08 Role of Economics in IR
Great Depression¶
Countries did not perform trade, as exporting countries wanted to save resources
So many unemployed people were there in Germany, while the Jews were pretty well off; this was the appeal that Hitler had
The world realized that economics should never be a reason for wars again. If we are trading together, then there is more room for cooperation and less likeliness for wars (liberal view)
International Organizations¶
IMF, World Bank¶
When a country is defaulting, IMF gives them loans for development
eg: india in 1991, greece in 2010s
WTO¶
established the liberal international trading system
fairer than the UN, because it has no security council
Impact of Liberal Trading & Financial System¶
IMF Conditionalities require loan-taking countries to implement a liberal economy
The short-term effects were actually bad, because the sudden changes cause instability
EU took US to the WTO in 2018, because the US imposed tariffs on steel and aluminium imports from the EU
Bilateral Trade¶
Russia-Germany¶
Russia provides raw materials like crude oil and natural gas, Germany gives final goods like machinery
But in Dec 2021, Germany has threatened Russia to block the pipelines (and not import) if Russia does anything harmful to Ukraine
China-Taiwan¶
US-China¶
Russia-Saudi¶
Saudi wanted to reduce prices, but Russia did not want to. This shows that
India-Malaysia¶
Malaysia said something against India about Kashmir, and India banned Malaysia
China-Australia¶
Australia said that Covid-19 is a bioweapon, and China imposed tariffs