Politics of the Global Economy

This study analyzes the impact of political issues on the global economy, focusing on the war between North Korea and the US. It explores the consequences of the conflict on trade and commerce and provides recommendations for resolving the conflict and promoting economic growth.

Running head: Politics of the global economy
POLITICS OF THE GLOBAL ECONOMY
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Politics of the global economy
Introduction
Current issues that are being popped up by the political economy are mainly influencing
the modern world of business. Most of the modern and developed nations are looking to counter
the political conditions and issues that are currently decreasing the development of the economy.
Moreover, the development of resources will not only indulge the economy to identify the
counter attacking policies that will minimize the risk of global political concepts. The study is
significant in the sense that it will analysis the nature of the problems that are being associated
with the geo political factors that is mainly affecting business. This study is significant in the
sense that through the identification of political factors is going to increase the overall efficiency
of the economy through the performances of economic factors. The studies will however,
increase the resources utilization and mitigating the negative factors will help in the development
of economy.
Problem statement
One of the current issues that are popping up in the global political contexts is War
between North Korea and the US. The situation is important for the global perspective in the
sense that both US and North Korea are living high based on the capitalist theory. This is
important in the sense that through the increased level of capitals within these two countries are
indulged in better level of mutual spat within the economy (Baylis, Smith & Owens, 2017).
Throughout the development of spat, both North Korea and US will be heavy on each other if
they indulge in the war. In recent times, Korea has tested many missiles and nuclear tests.
Responding to this situation, US president Donald Trump called North Korean president as
“Rocket man” and both of them exchanged threat and insults to each other whenever they met in
global summits and international conferences (Eckhardt & Poletti, 2016). Even the US economy

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also threatened to destroy the North Korea if they want to attack the US. The fear of US attack
was gasping on the North Korea not from recent past but the fear started in the year back 1950.
During this time, the president Harry Truman claimed that the future conflicts among these two
would see the use of nuclear and atomic weapons. The main problem is that if these two
countries indulge in war then the global economy will be highly affected (Falkner, 2016). The
main reason behind this thinking is that both of these countries are playing significant role in the
world trade. North Korea is one of the countries that are continuously increasing their defense
and they are continuously affecting the world economy through the innovations that are being
made in their technologies.
On the other hand, the US being one of the countries that is highly depending on the power of
capital is having influence on the global interest rates. The after consequences of the war will be
faced by the developing nations like India, and other countries those are depending on these two
countries. Most of the developing nations depend entirely on the trade and commerce with these
two countries. The incorporation of war between these two countries will increase the price level
in the countries that are doing trade with these countries (Fukuda-Parr, 2016). This is because,
due to the presence of war, the terms of trade will be heavily affected and it will pose a threat in
the course of development. Due to this impact, both the economies will be aiming to increase the
development of resources and is aiming to maintain peace within the economy. On the other
hand, through the war, both of these countries will be facing long-term consequences, as man-
made crisis will be created.
Background of study
The background of the study date back to 1950 when the first nuclear plant was build in
1980 in the region of Yongbyon by North Korea taking the help of Soviet Union or Russia.

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North Korea became the member of Nuclear Nonproliferation Treaty (NPT) in 1985 and signed a
a treaty in 1991 with its rival South Korea and agreed to the fact that they will not use or
manufacture nuclear weapons. In the year 2001, the Clinton government tried to make a deal
with the North Korea. Initially the Clinton government had blocked all the facilities that are
being given to Yongbyon facility and later on, the Clinton government chose to make negotiation
with Pyongyang. In October 1994, the North Korean president chose for the forced agreed
framework negotiation that forced the economy to freeze all the nuclear operations that are being
done within the economy and agreed to normalize the relationship with the US government (Jr,
2019). The US government took this decision because they were losing the support of USSR and
their strongest challenger in form of China was moving towards the support of North Korea. In
the era of Clinton government negotiations continued regarding the testing of the nuclear
reactors and missiles testing.
The situation was not up to that much level when the Clinton government left the throne
and George W. Bush took the charge. He postponed any kind of talk regarding the development
of economy and regarding the testing of the nuclear weapons. During the phase of 2001-2003,
North Korea warned the US government that if the tough talks continue then it would force them
to react strongly. Even in 2002, state union Bush enlisted North Korea within axis of evils and
claimed that North Korea is enriching Uranium. The Bush government also abolished even the
fuel oil shipment agreements that were made by the Clinton government. At the end of 2002,
North Korea ordered International Atomic Energy Agency (IAEA) officials to go out of the
country. Now most of the economists claimed this period of 2001-2003 as missed opportunities
if the North Korea had not enriched uranium and US had moved in to making the agreed
framework the situation would have been different (Judd, 2015). Current situation that is

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happening within the both economy is really creating a worry for the other economy to indulge
the development of trade and commerce. However, in 2003, the six-country talk had given some
lights of hopes. The countries that were indulged in the talk were US, North-Korea, South Korea,
Japan, Russia and China.
Rationale of study
The rationale of the study will be mainly aiming to increase the development of better
relationship between the North Korea and United States and it will highlight the consequences of
the war if both the countries are indulged into it. The joint statement signed in 2005 forced North
Korea to move towards the Nonproliferation Treaty and will allow the IAEA officials to carry
out their inspections. On the other hand, the US and South Korea has agreed not to deploy
nuclear weapons on the southern peninsula of the North Korea and US and Japan have agreed to
move towards normalization. However, the US economy did not stopped to harm the North
Korean economy. In 2006, the USA angered the North Korean by targeting a small bank in
Macau.
The US economy decided to freeze an amount of around $25 million in the Banco Delta
Asia in order to punish the North Korean’s monetary policies. Many North Koreans were using
this bank for a long time. This action forced the North Korea president to indulge both verbal and
real actions against the US decisions. The year 2006, saw the first testing of the nuclear weapon.
Responding to the nuclear explosion, the economy of North Korea was forced to stop the process
of nuclear productions and they even disabled the functions. On the other hand, the North Korea
would have received the fuel in oil and they claimed that US economy should remove the
restrictions of the import of oils claiming as one of the state funded products on terrorism. In
2009, the government under the regime of Barrack Obama claimed that if any allied country is

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willing to improve their relationship with the US government then they will be willing to extend
their hands. It has been seen that in the recent times, the development of the economy is possible
in the sense that it will allow the economy to indulge the development of resources will bring the
information and in the phase of developing nations, the indulgence of war will not be beneficial.
It is important in the sense that most of the developing nations will increase the cost of the
production and will not help in the development of future trends. The rationality of the study is
lying mainly for the development of economic resources that will not only include the
development of resources but will also allow the economy to increase the trust on the
international trade policies. On the other hand, the development of international trade policies
and regimes will mainly include the development of better incorporation of resources.
Analysis
The year 2017 saw the war of words between the US president and North Korean
president. This year was an important year for the history of North Korea as the North Korea
successfully launched ballistic missiles in July and that is capable of reaching Alaska. Not only
this, the North Korea has successfully also launched a hydro bomb and the reaction to this bomb
was claimed to be the biggest reaction at a rate of 250 kilotonnes. US president claimed that if
US need to test its ability then the North Korea would be seriously destroyed. Calling the North
Korean president as “rocket man” and claimed that he is one a suicide mission for himself and
for his regimes. The development of resources will automatically allow both the economy to
increase the war possibility but that will not be permanent solution to the problem. Responding
to this situation, the North Korean president called US president as “mentally deranged” and he
should prepare himself for threatening to destroy North Korea. Kim said the technology and the
choice of the path that he has chosen is correct and will follow the consequences. North Korean

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president is confident about the development of better relationship between the two countries US
and North Korea. This is important in the sense that it will definitely increase that both the
parties have involved in increasing their spending on their military expenses. On the other hand,
through the development of the military expenses both the countries will be aiming to increase
the development of strong defense.
The North Korean economy has claimed the US economy as the hostile policies and is
aiming to increase the level of negotiations so that they can maximize the their economic reach
and will readily highlight the terms and conditions that are helping in the development of the
laws and regulations that are being formulated in the international border. On the other hand,
using the resources development policies will have direct impact on the rate of productivity of
both countries. Previously for some reasons, both the states were having joint military actions
and current situation among them is posing threat (Medie & Kang, 2018). This is highly
important issues and needs to be resolved so that the further problems are not escalated.
Moreover, war in two developed nation will automatically upsurge the prices prevailing in the
global level will hamper productivity in developing nation. The “denuclearization of the Korean
Peninsula,” that was officially described in 2013 means that US government should remove the
nuclear threat to DPRK. On the other hand, through the development of denuclearization of the
Korean Peninsula will automatically allow US government to remove US military troops from
Korean peninsula.

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Recommendation
From the whole study it can be recommended that in order to increase the economic
growth of both North Korea and US both the parties need to stop this threat of going into war
and in order to indulge the development of economic terms and conditions, both the state will be
willing to minimize the war spat. Both of them should indulge in focusing on the international
trade and commerce that will not only increase the resources distribution but will also increase
the stability within other developing nations. Both the countries will have to understand and
analysis the current economic conditions regarding the development of resource. Improving the
trade and commerce will highlight the economic conditions that will not only increase the overall
efficiency but will also indulge the economies so that focusing on long run will automatically
indulge the development of resources in form of both human and capital resources.
On the other hand, North Korea, China and Japan are having huge potentiality in their
future markets will increase level of employees. It is one of the important potentiality that the
economy like US should identify and focus on the development of the economy so that they will
not have to face labor upturns. This is because, most of developed nations will use upgraded
technologies in form of capital-intensive methods. Moreover, through the development of highly
developed nations will not only include the development of resources will automatically allow
the countries to counter the anti-political factors such as foreign invasion. Moreover, the
development of resources will be helpful for the economy to bring the indulgement of investment
within the economy is going to increase the productivity. All the economists will be hoping to
increase the development of negotiations between these two countries to stop the spat that is
having impact on the long run performance of these two economies.

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Better and effective government policies will be helpful for the development of
better solution to the political problems. On the other hand, policies that are minimizing the
political externalities will bring better accessibility to the future policies and production ability.
The economists are claiming the fact in order to indulge the development of resources will not
only improve the human resources but the continuous spat will reduce terms of trade. This is
important in the concept of developed nations will be willing mainly to increase the trade and
commerce.
Conclusion
The whole study has concluded the fact that in order to increase the development of
resources and will be willing to increase the development of policies. The political spat between
the North Korea and US are going to indulge the resources and will boost up the military defense
along the border. In order to indulge the development of the economic background of both
developed nations will automatically increase resources that will not only indulge the economy
to bring commitment towards the economy but will also improve the economic position.

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Reference list
Baylis, J., Smith, S., & Owens, P. (Eds.). (2017). The globalization of world politics: An
introduction to international relations. Oxford University Press.
Eckhardt, J., & Poletti, A. (2016). The politics of global value chains: import-dependent firms
and EU–Asia trade agreements. Journal of European public policy, 23(10), 1543-1562.
Falkner, R. (2016). The Paris Agreement and the new logic of international climate
politics. International Affairs, 92(5), 1107-1125.
Fukuda-Parr, S. (2016). From the Millennium Development Goals to the Sustainable
Development Goals: shifts in purpose, concept, and politics of global goal setting for
development. Gender & Development, 24(1), 43-52.
Jr., J. (2019). How U.S. Used a Bank To Punish North Korea. WSJ. Retrieved 12 May 2019,
from https://www.wsj.com/articles/SB117627
Judd, D. R. (2015). City Politics, Pearson eText. Routledge.
Medie, P. A., & Kang, A. J. (2018). Power, knowledge and the politics of gender in the Global
South. European Journal of Politics and Gender, 1(1-2), 37-53.
Owen, E., & Walter, S. (2017). Open economy politics and Brexit: insights, puzzles, and ways
forward. Review of international political economy, 24(2), 179-202.
Scoones, I., Edelman, M., Borras Jr, S. M., Hall, R., Wolford, W., & White, B. (2018).
Emancipatory rural politics: confronting authoritarian populism. The Journal of Peasant
Studies, 45(1), 1-20.
The U.S. and North Korea On The Brink: A Timeline. (2019). FRONTLINE. Retrieved 12 May
2019, from https://www.pbs.org/wgbh/frontline/article/the-u-s-and-north-korea-on-the-brink-a-
timeline/

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