“Turning to a Market Economy” respond to the following: Many developing countries in the “Global South” turned to socialism in the past as a means to solve their economic problems.

“Turning to a Market Economy”  respond to the following: Many developing countries in the “Global South” turned to socialism in the past as a means to solve their economic problems. Now, in the light of the evident failure of socialism, many of these countries seek to create fast growth through the establishment of “market economies.” respond to the post below 50 to 100 words I studied Ethiopian economy.  Ethiopia till about twenty years ago was a socialist country.  It valued sharing and minimized competition.  It was highly regulated by the government.  Price, employment and opportunity to expand was all in the hand of the government.  Capitalism was introduced about twenty years ago where open market for business to control price, interest rates, to sell to anyone, and business are also permitted globally.  This has impacted positively the employment and the economy.  The countries GDP has grown about 10 percent each year since the new economy system.   I specualate the economy has lots of opportunity to grow especially since we have a very strong economic relationship with the outside country which never existed before.  Unfortunately Ethiopia’s main challenge is the population growth is one of the highest in the world.  As the economy growth has doubled in the last twenty years the population has triples since the lat twenty years.  Due to the shortage in supply the inflation has gone up to 35%. Open market policy is most effective because it encourages competition and opportunity for people to grow.   Socialism in the opposite discourages the economy because you are set to get same fixed compensation regardless of your effort.

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