Free Global Imbalances Informative Essay

Free Global Imbalances Informative Essay Brief by the United Nations University, some countries in the region were undergoing a positive economic advancement. The report reveals that some African countries richly endowed with natural resources were recording unprecedented rates of economic growth as a result a price boom generated by the growing demand for raw material and fossil energy from China and India amongst others (1). However, the report reveals that after the crisis, the price of oil and many other primary commodity items fell sharply, and reverted to tear pre-boom levels. The prices of most mineral ores, in particular, declined considerably in response to the sluggish in international markets (1). The long-term dreams of the resource endowed states of attaining industrial and scientific revolutions based on the exports of raw materials came to an abrupt end. The continent experiences a paradoxical situation of having plenty of resources and being the poorest and least developed continent in the world. The contin ent relies on foreign exchange earnings from the exports of locally produced goods. The foreign exchange rates, which are greatly affected by the economic and financial crisis resulting from the global imbalances, greatly determine what the continent receives in return. Similar scenarios were witnessed in the Latin American countries. Conclusion It is worth noting that most of the developed countries currently exhibit low economic growth rates compared to the developing countries. As Peters, et al (11) observed that many countries including the United States experience negative growth whereas countries like China and India still maintain positive growth in real GDP in 2009. A significant impact that global imbalance has is that it leads to excessive foreign exchange reserve. The question as to why many countries including the developed ones continue to improve on their current account status while the US deteriorates should be the governments main task. On the other hand, what the developing countries need to understand, especially those in Africa and the Latin America, is that they should not continue with their economic dependency principle. The countries have adopted a routine of exporting their products to their former colonial states. Besides, the colonial governments established education systems that could only endow the natives of these countries with limited technical knowledge that could be used to transform the raw products into consumable goods locally thereby calling for export. These systems should be abolished and the governments should embark on inventive and innovative educational systems.