Sample Business Paper on International Trade

International Trade

The article “How Corruption affects emerging economies,” by Bediako-Asante (2018) showcases the difference between the economies of corrupt and non-corrupt nations. It argues that economies of nations that are plagued by high corruption rates cannot thrive or be better than those of states that have high corruption prevalence. The article argues that the vice prevents natural laws of business from operating freely thereby jeopardizing economies. According to the World Bank, the average income that corrupt nations earn is approximately a third of that of countries that are not corrupt. It is unfortunate that no nation has been successful in eradicating the vice. Studies conducted on the same indicate that the level of corruption is higher in countries with emerging market economies as compared to in the developed nations, which have strong markets. According to the article, wealthy business owners often use money and connections to bribe officials in the business sector to manipulate international trade policies and mechanisms. They use such moves to become the sole suppliers of goods and services, that is, to gain a monopoly. The wealthy individuals do not compete against alternative suppliers; therefore, they sell low-quality products at high prices. The same is not likely to be witnessed in a competitive environment.

In international trade, some sectors prefer the tendering process, which plays a key role in the selection of suppliers that offer the best services and products quality and price-wise. It is unfortunate that in corrupt nations, unqualified suppliers are often awarded tenders through underhand dealings, an advantage that the suppliers earn through bribing those in charge of tendering. The transactions pave the way for excessive expenditures, particularly during the execution of projects (Bediako-Asante, 2018). Inequities and inefficiencies in use and allocations of resources then follow. Regarding corruption in international trade, companies often avoid registering with tax authorities thereby evading taxation. The failure to pay taxes has adverse impacts on the economies of nations given that revenue from taxation contributes significantly towards the GDP of a nation. It should also be noted that companies that are unregistered with taxation authorities go against employment rules and policies. For instance, most of these corporations offer wages that are lower than the minimum wages. Moreover, they hardly provide the right working conditions for the employees. Those who work for them grapple with the lack of medical benefits that the International Labor Standards provide.

One of the reasons for choosing the article is that it systematically describes the level of corruption in international trade and how it affects nations. Some of the aspects I learned from the article include the impacts of corruption when it comes to the economic development of nations, effects of companies failing to register with taxation authorities and agencies with the objective of evading tax, as well as the impacts of corruption in the tendering process. Indeed, the vice in question interferes with societies in that it compromises living standards and education quality among other factors that promote high standards of living. Corruption has far-reaching impacts from the international trade perspective meaning.  Nations, with the help of powerful international agencies, must eliminate the vice to prevent the progression of the problem. At the local level, nations can take measure to ensure that corruption does not thrive. For example, they can institute effective vetting mechanisms for tendering to ensure that the most competitive organizations win tenders. They can also come up with laws that impose heavy penalties against the corporations that break tax laws to deter other businesses from doing the same.

 

 

Reference

Bediako-Asante, S. (2018, January 29). How Corruption Affects Emerging Economies. Citi Business News. Retrieved from http://citibusinessnews.com/index.php/2018/01/29/article-how-corruption-affects-emerging-economies/