International trade leads to colonialism in the world, which means the domination of developed countries over dependent underdeveloped countries to fulfil their mean interests.
