Welcome to coolgeography.co.uk
Back to main Back to GCSE Development

Attempts to reduce imbalances in world trade & poverty

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 Fair Trade Premium, which is a sum of money available from the Fair Trade 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. 
Fair Trade is an international movement and its influence is growing, more than 4,500 products now bear the fair trade mark, and 72% of the UK population recognise the Fair Trade logo.  In addition, more than 7 million people in Africa, Asia and Latin America benefit from Fair Trade - farmers, farm workers, and their families.

 Debt and its issues

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 idea was to help countries to develop by improving their industries and infrastructure.  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. Countries can borrow money from many sources, including other countries, banks and international organisations such as the International Monetary Fund (IMF) and World Bank.  If a project succeeds debts are easily repaid and there is no issue.  However, if a project fails debts can build up because of the interest and countries can get into huge financial trouble.  This issue can massively affect the development of a country, which directly affects the standard of living of the people who live there.

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. As a result of this campaign the UK government cancelled much but not all of the debts owed to it by poorer nations.  Banks have not cancelled debts however, and many countries the world over suffer the effects of debt.

CONSERVATION SWAPS

This is another way for poorer countries to make money and get themselves out of debt.  Many poorer countries have abundant natural resources and these can be used or exploited in many ways.  The rain forests are a good example; these are exploited in an unsustainable manner for wood, agriculture and mineral wealth.  Conservation swaps offer an alternative to poorer countries to reckless exploitation of their natural wealth.  These swaps basically see poorer countries have portions of their debts wiped out or paid for by richer nations or charities of richer nations in exchange for promising to protect or CONSERVE large parts of their natural environment.  This has large scale global effects, by protecting the atmosphere and the hydrosphere.  In 1984 the World Wildlife Fund came up with the idea of conservation swaps and in 1987 the first was launched in partnership between the Government of Bolivia and Conservation International (CI) for US$ 650000 which protected 3 natural areas. Many countries have since followed, including the Philippines, Sudan, Zambia, Ecuador and Uganda.

The area above in Guatemala has been protected by a conservation swap - find out how here.

 

   
     
Think about it
Creative Commons License
Coolgeography.co.uk by Rob Gamesby is licensed under a
Creative Commons Attribution-NonCommercial 3.0 Unported License.