Politics of the Global Economy

Running head: Politics of the global economy
POLITICS OF THE GLOBAL ECONOMY
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Word count: 2420

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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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Politics of the global economy
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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Politics of the global economy
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