The Tightening Economic and Financial Ties among Counties
International trade began as a means to provide for a country’s needs. As capitalism spread throughout the world, the primary motive of countries changed from provision of necessities to maximizing their profits to maintain a strong, stable economy, and allow for continued development of their economies and their citizens’ well-being. The global balance was formed through international demand and supply on both economic and financial levels.
In the real economy, the efficiency of production in some countries, and the differences in production costs can lead them to export their products to other countries that have a demand for that product. On the financial level, each country strives to profit on its currency and hence lends to others. Yet, because the country needs money to keep up with government and public expenses, and to keep investing to create meaningful growth, it will also borrow from other countries.
Countries also diversify their investments among different countries to diminish the risk and to build a secure investment portfolio. Their wish to maximize their profits compels them to keep up with developments in industry, technology, and finance in other countries. Doing so has strengthened trade, as well as political connections among countries and throughout the global economic system. This is how the world has become irrevocably global and integral.