Protectionist Policies

Analyse the impact of protectionist policies on the domestic and global economies. The benefits of globalisation, the increase integration of domestic economies into one global delivery, cannot be full materialised if protectionist policies are implemented. Protectionist policies have a negative impact on both the domestic economies of the world and also the world economic system, as globalization is hindered. The concept of comparative advantage is not utilized, cheaper prices are not developed for consumers and ineffective and uncompetitive industries are allowed to touch on to operate. Hence the protectionist policies of increased tariffs, subsidies, quotas and even embargoes impact negatively on both the domestic and global economy. With domestic economies, implanting tariffs on import and giving subsidies to their own domestic produces inefficient industries. The resources of the domestic economy are not being utilized as the resources in the inefficient industries could be better utilized in efficient competitive industries which then can export products overseas, increasing gross domestic product and domestic employment. Singapore for example has implemented economic policy involving very low tariff levels, which has led to the island nation forming internationally competitive industries in refining and finance.

The nation has increased its gross domestic product by 23% by 1992 to 2002. Unemployment has dropped from a high of 13% in 1991 to a low of 4% in 1999. By abandoning protectionist policies the nation has developed into a Newly Industrialised economy, resulting in increased living standards in Singapore. Furthermore protectionist policies lead to change magnitude employment opportunities in the long term as the economy is not able to expand of grow quickly through use of globalization. With no real increased job prospects in the inefficient domestic industries in the long-term the unemployment rate allow for rise. Higher inflation is another effect of protectionist policies. With dearer... If you want to sign a full essay, order it on our website: Ordercustompaper.com

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