Case studies – development and globalisation

Case studies – development and globalisation

Case study – Guatemala’s cotton:

·         In the 1980s 75% of Guatemala’s cotton crop was exported

·         The money earned was used to buy pesticides, machines and equipment for the next year’s crop

·         However, if Guatemala had processed the raw cotton into finish clothes, and then exported these, the country would have earned far more

·         More significantly, only 1% of the land devoted to cotton would have been needed to produce the same income, and Guatemalans could have grown other crops enough food to feed themselves

·         Instead, trade arrangements made this difficult and Guatemala was tied to exporting raw cotton until competition from other suppliers and materials killed off its production altogether by 2005

·         Transnational companies now import cotton into Guatemala so that the workers in clothing factories can produce t-shirts for overseas markets

Case study – Ghana’s cocoa:

·         Before independence from Britain in 1957, Ghana was the world’s largest producer of cocoa

·         The British government used to dictate the price that Ghanaian farmers received for their cocoa crops

·         Even after independence 3 thing have pervented real change:

o   Commodity traders

§  Based in London and New York buy cocoa for large companies like nestle and Cadbury’s. To guarantee supplies and the best prices they now buy in the future markets. If Ghana’s prices are too high, traders buy from other countries, and that forces prices down

o   Overseas tariffs

§  Set by the EU are much higher for processed cocoa than for raw cocoa beans. Ghana would gain more income by turning raw beans into processed cocoa powder or chocolate and exporting those. But the EU tariffs force Ghana to export raw cocoa beans instead

o   The world trade organisation

§  Ghana joined the WTO in 1995, in an attempt to increase its global trade. Until then the Ghanaian government had subsidised its farmers to encourage them to stay on land and grow food for Ghana’s growing cities. But the WTO imposed the condition that when Ghana joined its farmers should no longer be subsidised. As a result, some farmers in Ghana can’t sell their own produce because imported subsidised food is cheaper, so some tomato and rice growers have given up altogether

Case study – Uganda

Unlike some parts of Africa, Uganda is a green and fertile country with plenty of resources of copper and cobalt. Uganda should be a wealthy country, so why does it struggle to provide a decent standard of living for its growing population?

·         By depending on low-value primary products such as coffee and tea Uganda earns little foreign money

·         It receives limited tax revenues from its exports

·         Idi Amin’s military regime of the 1970s expelled the wealthy Asian business community and exports collapsed

·         Huge loans were used to buy military weapons

·         Uganda’s debt burden increase…