Trade and Economic Growth in the 20th Century:
The development process during the 20th century was characterized by two distinct phases— the periods before and after 1950. During the first half of 20th century, the growth process was disrupted by two world wars. During the inter-war period occurred the Great Depression. A number of years were taken by the world economy to recover from it. Many countries suffered enormous damage due to war and the productive activity remained greatly disrupted.
As a consequence, economic growth was very slow and discontinuous. The index of world trade during the 20th century could increase from 100 to just 131 between 1913 and 1950. The growth rate of foreign trade on the average per decade in this period was only 6.9 percent. During the decade (1928-1938), the world output could grow at the rate of barely 1 percent essentially because of the global depression and the resultant protectionist policies followed by a large number of countries. However. to hier someone to write my essay on trade is always a good option for students.
In the latter half of the 20th century, there had been the co-existence of rapid economic growth and rapid expansion in world trade. That re-emphasized the notion of ‘trade as engine of growth’. In respect of the developed market economies, the average annual growth rate of real GDP at current prices during 1950-60, 1960-70 and 1970-74 periods were 4.1, 5.1 and 4.2 percent and the per capita real product in these countries over the same periods grew respectively at the rates of 2.8, 4.1 and 3.2 percent. When looking for someone to write my essay for me on topics like trade, always rely on experts.
The average annual growth rates of volume of exports for these countries during these periods were 8.6, 11.6 and 10.0 percent respectively. The share of developed market economy countries in 1960, 1970 and 1974 stood at 66.8 percent, 71.9 percent and 65.5 percent. It is thus clear that the latter half of the 20th century reflected a definite and strong association between high rate of expansion of domestic output and a high rate of growth of world trade.
In the case of the LDC’s, the picture was significantly different and pessimistic. The foreign trade had hardly a worthwhile propulsive role for the economic growth in these countries. At the best, expansion of trade kept pace with the growth of national income. In the case of developing countries, the average annual growth rates of real GDP during 1950-60, 1960-70 and 1970-74 periods were 4.7, 5.2 and 6.4 percent and average annual growth rates of per capita real product were 2.4, 2.6 and 3.8 percent respectively. A paper writing service online Is the best way to get pre-written essays on trade.
Even though their rates of growth stand well in comparison to those of the developed countries, the things were quite depressing in the matter of their foreign trade. During the periods indicated above the average annual growth rate of their exports were 5.2, 6.0 and 4.8 percent and their share in the world export, except the OPEC producers continued to decline.
In case of the LDC’s of Asia, the share out of world exports had not only remained extremely low, it had also shown a declining trend. In 1960, 1970 and 1974, their share in the world exports was just 1.6 percent, 0.8 percent and 0.7 percent respectively. The share of LDC’s including the oil-exporting countries declined in the world exports from 33.8 percent in 1928 to 25.2 percent in 1974. Their share in world imports marked a decline from 28 percent to 17.8 percent during this period. If oil-exporting countries were excluded, the picture was much bleaker.
Their share in world exports between 1928 and 1974 fell from 32.2 percent to 10.3 percent. In case of imports, their share had fallen from 26.9 percent to 13.8 percent in 1974. From the above data, it is very clear that the growth of world trade had not been commensurate with the growth of their GDP. Except OPEC group, which experienced tremendous expansion in their foreign trade and growth, the other LDC’s found that trade had not acted as an engine of growth for them.
An important feature of international trade in the 20th century was that the major part of world trade had been the trade among the developed countries themselves. It is true that their trade with LDC’s was not insignificant, yet its value was less than 28 percent of the total external trade of the advanced countries. The trade and economic policies of developed countries were essentially geared to promote trade and other economic relations with the developed world. A custom essay writer can write stunning essays on trade for students.
In the case of LDC’s the reverse was true. The trade with industrial countries was more important for them than the trade among themselves. The desired co-operation was never available from the advanced countries. They were not keen to permit the products of the LDC’s to have access to their markets. Such an attitude clearly had serious implications both for the growth and trade of the developing countries.