Effect of Alliances and Rivalries on the Economy

Effect of Alliances and Rivalries on the EconomyModern World EconomyAlliances and rivalries inceptionHistorically, we dwelt in a structured competitive realness of rivalry betwixt states, where each has had to look to its own ends and use any means accessible to occupy them. (P.J. Taylor, 2002) (Brackets added). However, since the end of the Cold War, this position changed significantly. In his third base foreign policy speech, delivered in Georgetown, USA, Tony Blair identified that in the modern scotch creation, you cant bewilder a coherent view of national take today without a coherent view of the international community. However, is such a position attain fit when one considers the alliances and rivalries that exist with world economies? The purpose of this musical theme is to interpret the globose phenomenon of alliances and rivalries and the effect they stimulate upon four key structures of the worlds economy.ProductionSince the birth of the Information and digital technology earned run average in the 1970s, the world has witnessed a steadily increasing movement towarf beds commercialised globalisation, a term referring to the international spread of mathematical product and technology (Castells, 2001). The frontmost to recognise the value of globalisation were essential countries such as the US and UK. This move was driven by a desire for reduction in labour and production cost. Developed countries took advantage of these reduced costs to array up global production structures through alliances with emerging nations.International alliances, creating global productions structures for business, have become commonplace. For example, in the automobile industry, corporations such as DaimlerChrysler have invested heavily in production plants in the Far easterly, for instance India where it has an 86% stake in a production business ( pillar, 1999). Many other(a) industries are operating in the same way, with either full, or helping productio n outside of their native location. Internationally, the development of gratuitous trade of this reputation is encouraged. The WTO1 briefing (2006, p.11) states, it allows resources to be used much appropriately and effectively for production.However, politically international production structures have also become a problem. glare production costs in the Far East and emerging countries, and the authorization damage they are doing to the economies of authentic countries, has led to the setting up of restrict nations rival trade agreements, such as NAFTA2 (Atkinson, 2003), which helps to protect the economies of the member countries from production areas such as the Far East and Europe. Such rivalry tied(p) exists between the emerging nations themselves (Borrus, M, Ernst, D. and Haggard, S. 2000).KnowledgeAs global production structures have changed, the structure of technological and scientific knowledge has begun to imp operate upon it. In circumstance, as Martin Shaw (1999 ) suggests The rise of the so-called knowledge economy has meant that economists have been challenged to look beyond labour and capital as the central factors of production.In the initial stages of the globalisation, the sacramental manduction of technological and scientific knowledge of the developed countries was promoted in the interest of emolument of quality and production systems. West cooperated in knowledge alliances with East to satisfy commercial aims.However, as the knowledge structure countries such as Japan, India, mainland China and China, began to rapidly improve, the structure of these alliances has changed. At the business level, and in an adjudicate to some(prenominal) protect and increase their profit agenda, corporations increasingly claimed intellectual rights over clean discoveries and3 licensing use of this knowledge to others. Martin Shaw (1999). Such rivalry is continuing despite the fact that it appears to be widening the knowledge gap between the rich est and poorest nations.Finance maybe the most complex structures within world economies are those that relate to finances. mental unsoundness within this area of an economy can have a salient effect upon a nations economic position, as was witnessed in Mexico in 1994 (Michael Pettis 2001) when it was forced to devalue its currency. As Pettis identifies, much of this stability is dependent upon investor confidence and belief. Once this has been damaged or exhausted, economic crisis can result.To besiege this, nations have sought-after(a) financial alliances. The most well known of these occurred in Europe where they introduced the Euro. In other areas, such as Mexico, nations have sought to link their economies financial structure with larger countries such as the US.However, so far in the financial arena, rivalries have developed. For example, the UK steadfastly refused to become part of the bingle EU currency, preferring instead to stand in rivalry. The Euro itself was parti ally designed to act as a rival currency to the dollar, partially in an attempt to curtail the dominance of the dollar as a global currency. tributeIf the pace of economic globalisation and internationalisation is to continue unhindered, a cornerstones upon which it willing rely for growth, stability and sustainability, is the global earnest environment. Prior to the end of the insensate war, as Buzan and Waevers (2003.p.3) study shows, security operated within a naive bipolarity system between the two superpowers, the U.S.A. and Russia. At that time global security alliances and rivalries were clearly defined. The Western world generally was protected and allied under the American umbrella, whilst Eastern and communist countries gathered within a Russian alliance.One might have expected that the end of the cold war to have seen a movement to a more globally welcome security structure, possibly acquiescing to the US stance that it would don the mantel of bushel provider for w orlds security. Alternatively, with the emergence of the United Nation, a single multinational structure might have emerged. However, neither of these options developed, although the UN has had some special(a) success. Instead, post cold war security has developed into a more regionalist situation (Buzan and Waever, 2003, p.40-43). Areas of the world have formed more localised alliances. For example, with the make it of communism and the expansion of the EEC4, former Eastern Bloc states are contemptible towards a regional security structure that will be able to operate at the same level as the US. Similarly situations are developing in other areas of the world, such as South East Asia, China and Russia. This has led to an increase in rivalries. For example, an element of rivalry has developed between the EU and US that did non previously exist.The development of these wise regional alliances have, in some cases, successfully challenged the superpower dominance in issues of int ernational concern, leading to more balanced resolutions of international disputes, examples of which can be seen in less US policy dominated decisions being make by the UN Security Council. The theory is that RSCs5 are seen to be the foundation for a more successful future approach. The key to this, as the Buzan and Weaver (2003. p.52) study outlines, is their ability to address and involve themselves in security issues within the domestic, regional and global arena.ConclusionThe conflict of the present mix of alliances and rivalries with the modern worlds economy will have a significant impact upon the drive for harmonisation. The inherent fear of the west in respect of the dispraise of their economy as a result of the strengthening of emerging nations economies is obstructive this process. As the Economist (2005) put it, News that the peril to the east is growing even faster than expected is the last thing politicians in the developed world wanted to hearThe WTO (briefing 200 6) suggests that a continued move towards free trade would address many of the problems that have been discussed in terms of the sodding(a) global structure for production, knowledge, finance and security. However, achieving unanimity of international agreement in a world where individual nations demands are have significant splendor is not going to be easy.ReferencesAtkinson, William (2003). Mexico or China? Lower costs tip scales toward Far East. Purchasing. 17 April 2003.Blair, Tony (2006). Foreign Policy obstetrical delivery 3. Speech to the Australian Parliament. Australia. Retrieved 16 November 2006 from http//www.number-10.gov.uk/output/Page9245.aspBorrus, M, Ernst, D. and Haggard, S. (2000) International Production Networks in Asia contestation or Riches. Routledge. London. UKBriefing (2006). 10 Benefits of WTO trading system. World Trade institution. Retrieved 17 November 2006 from http//www.wto.org/english/res_e/doload_e/10b_e.pdfBuzan, Barry and Waever, Ole (2004). R egions and Powers The Structure of International Security. Cambridge University Press. Cambridge, UKCastells, M. (2001) Information technology and global capitalism in W. Hutton and A. Giddens. (eds.) On The Edge. Living with global capitalism, London Vintage.Editorial (1999) DaimlerChrysler not to hike stake in Mercedes Benz India for now. United News of India, 30 April 1999.Editorial (2005). Chinese economic policy. The Economist, 17 October 2005Pettis, Michael (2001). The Volatility Machine Emerging Economies and the menace of Financial Collapse. Oxford University Press Inc. US.Shaw, Martin (ed.) (1999). Politics and Globalisation Knowledge, Ethics and Agency. Routledge. London, UK.Taylor, P.J. (2002). New semipolitical Geographies Twixt Places and Flows. The Students Companion to Geography Rogers, A and Viles, H.A. 2nd ed. Oxford Blackwell, pp. 113-7.Venables, Anthony. J. (2005). economical Geography spatial interactions in the world economy. Oxford Handbook of Political Eco nomy. UKFootnotes1 World Trade Organisation2 North American Free Trade Agreement3 Brackets added4 European Economic Community5 Regional Security Complexes, Buzan and Waever (2003, p.3)