Trade vs Aid Case studies

Poitive impact of Trade case study

East Aisan Miracle/ The Asian Tigers - Focused on exporting and Trade

- Countries including South Korea, Taiwan, Hong Kong and Singapore underwent industralisation in the 1960's - Prior tho the 1960's they had very low growth rates, similar to that of Subsaharan Africa Today

- The foundation for this growth was free trade and liberalisation of markets to allow trade to other countries

- Trade with the US and Japa with imports of Technology and new processes allowed rapid growth and the establishment of industries

 - They then could export products and run trade surpluses with other global economies

- Singapore is the most open country in the world

All countries have reached developed status and have high standards of living

  • achieved universal primary education
  • Reduced poverty rate by 50% in 20 years
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Negartive example of Trade - Senegal

Senegal and the Groundnut Trade - Country in West Africa

Groundnuts were Senegals biggest industry until independance in 1960's as their main export crop

Senegal lacked resources to futher their industry so took a loan from the world Bank to help with innovation of indsutry and called on Senegal to focus on exports to repay the loan

other markets began to grow ground nuts and to repay the debt the IMF implemented a policy of liberalisation - the market became flooded from increased trade. This meant cutting subsidies due to liberalisation

due to increased Trade, the price of nuts fell and

lacked money to subsidies indsutry and innovate the industry so went into economic decline

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Negative of Trade - Tarriff escalation of Coffee i

Manufactured products have higher tarriffs than primary products do.

This means primary producers get very little for the coffee beans they harvest - value added

The coffee industry tarriff escalation -

  • Farmer in Kenya recieves $1.49 for a 1lb of coffee beans
  • Roasters in Europe recieve $26 dollars
  • Retailers in Europe/USA recieve $200 +

This means inequality between the countries is futhering due to this unfair trade system

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Aid

Types of Aid

Bilateral - Government to Government (DFID)

Multilateral - Aid given by several governments to international organisations to assist programmes in poorer countries

NGO's - Distrute aid in a number of ways, can be programme, emergancy, project, short/long term development

Top down Aid - A body directs the operation from the top - large scale and effects many people, mostly likely to be beuracractic

Bottim up Aid - Grassroots, local schemes which are likely to be done by NGO's and work with local groups to empower and meet basic needs

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Positives of Aid

depends on the scale and type of aid in the situation -

- saves lifes in emergancy sitution

- can lead to trade - more workers mean more productivity

- multilateral aid can mean governments get reduced debt such as G8 gleneagles agenda  - this can lead to trade

- Can be sustainable

- include all pillars of development

Case study - Send a Cow in Zambia, HIPC scheme, Grameen Bank

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Negatives of Trade

- Doesnt reach those who need it most if it delivered in a top down way

- some countries lack the infastructue to faciliate aid such as roads and transport systems

- Aid dependancy  - Haiti after 2010 earthqauke

- unsustainable aid programme - apprioriate technology?

- Tied Aid - Conditions attacted e,g SAP to Zambia cases economic,socian and poltical choas

- corruption, IMF, world Bank PRSPS implementation

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Haitian Aid dependacy case study

Since the 2010 Haitain Earthquake and the natural hazards such as hurricanes it faces, Haiti has recieved hundreds of million dollars worth of aid and dozens metric tonnes of food aid including rice

in 2010 the government did call for an end to food aid

farmers have been negativly impacted by food aid as people are using the food aid rice at a subsdied price

Many people rely and wait on this aid - creating dependancy

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