JC History Tuition Bishan Bedok Singapore - How did trade protectionism affect economies in the 1970s - JC History Essays - Global Economy Notes

How did trade protectionism affect economies in the 1970s?

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Why did countries engage in trade protectionism?
In view of the Golden Age of Capitalism that took place from 1945 to 1973, the Bretton Woods System was established, in which the General Agreements on Tariffs and Trade (GATT) facilitated the liberalization of world trade. Over time, free trade seemingly proved beneficial to trading partners, as evidenced by benefits like access to larger markets and cheaper raw materials.

However, international trade also meant that firms were open to more intense forms of competition. Clearly, developing nations were disadvantaged due to obstacles like inadequate infrastructural support and financing. In contrast, developing nations possessed the capacity to support their multinational corporations (MNCs) in maintaining international competitiveness. Therefore, some member nations gradually imposed trade protectionism, thus reversing the liberalization effects caused by GATT.

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 2: Reasons for problems of the global economy 

In the subsequent sections, we will study the limitations of free trade and the methods of protectionism that eventually caused the slowdown in the growth of the global economy in the 1970s and 1980s. Students should pay attention to the significance of trade protectionism with respect to other contributing factors that affect the Crisis Decades, such as the Third World Debt Crisis and the Oil Shocks.

1. Limitations of Free Trade
Although free trade is arguably beneficial to most economies, critics of economic liberalization remained hesitant to embrace this policy approach.

One reason is that free trade leaves many economies vulnerable to the volatile international markets. Trade-oriented growth can be disastrous as the fluctuating business cycles determine the growth and decline of economies.

Furthermore, should firms remain incapable of coping with international competition, their closure results in the rise of unemployment, thereby jeopardizing the social and political stability of nations.

2. [Developed Nations] Trade Protectionism: Rise of Non-Tariff Barriers (NTBs)
As such, governments in the industrial world introduced protectionism. In general, these measures can be grouped under a common type, known as ‘non-tariff barriers’ (NTBs).

NTBs comprised of different versions, like the provision of subsidies to local goods, strict standards and voluntary export restraints (VERs). For example, the US introduced the VERs in the 1980s, which affected the Japanese automakers. The US government perceived the increasingly popular Japanese automobile exports to be a significant threat to its trade position. In 1981, US introduced a VER in which Japan was pressured to reduce its export volume of cars. This created an artificial shortage of Japanese exports, thus raising their prices. As such, American automakers could profit from this effect.

Consequently, the share of imports restricted by NTBs increased extensively in the developed world, such as USA and Japan, thus causing a fall in the world output.

3. Consequences: A slowdown in the global economy
As a result of trade protectionism, the world economy experienced a major slowdown, which was further exacerbated by other problems like the Oil Shocks and the Third World Debt Crisis.

For example, the imposition of trade protectionism meant that MNCs were less mobile. Therefore, the the surge in market pessimism caused the decline in trading and investment activities. Given that these economies activities are vital for growth, the use of protectionist measures resulted in the economic slowdown in many developed nations.

What can we learn from this case study?
Consider the following questions to understand this economic issue:
– How far do you agree that the Crisis Decades was primarily caused by the rise of trade protectionism in the 1970s? [to be discussed in class]

In view of the trade protectionism problem that undermined the development of the global economy, we advise students to apply this knowledge to JC History essay questions. This is to ensure that what you know can be understood and applied effectively. Join our JC History Tuition and learn to synergize your knowledge of various factors to form persuasive and logical arguments. We teach students to do factor analysis and comparison through numerous class practices and discussions.

The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Bishan Bedok Tampines Singapore - What caused the Third World Debt Crisis - JC History Essays - Global Economy Notes

What caused the 1980s Third World Debt Crisis?

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What happened during the Third World Debt Crisis of the 1980s?
In the 1970s, developing nations were in need of financial support to carry out their economic development. As such, the governments took loans from international banks and developed nations. However, poor resource management resulted in the accumulation of debts, which was worsened by external factors like petrodollar recycling. By 1985, the total external debt rose to $1,017 billion, causing severe disruption to the international banking system.

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 2: Reasons for problems of the global economy 

In the following sections, we will look at the contributing factors of the Third World Debt Crisis and its consequences on the global economy. This case study is crucial as students are expected to be weigh the significance of the Debt Crisis, with respect to other factors like the Oil Crisis of the 1970s and trade protectionism.

1. [OPEC] Cause #1: Petrodollar Recycling
One of the major contributing factors of the Third World Debt Crisis was related to twin oil shocks in 1973 and 1979. The OPEC (Organization of Petroleum Exporting Countries) profited tremendously from the artificial oil shortage, thus accumulating ‘petrodollars’. With these excess profits, the OPEC members invested in international banks. Subsequently, these banks lent money to developing countries.

However, as these developing nations accepted loans to purchase raw materials and oil to facilitate economic development, the external shocks in the global market led to the expansion of foreign debts.

2. [USA] Cause #2: Volcker Shock
The second contributing factor relates to the US government’s response to the high inflation rates that plagued their economy. The Chairman of the Federal Reserve, Paul Volcker, proposed the increase in interest rates to combat the double-digital inflation caused by the 1979 oil shock.

The Federal Reserve hiked its interest rates from 10.25% to 20% by March 1980. Consequently, higher interest rates led to higher costs of loan repayments for borrowers. For example, the total interest payment for Latin American countries increased by 360% from 1978 to 1983.

3. [Third World Nations] Cause #3: Mismanagement of Loans
Internally, it can be argued that some of these debtor nations were ineffective in managing their loans. In particular, the money was used for other purposes, besides economic development. For instance, inept leaders diverted the loans to the purchase of military equipment.

Besides, a large proportion of the loans were used to purchase oil and inflated prices. As a result of the interest rate hike (as discussed earlier), loans were also used to finance interest payments. Hence, it is clear that some of these nations were unable to repay their loans.

4. [Third World Nations] Consequence #1: Economic slowdown
In view of the debt accumulation, one significant impact is the slowdown in economic growth for debtor nations. Governments were unable to focus on economic development as they lacked the finances to function. Furthermore, Third World nations experienced a decline in living standards as many citizens suffered from extreme poverty.

Latin American countries, such as Mexico and Brazil, defaulted on loans, which caused severe disruption to the international financial system. For example, Mexico declared its inability to finance the loans in Aug 1982, which caused a cascading effect on other neighbouring countries.

5. [IMF] Consequence #2: Washington Consensus and SAPs
As such, these countries turned to the International Monetary Fund (IMF) for solutions, such as debt re-scheduling or even cancellation. the IMF proposed a ‘bailout’ strategy, which was known as the ‘Structural Adjustment Programmes’ (SAPs).

To ensure these debtor nations are committed to the repayment of loans, the IMF imposed a set of strict conditions before loans were handed to them (i.e. Neo-Liberalism). In short, countries must adopt a policy of macroeconomic stabilization, trade liberalization and privatization.

Contrary to IMF’s expectations, the bailout was more of a hindrance than help to the indebted countries. For example, governments were forced to cut spending (i.e. austerity measures) to reduce debt. Yet, this meant that less subsidies were given to keep the price of necessities low, thereby resulting in higher cost of living. Eventually, the aim of debt reduction was not achieved.

Note to students: In fact, this IMF ‘bail-out package’ was accepted by some of the Southeast Asian governments during the 1997 Asian Financial Crisis (Paper 2 Theme II topic), which also created problems for their economies.

What can we learn from this case study?
Consider the following questions to understand this economic issue:
– How far do you agree the debt crisis of the 1980s was more severe than the oil shocks of the 1970s? [to be discussed in class]

Following the thorough analysis of the Third World Debt Crisis, it is imperative to apply your newfound knowledge to practice questions. Sign up for our JC History Tuition and learn to form cohesive and persuasive arguments that answer a wide range of A Level History essay questions effectively.

The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Bishan Bedok Tampines Singapore - What caused the energy crisis of the 1970s - JC History Essays

What caused the energy crisis of the 1970s?

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What was the oil shocks about?
Following a period of rapid economic modernization, also known as the ‘Golden Age of Capitalism‘, the world witnessed a sudden turn of events that resulted in the gradual decline in this fast-paced growth, ushering the ‘Crisis Decades‘. The twin oil shocks that took place in 1973 and 1979 were the result of geopolitical conflicts that involved the key driver of the global economy – USA – as well as the OPEC (Organization of the Petroleum Exporting Countries) that dictated the output of oil. In general, the surge in oil prices dealt a significant blow to many economies, including USA, reflecting the significance of oil as an essential resource for households and firms.

Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 2: Reasons for problems of the global economy 

In the next section, we will look at the background causes to understand what happened during the energy crisis of the 1970s.

1. [USA] 1973 Oil Crisis: Causes
There were two major factors that contributed to the start of the 1973 Oil Crisis – the dismantling of the ‘Gold Standard’ (US Dollars -Gold) fixed exchange rate system as well as the Yom Kippur War.

On 15 Aug 1971, US President Nixon announced that the United States would cease to maintain the Gold-USD standard fixed exchange rate system, which was based on the 1944 Bretton Woods Agreement. Consequently, the loss of market confidence towards the USD resulted in its depreciation (fall in currency value). In contrast, many firms and investors valued gold, contributing to the surge in gold prices.

However, the depreciation of USD undermined the OPEC as their export revenue (earnings from the sale of oil) was in USD. Therefore, OPEC lost a significant proportion of its export earnings.

The second factor was the Yom Kippur War, which began on 6 Oct 1973. Following Israel’s victory during the Six-Day War in 1967, both Egypt and Syria deployed its military to attack Israel on a religious day for the Jewish population, known as the Yom Kippur. Several weeks later, Nixon sought Congress funding of $2.2 billion to provide military backing for Israel.

2. [OPEC] Oil Embargo of 1973: Consequences
In view of the American intervention in the Yom Kippur War, the OPEC members in the Middle East, such as Egypt and Syria, protested by engaging in an oil embargo. This embargo persisted even after the end of the Yom Kippur War, thus triggering a global energy crisis.

The price of crude oil surged from $3/barrel to $12/barrel in 1974. The oil crisis was arguably a major cause of the economic recession in the developed economies from 1973 to 1975.

In the US, the economy experienced stagflation, in which there was high inflation, high unemployment and slow economic growth rates. Unemployment rate peaked at 9% in 1975.

In the UK, it experienced a fall in GDP (Gross Domestic Product) by 3.9% in the same time period. Also, the UK experienced double-digit inflation that went beyond 20%.

3. [USA & OPEC] 1979 Oil Crisis: Causes
The energy crisis resurfaced in the late 1970s. Primarily, the Iranian Revolution of 1979 was a major contributing factor that led to the spike in oil prices. After the departure of the Shah of Iran, the world supply of crude oil fell significantly.

4. 1979 Oil Shocks: Consequences
Similar to the 1973 energy crisis, the oil shortage was detrimental to the oil-dependent economies. The price of crude oil increased to nearly $40/barrel from 1979 to 1980.

In the US, many households were forced to undergo conservation, since petrol and fuel were needed for transport and other domestic purposes (like cooking). Also, the automobile companies, such as Detroit’s “Big Three” (General Motors, Chrysler and Ford) suffered from the oil spike.

In contrast, Japanese manufacturers adapted to the situation by producing fuel-efficient automobiles, which then captured a significant market share in the global industry.

On a separate but related note, the OPEC earned a significant sum from the sale of petroleum exports – known as ‘petrodollars’. OPEC members then placed their earnings in international banks, which were handed out to developing nations as loans. Later, this petrodollar recycling process was known to have contributed to the ‘Third World Debt Crisis‘ of the 1980s.

What can we learn from this case study?
Consider the following questions to understand this economic issue:
– How far do you agree that the energy crisis of the 1970s was more significant than the debt crises of the 1980s in causing the problems of the global economy? [to be discussed in class]

Now that you have studied the key considerations, you can enhance your knowledge application skills through the answering of History Essay questions. Join our JC History Tuition and find out how we teach you to form clear and logical arguments to answer fundamental and complex questions effectively and efficiently.

The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Bishan Bedok Singapore - What caused the Sino-Soviet Split - JC History Essay Writing Skills Notes

What caused the Sino-Soviet Split

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What led to the Sino-Soviet split?
As part of the Cold War conflict, the two Great Powers (China and Russia) that share ideological similarities (i.e. Communism), political clashes had resulted in the deterioration of bilateral relations. From 1950 to 1979, the persistent sense of mutual distrust and antagonism have caused the outbreak of tensions that occasionally took the form of close military confrontation.

Topic of Study [For H1 History Students]:
Section B: Essay Writing
Theme II: Cold War in Asia [1945-1991] – Superpower relations with China (1950-1979): Sino-Soviet relations

In the following part, we will examine the major events that contributed to the deterioration in Sino-Soviet relations from 1950 to 1979. It is important to consider the roles of China and Soviet Union, especially the political leaders.

1. [Stalin & Mao] Sino-Soviet Treaty of Friendship of 1950
Following the Communist Party of China’s (CCP) victory during the Chinese Civil War, Stalin extended his invitation to CCP Chairman, Mao Zedong, resulting in the signing of the Treaty of Friendship on 14 Feb 1950.

For the People’s Republic of China (PRC), the Treaty offered both economic and security benefits. Soviet aid of $300 million in loans was handed out to China. Additionally, Russia offered security support for China. For Russia, the Treaty was beneficial as Stalin would gain from a new trading partner.

However, the Treaty had sowed the seeds of the Sino-Soviet split. Mao took offense at the unequal bilateral relations with Russia. For example, the above-mentioned Soviet loans had to be repaid with additional interest.

2. [Khrushchev & Mao] Khrushchev’s ‘Peaceful Coexistence’
In 1956, Soviet leader Nikita Khrushchev introduced a new Soviet foreign policy at the 20th Congress of the Communist Party of Soviet Union (CPSU) – Peaceful coexistence.

Khrushchev believed that continued aggression against the Western nations, especially USA, would eventually result in a nuclear war (i.e. Mutually Assured Destruction). Therefore, he proposed that the Soviet Union should coexist than antagonise Western, capitalist nations.

However, Mao criticized Khrushchev’s peaceful coexistence, labeling it as a ‘revisionist’ form of Marxism. In contrast, Mao advocated a firm belief that Marxism-Leninism would clash with Western ideology (capitalism and democracy), resulting in an inevitable conflict. Hence, ideological differences between the two leaders led to the widening Sino-Soviet split.

3. [Khrushchev & Mao] Mao’s Great Leap Forward
From 1958 to 1962, Mao implemented a large-scale economic and social campaign known as the Great Leap Forward. It was based on a traditional Marxist-Leninist method that focused on the mass mobilization of citizens for rapid industrialization.

However, the Great Leap Forward turned out to be a disaster. The inefficient model caused the estimated death tool of 56 million. Additionally, Khrushchev disagreed with Mao’s approach and withdrew Soviet support, thereby halting China’s nuclear programme.

4. [Khrushchev & Mao] Exchange of verbal aggression
In Jun 1960, the Romanian Communist Party Congress was held. During the meeting, both Khrushchev and Mao engaged in a ‘war of words’, in which they criticized one another publicly.

For example, Khrushchev accused Mao of being ‘a nationalist, an adventurist and a deviationist’. Similarly, Mao labelled Khrushchev as a ‘patriarchal, arbitrary and tyrannical’ Marxist revisionist.

5. [Khrushchev & Mao] Cuban Missile Crisis & Sino-Indian War of 1962
During the October Crisis, Mao accused Khrushchev of being cowardly towards USA, following the latter’s agreement to dismantle the missile bases in Cuba. Again, Khrushchev insisted that his foreign policy of peaceful coexistence was critical to avert a nuclear disaster. Yet, Mao argued that the Soviet Union had failed to support the communist revolution and lost its credibility as the leader.

Similarly, in Oct 1962, a border dispute between China and India resulted in a military confrontation. However, contrary to Mao’s expectations, Soviet Union did not provide security support to China. Hence, the Sino-Indian War had confirmed suspicions of a Sino-Soviet split.

6. [Brezhnev & Mao] Sino-Soviet border conflict
The period from Mar to Sep 1969 was arguably the peak of the Sino-Soviet split. In Mar 1969, the Soviet Union invaded China and occupied the disputed area – Damansky (Zhenbao) Island. The border conflict nearly led to the outbreak of another world war. The incident was a significant turning point in Cold War history as Mao sought rapprochement with the USA to avoid a two-way confrontation with the superpowers.

What can we learn from this case study?
Consider the following questions to understand the case study:
– How far do you agree that ideological differences were the main cause of the Sino-Soviet split from 1950 to 1970? [to be discussed in class]

Besides the consideration of the above-mentioned factors that affected the superpower relations with China, you can sign up for our JC History Tuition to develop effective critical thinking and essay writing skills.

The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Bishan Bedok Tampines Singapore - Key Events of the Cold War - JC History SBQ Skills

What were the key events of the Cold War?

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Following the assessment of the visual-based sources that cover the Emergence of Bipolarity, we will be examining text-based sources to have a more comprehensive study of this topic. This article will analyze the interactions between the key players, particularly USA and Soviet Union, based on the major events that took place after World War Two. This article will be applicable to students taking either H2 History or H1 History.

Yalta Agreement [24 March 1945]
During World War Two, leaders of the Grand Alliance (USA, Great Britain and Soviet Union) met to discuss plans for a post-war Europe, particularly Germany. Generally, there were three essential areas of consideration in the Yalta Agreement.

First, the ‘Declaration of Liberated Europe’ meant that the leaders were bound to oversee the conduct of free and fair elections. Second, a demilitarized Germany would be divided into four zones occupied by USA, Great Britain, France and Soviet Union. Third, ‘free and unfettered elections’ were to be held in Poland.

Unfortunately, the end of WWII led to the collapse of the Grand Alliance. Roosevelt expressed his concerns to Stalin over the ‘Polish issue’ as the Polish government remained under communist control. Subsequently, pro-Soviet governments were formed in Eastern Europe, with Czechoslovakia being the final country that joined the ‘Eastern Bloc’. Hence, the perceived non-cooperation of Soviet Union fueled the deep-seated distrust of USA and Great Britain.

George Kennan’s Long Telegram [22 Feb 1946]
American diplomat George Kennan delivered a long telegram to US Secretary of State James Byrnes as he was failed to convince US President Harry Truman to abandon the cooperative stance with Soviet Union. More importantly, Kennan outlined the communist threat that should not be left unchecked in Europe. Eventually, his writings have shaped the American foreign policy of ‘containment’ in the subsequent years, particularly Truman Doctrine.

Winston Churchill’s Iron Curtain Speech [5 March 1946]
At Westminster College, former British Prime Minister Winston Churchill delivered a historic speech (also known as the ‘Sinews of Peace’). In view of Kennan’s assessment of the ideological threat in Europe, Churchill stated that ‘an iron curtain has descended across the Continent.‘ Furthermore, he stated that the ‘Communist parties or fifth columns constitute a growing challenge and peril to Christian civilization.’ As a result, Churchill’s ‘Iron Curtain’ speech reflected the growing distrust towards the former wartime ally – Soviet Union.

Afterwards, Stalin responded to the speech during an interview with the Soviet newspaper Pravda. He refuted Churchill’s statements, claiming that the formation of pro-Soviet governments in Eastern Europe was an important security measure against a potential invasion.

Harry Truman’s Address to the US Congress [12 March 1947]
Following George Kennan’s Long Telegram, Truman was certain that the communist threat had to be dealt with. As such, the Truman Doctrine was initiated. During his address, Truman emphasized that American intervention ‘should be primarily through economic and financial aid’. As such, the US provided large sums to aid Greece and Turkey during the Greek Civil War.

Additionally, US Secretary of State George Marshall delivered a speech at Harvard University on 5 June 1947. He highlighted the altruistic intentions of USA as the provision of financial assistance to facilitate the post-war reconstruction in Europe was of great importance to many nations. Marshall stated that USA’s policy was ‘directed not against any country or doctrine but against hunger, poverty, desperation and chaos’.

The Berlin Blockade [24 June 1948]
Failure to achieve common consensus over the ‘German Question’ became a sore point for the Grand Alliance. Due to security concerns, the Soviet Union feared the revival of a former wartime enemy – Germany. Yet, the Western nations (USA and Great Britain) focused on post-war economic recovery, which was perceived by the Soviets as a provocative response.

Before the Blockade was imposed, USA and Great Britain combined their occupation zones into the ‘Bizone’. A year later, France joined and a ‘Trizone’ was created. More importantly, Germany was included as a recipient of Marshall Plan, which alarmed Stalin. The Allies were accused of violating the Potsdam Agreement.

On 25 March 1948, the Blockade was formed, in which Soviet military prevented the movement of supplies from West Germany to West Berlin. This prompted the Allies to capitalize on their air superiority, as seen by the Berlin Airlift. The Airlift provided numerous supplies to the Berliners and forced the Soviets to end the Blockade.

The Blockade was a major turning point during the Cold War as marked one of the closest point of military confrontation between the superpowers. Subsequently, Germany was formally divided into East and West Germany.

Are you ready to ace the GCE A Level Examinations?
In view of these historical developments, it is important that you apply your knowledge to practice questions. By doing so, you will develop the capacity to express your ideas in an argumentative format, which is critical due to the time constraints of the examinations. During the JC History Tuition, we teach students to write outlines and engage in class discussions to refine their answering skills.

The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.