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Aid, Trade, Fair Trade and debt relief
Trade
Fair Trade
Debt relief
Find out more


Trade

Trade is the exchange of goods, money and services between countries and regions.  The goods made in a region and sold to other places and known as Exports (they Exit the country nor region).  The goods bought into a place from other regions are known as Imports (they come Into the country or region).
If value of exports for a country or region is greater than it's Imports it will have a trade surplus and will make money.  If a region imports more than it sells then it will have a trade deficit.
Most MEDCs Import primary products which have low value and export high value manufactured goods an even higher value services.
Most LEDCs export lower value primary products (such as cocoa, cotton etc), this means that they struggle to raise standards of living in their countries because they do not have much foreign money coming in from trade.  The price of primary goods also varies widely and producers can lose out massively, so the trade in a sense is unfair.

Below is an image revealing where the money for a banana goes.  Do you think the producer gets a good deal?  How do you think the price of a banana should be distributed?

bananas.gif (5337 bytes)
Click on the banana to go to Oxfam's web site and find out more about fair trade....

Fair Trade

 
Fair Trade

This is a scheme designed to get a better deal for the producers of the primary products that MEDC countries need.  The producers get access to the market for their goods, a contract (for extra financial security, better prices for their products and access to the Fairtrade Premium, which is a sum of money available from the Fairtrade foundation to be spent upon improving yields, farming practices, health care or education. You can find out more about the fair trade foundation and its producers here.
Debt relief

Many LEDCs took out huge loans (for Millions of pounds) during the 1970s, offered to them by banks and governments in rich MEDCs.  The LEDCs wanted to use the money for various development projects such as building dams, roads, schools etc.  The loans had to be paid back, and the longer the loan went unpaid the larger it got, because the MEDCs added a sum of money called interest every month.  Over time these loans got so large because of interest that some LEDCs would never be able to pay them off.  It also meant that some MEDCs spent more on loan payments than on health care and education for the people living in their countries.  This has had a really damaging effect on the quality of life of people who live in these areas.  In the run up the new millennium a campaign was started to drop the debt, which has had some success in cancelling some debt, freezing the interest on some debt and in some cases giving the poorer LEDCs more time to pay back their debts.  This campaign was called Jubilee 2000.
A) Watch a fairtrade film or look at the fairtrade foundations photograph gallery

B) Fair trade is pushed as a fantastic idea. There are counter arguments to this.  Read these 2 web links,
10 major objections to fair trade and the BBCs Free Marketers attack Fair trade, does it change your ideas on Fair trade?

C)Play Milking It - it will help you understand world trade

Play the Debt-onator Game


D) Watch the You Tube clip on fair trade - what reasons does it give for buying fair trade?

E) Try the scatter game at the base of the page

 

     
 

 

Type of aid What it is Advantages Disadvantages
Medical assistance During emergencies rich nations and charities like the Red Cross or Medicin sans frontiers can provide medical assistance to the affected country.  This could take the form of qualified staff or medicines.    
People Richer nations or charities might choose to send qualified people top help in poorer nations.  In the sort term during emergencies qualified medical staff and trained pilots and the army can be of great assistance.  In the longer term teachers, engineers, consultants can all play a role in advising and train in people within a poorer nation, to help its long term development.    
Money Money is often sent to LEDCs, for investment in projects and the local people.  The UK sent £45million in aid to Tanzania to be spent on education.    
Large scale projects MEDCs can invest in large scale development projects, such as building roads, dams and factories.  The idea behind these projects is that they act as a growth point for development, allowing industry and farming to develop and raise massive profits.    
Intermediate technology This type of technology is designed to improve on current technology within LEDC countries and to be manageable for local people to use.  There is no point in sending machinery and technology into an area if the people can get no use of it because it is too complicated.    
Equipment Large scale equipment can also be provided in aid to LEDCs.  Equipment such as tractors, irrigation equipment and earth movers have all been provided in the past.