REASONS FOR THE SPREAD OF THE GLOBAL ECONOMIC MELTDOWN

                 REASONS FOR THE SPREAD OF THE ECONOMIC MELTDOWN

There are several reasons/factors attributed to the spread of the economic meltdown worldwide. Initially, it was thought to be an American thing as witness from 2008. American recession which was the definite result of decades of economic mismanagement in both public and private sectors, quickly attained the status of global meltdown in all the continents and espousing differing ideologies hence, institutions, organizations were caught in the web of multifarious networks of globalization.

The possible reasons are as follows:

o        The growing integration of markets in goods, services and capital across national                                   borders. This has been one of the global economic achievements of the World Bank, IMF as expressed by good leadership in these institutions.

o        The increasing computerization of transactions in businesses and all forms of trades, created a major relationship and friendship among nations. Hence, nations depend on each others in their economic survival and the pursuit of their development agenda.

o        The increasing employment of internet in domestic and foreign transactions created some incredible facilities/services that better facilitated interdependency of nations.

§         The growing importance of networks which easily transmit local economic trend into a global phenomenon has been of global usefulness.

o        The unimpeded flow of capital i.e. Foreign Direct Investment and portfolio between countries is a clear indication of oneness among nations.

o        Another area in this direction is the World-wide adoption of reform packages that emphasize deregulation and liberalization as propounded by the World Trade Organization. This truly, is a global thing.

o        International competitiveness in production of goods and services determined by efficiency and productivity instead of resource endowment has kept every nation dependent on each other.

o        Obviously, with the emergence of globalization, economic crises can no longer be confined to one country or an economic community. It easily spreads to encompass the global economy.