Since primordial times, free trade, both international and domestic, has helped civilizations evolve. It has made humanity reach far and wide for exchange of excess assets with lesser to not-found assets, creating a resource balance and fulfilling human requirements.
It has made this planet more technological and sustainable. But at the very same time, it has created a class of people richer and the other poorer -- a tradition of exploitation.
Leaving aside its detriments, free markets will attract greater foreign investments and promote economic growth in lower-middle-class countries like Bangladesh, where it’s rapidly transforming from an agro-dependent economy to a more industrialized economy.
A free market allows people to do whatever they want, who in turn takes advantage of the people living below the poverty line and giving birth to monopolies.
Generally, the section of people who work directly to prompt goods/services, are evicted from their ancestral homes and forced to be engaged in labour. It is even discerned that they are harassed or killed while trying to resist.
Free market trades give rise to what experts are calling “modern-day slavery.” In short, free trade markets have given rise to multifarious criminal activities ie drug and human trafficking, migrant labours, etc.
Though there exists a general notion of achieving maximal productivity with least expense, traders are going to inhuman extents to reduce the cost.
In extension, one additional major flaw in free markets -- due to the tendency to achieve higher profits and existence of independence of product exchange -- traders reduce the accessibility of regional people to get access to their own regional resources.
This signifies that goods/services are shipped out before fulfilling requirements of the regional population. This is an inhumane international strategy of developed nations who lure potential traders into selling huge regional resources for petty money.
This gives rise to four different situations -- developed nations are getting more resourceful, local traders are being richer and people of developing nations are being exploited.The fourth, and most alarming defect of all, is that money and assets are getting concentrated in the hands of a few people.
Oxfam’s yearly inequality report gives us a damning indication of this disparity -- 82% of the entire global wealth created in 2018, went straight into the pockets of the richest 1% of the world’s population. The poorest 50%, on the other hand, received 0% of that wealth.
This situation has gotten extremely out-of-hand in a developing country like Bangladesh.
According to the estimates by the Centre for Policy Dialogue (CPD), wealth inequality in terms of Gini coefficient -- an economic term to gauge income or wealth inequality on a scale of 0 to 1, in which 1 represents perfect inequality and 0 signifies perfect equality -- stands at a staggering 0.74, whereas the Gini coefficient for income inequality is 0.48.
Bangladesh has been ranked the fastest growing country with an increasing number of rich population in the world. Not taxing for goods or services or illegally evicting it has led Bangladesh to this horrifying situation.A study of finance ministry found out that 45-65% of our assets in our economy do not get taxed. As a result, traders take advantages of this independence.
Though an almost economic equilibrium is achieved from these trades, a section of people has to pay a huge price for it. But I feel the perks of having a free trade economy in Bangladesh greatly outshines a protectionist government-controlled economy.
With evidence and logical reasoning, we can articulate that, free trade markets tend to have massive developmental aftermaths for any country. Free trade paves the way lower prices for consumers, accelerated export, benefits from economies of scale, and a wider choice of goods.
Free trade drives economic growth, enhanced efficiency, and increased innovation. As there lies a concept of reciprocation of specialization of a particular skill/commodity production, the usage of it spreads out of regional context and is utilized by bilateral traders.
This makes both sides fulfill their not-able-to produce good/services need and on the other hand, provide money in exchange of goods or services they don't need.Due to sweepstakes among manufacturing companies, the general population can afford better quality products at a much lower price.In addition, free market trades demonstrate a global phenomenon and has a much wider and global effect which accelerates overall economic maturation.
Due to nations trying to achieve an Autarky state, there arises a psychological need for a manufacturing company to do better than the other. Therefore, competition in free market trades drives these companies to increase output or improve efficiency.This then acts as a chain of advancement. Traders, then, try to focus on technological and infrastructural reformations to attain better productivity and efficiency.
The net income increases and as the manufacturing expands, there requires a need for more skilled man-power. Unemployment starts to dissolve. With people being employed, poverty begins to diminish and living standards go higher.These perks of free trade markets cannot be enjoyed in a protectionist economy where governments or business entities restrict trade by the implication of tariffs on imported goods, import quotas, and various policy-based regulations.
Although a small amount of protectionism is required to stop the extreme import of regional resources, illegal trafficking, and finding employment for local skilled manpower, free market trades and agreements surpass all these perks and leave room for improvement and provide sovereignty to consumers.
From a Bangladeshi point of view, we are a country of immense natural and artificial resources, and only if we can make proper usage of these, that day is not far away when we will be deemed a developed country.
Free trade will show us this way and put us on edge. So we must remove all kind of trade tariffs and non-tariff barriers to trade to accelerate economic growth and financial prosperity of the poorer precinct of Bangladesh.
Muhtasim Farhan is a freelance contributor.