Economic System Essay Example | Topics and Well Written Essays - 1250 words

Economic System - Essay Example For encouraging growth and prosperity, it is deemed significant to understand that funding alone could not be the sole savior for a newly industrialized economy. (Wallace, 1992) There needs to be proper micro credit and financial system in place so that the newly industrialized economy can get back on its feet in the wake of missing funding mechanisms. This indeed is the order of the day when it comes to the developing nations which are doing their best to turn the tide that is bent to be against them. In an economic zone, globalization plays a significant role at increasing trade on an international front which as compared to the global economy, is much faster and ahead of its time. Furthermore, we can predict an increase in the flow of capital that has been coming from the global regimes which might include for the foreign direct investment as being one part of it. Then there are the agreements which are signed on a global scale that eventually lead to world bodies like WTO, IMF and others. Global financial systems also come to light as their developmental work gets thumbs up. International transactions speed up as the world bodies like WTO, WIPO, IMF and the like play their role in a more coherent and active manner. Economic practices like global sourcing or outsourcing as we know of it, off-shoring and others increase courtesy the multinational concerns. In a changing capitalistic business environment which is spread all over the world, IMF has sustained itself on the principl es of removing poverty right from the deep root levels. What this means is that the motto of IMF is to understand the psyche of the rich nations and to adopt policies which would make the poor and under-privileged member states to get back on their feet or to make them stand at a position from where they can reach ascendancy. This will harness their hidden strengths and provide avenues of strength so that problems could be brought to a halt at the earliest. IMF finds out the mechanisms through which these problems could be detected and then tries to ascertain the exact basis under which problems do arise. (Hughes, 2002) What this gives IMF is a pathway to block the way for the troubles that come in the way of the member states and also present a destination where these countries have to reach at a certain point in time within the future. The aspect of removing poverty from the member nations' economies is an interesting aspect since IMF has to take care of the profits and incentives of the rich nations as well whilst providing benefits to the already down-trodden nations. The international economic relations between different states and countries has promoted as well as saved the varied interests of the nations when it comes to the relevant discussion regarding the economic diplomacy. The superpowers of the world are focusing their attention on the well being of their respective economies whereby the production levels in these countries in relation to different goods and the provision of services has increased and got better in the years that have passed by. There is so much competition that a nation cannot stay at a place for a considerable period of time and it needs to evolve and change its direction every now and then. Economic diplomacy ensures that the countries remain on their toes to the ever changing market conditions and remain