Political Science

The economy is a system by which individuals acquire their living. A country’s economy comprises the total of its economic activities. It presents the overall financial condition and denotes the country as an economic unit. Economic Development occurs when there is an increase in the standard of living of the population in the country. The per capita income is the best method of establishing a country’s economic development index (Panth 7). A country’s economy depends on its infrastructure, demography, average lifestyle, and natural resources. Classification of countries according to their economic sizes and the state of their development resulted in the category of countries as first-world, second, third, and fourth-world. The first world countries are capitalist and developed with the largest economies. Countries that are less industrialized than the first world countries are the second world countries. Third-world countries are underdeveloped agricultural nations, and fourth-world nations have a non-existent economy with indigenous individuals as natives. A country’s economic size can influence how the country relates to other countries. For instance, countries with massive financial measures tend to be respected in International forums, and their trade or international policy decisions affect other countries gravely. However, countries considered poor due to their economic sizes tend to lack an impact on foreign affairs. They are always affected by the decision of wealthy countries, and they cannot salvage themselves even if they wish to. The economic size of the Philippines, Cyprus, and Brazil affects their foreign decision-making in how they influence the decisions of other countries, defense, development assistance, how they attract foreign investment, and trade.

The Economies of Brazil, Cyprus, and the Philippines

Brazil has the largest economy compared to Cyprus and the Philippines. Brazil has a nominal GDP of $2.0 trillion and a GDP of $3.2 trillion (Appendix 1). The PPP puts nominal GDP in positions 7 and 9 (Elisha n.p). In 2016, Brazil recorded a GDP of -4%, 2015 -3.7%, and 2017 a growth of -0.2%. Brazil, in 2015, had a GDP per capita estimated at $16,000, whereas the nominal GDP had been established at $10,000. The country’s service sector contributes 76% to the economy, while agriculture and industry contribute 5.5% and 18.5%, respectively (Elisha n.p). In 2015, Brazil recorded an inflation of 7.27%, as 15.4% of the population resided below the poverty line. The country’s unemployment rate is 7.5%, ranking 126th regarding ease of business. Brazil’s labor force is approximately 109 million and is distributed as 15.7% in agriculture, 13.3% in industry, and 71% in service. Brazil’s debt accounts for 67.3% of the GDP, with foreign investment established at $0.36% trillion. The country’s revenue is at $0.63 trillion (Elisha n.p).

The Philippines has a more excellent economy than Cyprus but less than Brazil. The GDP of the Philippines in 2019 was $356 billion, and the GDP per capita was established at $3,280, according to the IMF (Pariona n.p). The country possesses a workforce of 64.8 million and a 4.7% unemployment rate. The service sector is the leading industry in the Philippines and contributes 55.9% of the GDP, and Agriculture contributes a GDP of 9.49%  (Pariona n.p).

Cyprus has the most miniature economic size compared to Brazil and the Philippines. Gross Domestic Product (GDP) in 2021 was approximately 27.72 billion U.S. dollars, and Cyprus’ GDP value represented 0.02% of the world’s economy. The GDP growth in Cyprus rose from -5.23% in 2020 to 5.51% in 2020 (Trading Economics, “Cyprus Full Year GDP Growth” n.p). Services such as tourism, real estate, and financial services are the backbone of the economy of Cyprus, accounting for approximately 80% of the GDP. The industry accounts for 10%, and agriculture accounts for 2%. The main component of the GDP is household consumption, which takes up 70% of the total use, then the government expenditure and gross fixed capital formation, which takes up 16% and 11%, respectively. The services and export of goods account for 55%of GDP and the imports 53% (Trading Economics, “Cyprus Full Year GDP Growth” n.p).

Effect of Economic Size on International Recognition

The strong economy of Brazil and the Philippines has put the countries in the global limelight. Brazil is defining and establishing a new worldwide leadership role like the Philippines. Coupled with India, Russia, China, and South Africa, the state is part of the BRICS group that leads emergent economies with its significant influence on global and regional affairs (Hanson np). Its massive economy was one of the primary reasons it hosted major international sporting events, the 2016 Olympics and the 2014 world cup, which the Brazilian government spent millions of dollars to host. Brazil’s economic size poses a challenge and simultaneously an opportunity to the U.S. since it intends to establish a strong partnership with the U.S. on energy, trade, and security matters. Although Brazil and the U.S. have a similar goal for establishing regional stability, Brazil holds a different approach to foreign policy from the U.S., which has often resulted in squabbles (Hanson n.p). Some of the opposing views the country has had from the U.S. is whether to establish a Free Trade Area of the American (FTAA), the U.S. embargo of Cuba, and Brazil’s vocal opposition to the war present in Iraq. The U.S. and Brazil have worked together on regional and bilateral issues despite the feuds. The cooperation between the governments has been significant on the energy issues. The two governments have agreed to increase ethanol use in Latin America to increase the world biofuel market. However, the friction in the collection of tariffs persists. The 54 cents on each gallon as a tax protects the U.S. domestic, corn-based ethanol from ethanol based on sugar produced at a lower cost. Although the legislatures of the U.S have offered to end the tariffs on ethanol, some of the segments of U.S. agriculture oppose the move to eliminate the tariffs. Policy Makers such as Thomas Shanon of the U.S. have claimed that the U.S. and Brazilian corporations over ethanol ought to be extended to broader partnerships (Hanson n.p).

Similarly, the massive size of the Philippines’ economy gives it a lot of influence in international affairs juat like Brazil. The Philippines’ foreign policy promotes economic diplomacy, enhances the nation’s security, and protects Filipino nationals who reside abroad (Global Security, “Philippines – Foreign Relations” n.p). In 1992, the Philippines adopted ASEAN during the Philippines’ initiative of declaration of the conduct of individuals in the South China sea targeted at conference building and evasion of conflict among the claimant states that included Brunei, Malaysia, Indonesia, and the Philippines. The Philippines, in its foreign policy, cultivates useful relations with its Asian neighbors with whom it is a member of the Association of Southeast Asian Nations (ASEAN)with China, Japan, Korea, the ASEAN Regional Forum, the ASEAN Defense Ministers Meeting, The East Asia Summit, and the Asia -Pacific Economic Cooperation. The Philippines chaired ASEAN from 2006 to 2007 (Global Security, “Philippines – Foreign Relations” n.p). It is a member of the U.N. and its specialized agencies (Global Security, “Philippines – Foreign Relations” n.p). Philippines served a two years term as a member of the security council and the acting head of UNSC in September 2005. The state has been a member of the Non-aligned Movement since 1992. The Philippines government seeks to be granted observer status in the Organization of the Islamic Conference (OFC). The country has played a significant role in ratifying the ASEAN charter and serving as the Country Coordinator of the U.S. Its relations with the Middle Eastern countries are pretty good since most of the Phillipian Nationals work there, and their welfare must be ensured.

On the contrary, Cyprus has a considerably lower GDP than Brazil and the Philippines. As a result, the country always regurgitates the policy and decisions of other countries with greater economic size than it. The Republic of Cyprus is established by sixty years. Over the years, its foreign policy has significantly evolved from introversion to extroversion (Christodoudoulides n.p). The Historical events of Cyprus have played a transformative role in its foreign policy. The two most critical events shaping the country are the 1974 Turkish invasion and the country’s accession to the European Union. The country’s membership in E.U. implies that the solution to Cyprus’s problems is linked to the E.U. laws, values, and principles. Recently, Cyprus embarked on a strategy of moving beyond a monothematic foreign policy to a diverse, polymathic one that would take advantage of the country’s unique characteristics to amplify its geostrategic role and promote the vision for the country that resonates beyond the boundaries of Eastern Mediterranean.

Effects of the Size of the Economy on Trade

The enormous economic size of Brazil makes its trade decisions a significant factor as it affects developed and developing nations. Brazil usually takes the side that aligns it with developing countries which often puts it in opposition with developed countries such as the U.S. (Hanson n.p). Brazil is opposed to establishing a trade relation with the Free Trade Agreement since it is afraid that it is bound to conflict with the foreign policy of the south imposed by its friends that are still developing. On the International stage, Brazil severed links with India during the Doha round of the world trade talks, as it pushed for low subsidies that were bound to make the goods from Brazil competitive in the global market. Brazil set the pace between the U.S., Europe, and India. The U.S. engages Brazil in investment and trade through several assets such as investing and expanding on its business and making Brazil the U.S. 8^th largest goods exporter, which amounted to $42.9billion  (Hanson n.p). The large size of the Brazilian economy grants it the flexibility of choosing the countries it wants to trade with.

Similarly, The massive economic size of the Philippines gives it the capacity to negotiate with powerful developed countries like the U.S. The relationship between the U.S. and the Philippines was defined in the 1990s when the U.S. accepted the Phillippine demands to leave military bases, including the one in the Subic bay (Global Security, “U.S.-Philippine Relations” n.p). The country toils to diversify its security interests from those of the U.S. To diversify, the Philippines has developed bilateral relationships with ASEAN and China to address the security in the country. The Philippines and the United States possess a 1999 pact that allows intelligence exchanges, arms sales, and military corporations. It grants the U.S. troops the ability to access the Philippine soil for military exercises targeted towards local humanitarian work and regional security. However, in 2020, the Foreign Affairs Secretary of the Philippines, Teodoro Locsin, declared that the state had officially terminated its agreement with the U.S. The reason for the termination was that the accords of the initial negotiation were about to be finished (Global Security, “U.S.-Philippine Relations” n.p). The talks over the negotiations began around the same time as a fishing dispute between China and the Philippines. As a result, the Philippine government wanted the agreement between the U.S. and itself to spell out that the U.S. would intervene in the dispute to aid the Philippines in defending the Islands where the Chinese vessels would likely appear. The Philippine government ascended from strategic ambiguity initiated in the initial contraction to strategic clarity through the suggestion. As a result, the U.S. conceded under conditions to pressure the Philippines into holding the perpetrators of political violence and extrajudicial killings accountable.

Cyrus’ trade decisions and economic choices are significantly affected by the actions and preferences of other countries with a more excellent economy, unlike Brazil and the Philippines. For many years, Cyprus established an economy that prospered by courting Russians as investors, oligarchs, and tourists (Stamouli n.p). Due to the actions of Russia that are considered war-mongering, Europe is severing relationships with Russia, which put the economy of Cyprus at stake since the disappearance of Russia due to severed links is bound to affect the country’s economy negatively. Annually, Russian tourists visit Cyprus granting the country over 100 euros billion in investments (Stamouli n.p). The Island has served as a banking home for Russian Investors who are arms dealers and those that run gambling firms. As an E.U. member, Cyprus is compelled by the regional bloc to untie its knots with Russia. Consequently, it has obliged by backing up the sanctions conjured by the bloc against Russia after it invaded Ukraine. Cyprus’s support of sanctions against Russia is bound to erode the economy of Cyprus. In the early days after Moscow had sent troops streaming to Ukraine, the E.U., the U.K, and the U.S blocked Russian Banks that were in the market and barred Russian airplanes from flying over its skies. Initially, Cyprus hesitated against banning major Russian Banks from the SWIFT international payment network but later accepted. Cyprus consented to close its airspace to Russian Planes and had put a caveat that it was bound to reconsider its decisions in the event Turkey was recalcitrant in following suit. The Russian ambassador told the Cyprus nation that they had shot themselves in the foot for closing its doors from Russia. The ties existing between Russia and Cyprus have existed from the point of the collapse of the Soviet Union (Stamouli n.p). As the years passed by, the strength of the ties intensified. The foreign affair between Russia and Cyprus and the consequences that Cyprus is bound to face after cutting its relations with the country shows how countries with small economies in the world are often affected when they cut ties with countries with a massive economies.

The essence of International Relationship Among Countries

Both Cyprus and the Philippines, regardless of their economy, require other countries to trade with them or enhance political unity. Due to its massive economy, the Philippines relishes a close and substantive bilateral relationship with the U.K. and China. Areas that are addressed by the two countries in unison are human rights, climate change, good governance, counter-terrorism, trade, investment, and peacekeeping (Global Security, “Philippines – Foreign Relations” n.p). China is essential to the Philippines since it is a source of development and a trading partner. There is an established community of the Chinese and the Phillipino in the country and an open field for Chinese interests to counter the U.S.’s influence. Under the modernization program, the Philippines has allied with Israel, Spain, the U.S., and Poland, where it acquires its military gear.

Similarly, Cyprus has been on a campaign to enhance its relations with countries in its immediate region, including the Gulf and the middle east. The country’s actions are put down by a vision of its area that is relevant for the E.U. and itself. At the point that powers shift in the region, there is bound to be an increased involvement of the E.U. in the Eastern Mediterranean. Cyprus has been actively involved with the E.U. above the issues that touch on the problems faced by Cyprus as a country (Christodoudoulides n.p). The government has worked methodically to construct its voice in Brussels over many issues, like drawing the E.U. to the perspective of the Eastern Mediterranean. Cyprus created a General Secretariat for the E.U. under the foreign affairs ministry, which is an essential step in establishing a more effective, stronger, and coherent voice in the E.U., which has always been dimed out due to the country’s economic size. The step will aid in addressing the challenges that the members of the E.U. have experienced and continue to partake in future. Cyprus intends to strengthen its relationship with the five permanent members of the U.N. security council and other Key players in the international Arena. Cyprus, Greece, Israel, Jordan, Egypt, and Lebanon have developed a trilateral cooperation mechanism. The development of energy drew the countries together in construing a legal framework for exploiting and exploring naturally occurring resources within the guidelines of International Law. The cooperation further proliferated in other areas like security, environment, education, innovation, and climate change (Christodoudoulides n.p).

Conclusion

The economic size of a country has a significant influence on its foreign affairs and policy. In the case of Brazil, its financial capacity is attributed to its being the host of international games, influencing the economic and governance policies adopted in Latin America. Additionally, its wealth makes it capable of affecting the economies of developed countries like the U.S. Cyprus has a relatively small economy compared to Brazil and the Philippines. Due to its small size, the country’s foreign policy is influenced by other countries. For instance, Cyprus is forced to cut off its relationship with Russia, even though the lucrativeness of its affair with the E.U. Philipines is a developed country that uses its massive economic size to get fair negotiations with powerful countries like the U.S. and China. Additionally, it can get out of negotiations it deems unsuitable for itself without getting boycotted as a minor economic country would. Therefore, the country’s economy’s size enhances its bargaining power in foreign affairs.

Works Cited

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Appendixes

Appendix 1

The GDP of Brazil (Trading Economics, “Brazil GDP”)

Appendix 2

The GDP of Cyprus (Trading Economics, “Cyprus GDP” n.p)

Appendix 3

An Image of Philipine infaltion rate (Business World n.p)