Emerging Global Economy
Emerging Global Economy
An emerging global economy involves the exchange of goods and services between countries all over the world, which is measured using monetary terms. Various aspects, which include the importation and exportation of goods and services, impact the global economy (Arouri, Boubaker, & Nguyen, 2014). The emerging global economy is also used to describe the advancement of the world economy, which has impacted most countries all over the world in different aspects (Arouri, Boubaker, & Nguyen, 2014). This includes the developments and reforms in the economy with countries with large resources being indicated as power countries due to their influence on the global economy. One of these countries is China, which has been able to open up its markets on a global scene (Arouri, Boubaker, & Nguyen, 2014). This paper will discuss how the emerging economy will affect the financial situation of smaller countries.
How The Emerging Global Economy Will Affect The Financial Situation Of Smaller Countries?
The emerging global market impacts smaller countries positively as well as negatively based on different aspects (Arouri, Boubaker, & Nguyen, 2014). The emerging global economy has impacted the international finance markets in different aspects which include creating more efficient prices for most of the assets offered on a global scale as well as effective resource allocation to most of the countries (Arouri, Boubaker, & Nguyen, 2014). This will enable smaller countries to access some of these resources as well as the assets offered on this scale, which will enable a growth in their financial resources, as they are able to particulate in the global markets. The emerging global economy will also bring an economic change all over the world were small countries are getting ready to take advantage of the increasing opportunities which are attributed to the rapidly changing global economy (Arouri, Boubaker, & Nguyen, 2014).
These countries will be able to sustain long-term growth, which will positively impact their financial resources. These countries are impacted in different ways, which result in the countries making effective policies, which are meant to address and sustain any changes in the world economy (Reddy, 2012). The emerging global economy, which aims at lowering the operating costs while at the same time, increasing competitive markets will also lead to the opening up of additional markets and diversification of resources (Reddy, 2012). This will provide an opportunity to the small countries to participate in this market increasing their financial resources. Emerging global economy has contributed to the breaking down of boundaries, which led to high costs of performing transactions between countries (Reddy, 2012).
This has also led to the improvement of technology and more advanced systems to carry out operations, which have led to reduced costs enabling the small countries to save most of the financial resources, which were initially used in carrying out transactions with other countries (Cai, 2013). Breaking these boundaries also enables the small countries to carry out transactions with the rest of the world, which results in an economic growth, which will enable a country to have an increase in its financial resources. This can be used to solve some of the issues affecting the countries (Cai, 2013). Emerging global economy has also led to small countries to open up their boundaries enabling other nations to set up markets in these countries. This is important as it enables these countries to increase their revenues through tax rates and provides opportunities for the country to boost its economy, which results in increased funds (Cai, 2013).
The emerging of new markets enables countries to form strong ties with other countries, which strengthens the relationships between the countries. This is beneficial to the small countries, which are able to access funds and other resources from these large economies, which increases their financial resources (Reddy, 2012). Most countries depend on each other for different resources with the developed countries depending on developing countries for raw materials as well as markets for their products (Reddy, 2012). Developing countries depend on the developed countries for information, technology and other resources, which are important for improving the economy of these countries. Emerging global economy will be an advantage to developed as well as the developing countries in the exchange of the different resources (Reddy, 2012).
However, although free trade will increase the market opportunities for small countries to participate in, this also increases the risks of failure due to competition from other global countries which may negatively affect the financial resources of small countries (Marinov & Marinova, 2013). These may be further contributed by the increased production and labor costs, which are implemented to enable the country to participate in the global markets. A negative effect of the emerging global economy is the increased gap between the powerful countries and the small countries (Marinov & Marinova, 2013). The rich countries are able to take advantage of the opportunities provided by the growth in the global economy where else the small countries are unable to benefit from these opportunities. This will negatively affect their economy, which may lead to decreased financial resources (Marinov & Marinova, 2013).
.With the global economy creating a supportive environment for small countries to be able to access opportunities in the global scale, this will bring about a positive change in the economy of these small countries (Marinov & Marinova, 2013). This will provide these countries with financial resources, which are important in enabling a country to create a sustainable economy. However, there are risks involved in this process, which is attributed to the large economies of powerful countries, which may have a competitive advantage over these small countries (Marinov & Marinova, 2013). This may lead to negative effects on the financial resources of these countries, which requires these countries to take effective control measures to avoid suffering this negative effect. Research has indicated small economies to be impacted by changes in the global economy with recommendations that these countries should make structural changes to enable the countries to survive any negative changes to its economy (Marinov & Marinova, 2013).
Arouri, M. E. H., Boubaker, S., & Nguyen, D. K. (2014). Emerging Markets and the Global Economy?: A Handbook. Oxford: Academic Press.
Cai, P. (2013). The Emerging Economies and Global Economic Development. Ecodate, 27(1), 5–7.
Marinov, M., & Marinova, S. T. (2013). Impacts of emerging economies and firms on international business. (Impacts of emerging economies and firms on international business.) Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.
Reddy, Y. V. (2012). Global Economy: Emerging Issues. ASCI Journal of Management, 41(2), 1–13.