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Tuesday, November 01, 2005

government and the changing economy

The world is in a changing state. The economy is continually altering its demand and services. This no more prevelant than in China and India. These countries have shown incredible growth the last 20 years. It is projected that India will grow seven percent this year and the next. This changed the lives of millions of people. The issue has now become the government structure of both countries.

India is a communist nation. The economic prosperity has been largely provided by the Prime minister, Manmohan Singh. As stated by the author, "Communists have more or less brought Mr Singh's reforms to a halt. He has been unable to continue the task of privatising the plethora of inefficient state-owned businesses. He has found it almost impossible to ease the system of caps that limit foreign direct investment in many big sectors, notably retailing. And labour market reform is not even being discussed." This is going to hurt the economy. Liberty has come to a halt, and this is the result. The leader of the country, Sonia Gandhi, wants to take a more religious position to the economy. The position, however, is going to result in a slower economy.

China is also a booming economy. They have recorder the largest continued increase in economic growth the world has ever seen. The spotlight for the government is shifting, however. There has been an increase in riots and demonstrations because of the governments overlook of the poorer sector. The corupt government is creating a rippling effect that may slow the economy down.

Libetry is a concept that many people take for granted. It gives us freedom to practice religion, speech, demostrate, and buy and sell goods. The interaction between the government and the economy is a very tight line. If there is any discourse between the two, it can result in turbulant times. The practice of liberty as an economic idea results in a market that can buy and sell goods and services at the price decided by the market. When the government interacts it results to inefficient transactions.

The change in the governments focus in China and India will change the way the economy if acting. Only the future will tell if they can effectively change the structure in a posative way. This is a prime example of government structure and the economy, mainly that liberty and free-markets are the best methods to initiate growth.

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