The topic is ‘cost of political dispute between two countries’
This paper seeks to analyze the cost of political conflicts between countries. I will first look at the relationship that exists between political conflicts and the economy and then analyze the various theories that have been forward by various theorists regarding this relationship. Specifically I will analyze the Democratic Peace Theory and the Commercial Peace Theory. To what extent are they applicable in this discourse? This will be the pertinent question I will endeavor to explain and illustrate.
Peace is an important piece in so far as economic stability is concerned. There can be no economic development in the absence of sustainable peace. Thus, political disputes influence commerce in monumental proportions. Two countries need engaging in commerce must be ones that have cordial relationships. This is the only bond that provides a platform for the conduction of trade and commerce. When this platform is removed there can be no commerce or trade.
It has also been argued that trade could actually promote peace. In this perspective, trade is the solution to political conflicts. If a country needs particular products that could be obtained cheaply only from this one country with which they have a conflict, they would be forced to solve the conflict they have amicably to be able to benefit from trade. This way, trade facilitates peace.
Theoretical Conceptions of political disputes
Various theories have been forward to explain the relationship between political disputes and commerce and their implications. Some of these theories include;
- Democratic Peace Theory
Proponents of this theory posit that democracies are not involved in disputes or war. They believe that globalization of liberal democratization is a fundamental step towards the realization of a peaceable world. This theory suggests that two democratic countries cannot have political disputes under any circumstances. Accordingly, they can be no economic costs. The reasons they support of this theory is that democratically elected leaders have greater obligations in the maintenance of peace (Reiter, 2015).
These leaders would exhaust negotiations and other dispute resolution mechanism. Democratic states are believed to be more accountable and transparent with more checks and balances. These are the mechanism that these states use to avert a crisis or dispute. To this end it can be said that no political dispute between two democratic states can persist without being resolved on time. Thus, a political dispute will not have serious ramifications on a particular economy.
However, critics of this theory argue that the Democratic Peace Theory is not binding. In fact evidence can be adduced of democratic states that have been involved in conflicts and war. It is during this period that commerce is affected immensely. For landlocked countries that rely on their neighboring country which they have a dispute with for imports and exports, they stand to lose so much.
Commercial Peace Theory
Proponents of this theory posit that trade and commerce are the main obstacles to emergence of disputes. According to them, countries that trade have major interests at stake to entertain any sort of dispute likely to hamper their commercial interests.
Cost of Political Conflict between two Countries
One of the immediate costs of political Conflict between two countries is economic stagnation. When two countries are at loggerheads, they would usually impose sanctions on each other. These sanctions have severe implications on their economies. For instance, forex exchange rates change very fast. This affects trade between the two countries. Usually the cost of imports and exports skyrockets forcing the exchange rates to change as a result (Peter Walton, 2002).
Political peace and stability is the mother of prosperity. The effects of conflicts between two countries could affect not only the two countries, but also the entire region. Countries are usually organized regionally in order to promote trade and commerce. In addition to that, usually the citizens in a particular region like for instance the European Union are allowed to work in other countries in the Union without being subjected to intense scrutiny. Where two countries are involved in a dispute, there is always a risk that the citizens of one country could be forced to leave that country. This leads to loss of jobs and spending especially when extraditing the foreigners.
The other cost of political conflict is directly related to the aforementioned point. In instances where foreigners are forced to leave a particular country in dispute with another, the particular country suffers immense economic failure. The foreigners who were heavily involved in business and other activities that stabilize the economy are hardly replaced immediately. For instance in the case of Zimbabwe, where the president ordered that all the British land owners and foreigners to leave the country, huge vacuums were created in the country’s economy by these departures. Zimbabwe’s economy has never recovered ever since. In fact, the low number of doctors and teachers has even forced her to look for human resource from other countries in Africa such as Kenya.
The cost of political conflicts between two countries is not only felt economically, but also social. The social system of a country could collapse when the two countries are involved in a long dispute that cannot be solved promptly. A quintessential example is still the case of Zimbabwe. Due to her conflict with Britain that stemmed from the British colonizing Zimbabwe, President Robert Mugabe decreed that British citizens leave Zimbabwe. When this happened, the medical sector collapsed immediately. Majority of the qualified doctors in Zimbabwe then were the British. The education sector suffered the same repercussion. Children could not attend school because there were very few teachers and doctors.
Political conflicts between two countries could lead to the imposition of sanctions on a country by the international community. The United States of America has had a long standoff with Iran on the question of nuclear power. This has led to the imposition of sanctions on Iran to curtail its ability to trade with other countries. The allies of the United States of America have categorically refused to engage in trade with the Republic of Iran. The people who suffer the most from these sanctions are Iranian business people who can no longer engage in trade with foreign companies.
Further, the small courtesies that are usually extended to foreign citizens of countries in a cordial relationship are often denied. Where citizens did not require a passport to enter into another country, in times of conflicts they might be required to get travel documents. In some instances, citizens from warring countries could be denied entrance in the other country.
In conclusion, the cost of political disputes between countries is very expensive bear. As illustrated in the essay, this cost is not of an economic nature only but has social implications as well. As such I opine that the theory of Commercial Peace and the Democratic Peace Theory be observed by countries before they engage in a dispute. With the advent of dispute resolution mechanisms such as Arbitration, mediation and negotiation disputes should not be allowed to persist before they are resolved. Government leaders should consider the economic and social interest at stake when such disputes are not solved.
Peter Walton, P. D. H. D., 2002. International Business. New York: Cengage Learning EMEA.
Reiter, D., 2015. Oxford Bibliographies: Democratic Peace Theory. [Online]
Available at: http://www.oxfordbibliographies.com
[Accessed 28 June 2015].