The International Economic Challenges and problems of today’s World

The globalisation of the world economy is rapidly developing and this provides many opportunities and major challenges to the nation’s and people of the world.

We live in a Global Economy —

So we all live in a globalised world. We can connect instantly with any corner of the world by technological advancements. Although not as free as the flow of international trade of goods and services, millions of workers at all skill levels have migrated around the world, and thousands of jobs have moved from advanced countries to emerging market economies, such as China and India.

Finance has also globalised. We can invest in the companies anywhere in the world and purchase financial instruments such as stocks and bonds from any company from almost anywhere in the world. And now today’s in the age of internet it is possible only by one clicks through diffrent electronic communication devices such as smartphones, tablets, computers, etc.

In short, tastes and preferences of the people, production activities, competition, labour markets and financial markets are all globalizing and this affects deeply as Consumers, workers, investors, etc. Hence we can say that we all live in a globalized economy. And it is important to understand the different issues of today’s world.

The following are some of the current economic issues and problems faced by the World —

• Slow Growth and High Unemployment — The recent COVID 19 Pandemic worsened the global economy and affects the world trade and increase the economic disparity. Moreover the Russia-Ukraine war affects the food grain crisis in some of the low income countries of the world. The developed nations responded this crisis by rescuing banks and other financial institutions from bankruptcy, slashing interest rates and introducing huge economic stimulus packages. Even this economic slowdown is continued the world economy experiences inflation and widespread unemployment in diffrent sectors. It is important to note here that the intensity of these economic issues is diffrent in each and every region because some countries may face environmental and natural calamities as well so in these countries the situation is too much difficult.
• Trade Protectionism in Advanced Countries in a rapidly Globalizing World — With free trade each nation will specialize in the production of the commodities that it can produce most efficiently and by exporting some of them, obtain more of other commodities that it could produce. In the real world however most nations impose restrictions on the free flow of trade. The problem now arises by the increasing Competitive challenge that advanced countries faced from the leading emerging market economies particularly China and India. On the other hand, some of the developing and less developed countries want to protect their own industries from international counterparts and hence the impose restrictions on the free flow of trade.
• Excessive Fluctuations and mismanagement in exchange rates and Financial Crises — A periodic financial crises have also led to the financial and economic instability and dampened growth in advanced and emerging market economies and ultimately other economies of the world. These economic crises have also led to the reforms of the present international monetary systems and for more international coordination of economic policies among the leading nations of the world.
• Structural Imbalances and Insufficient Restructuring in Transition Economies of the World — The world’s developed nations faces structural imbalances in the form of excessive spending and inadequate national savings. And the result is huge capital inflows, overvalued currency issues, huge and unsustainable trade deficits, and unstable financial conditions. Inadequate growth in these areas dampens the growth of the entire world economy. Thus, the national and regional economic challenges quickly become global economic problems in the interdependent world.
• Deep Poverty in many Developing Countries — Many developing countries in Asia and Africa have been growing very rapidly and some of the poorest developing nations faces economic issues deep Poverty, unmanageable international debts, economic stagnation and widening international inequalities in the living standards. International inequalities in standards of living between the rich and many of the poorest developing countries of the world are son large and widening and thus it needs to be tackled.
• Resource Scarcity, Environmental Degradation, Climate Change and Unsustainable Development — Growth in rich countries and development in poor countries are threatened by the resource Scarcity, environmental degradation, and climate change. In the face of rapidly growing demand, particularly by the China and India and supply rigidities in nations, the price of petroleum and other raw materials has risen sharply during the past few years and so has the price of the food commodities. The world currently is witnessing very dangerous climate challenges such as global warming and resources depletion that may have increasingly dramatic effects on life of the earth. These problems can be only adequately analysed and addressed by a joint efforts of all the stakeholders together and a change in the world Governance to ta kle these issues.

So these are all the economic problems and issues faced by the world today and with proper cooperation and coordination with all countrie swe can tackle these issues and achieve stability and economic growth and development.

Thanks.