• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The use of trade is the most important tool to achieve economic growth in LEDCs. To what extent do you agree with this statement?

Extracts from this document...

Introduction

'The use of trade is the most important tool to achieve economic growth in LEDCs.' To what extent do you agree with this statement? (40) With approximately half the world living on less than $2.50 per day and 1.7billion people living in absolute poverty, development in order to improve living conditions and provide people with at least the basic necessities is a top international priority. There are 3 widely accepted methods of achieving economic growth: Reducing/Canceling debt, Improving trade and International Aid. All of them are important tools, but the potential profits and self-dependency of trade makes it the most favourable tool. LEDCs are almost solely dependent on primary industry, in particular exporting grown produce though agriculture. Trading raw materials is the first step on the ladder for countries to develop, so as a result it is the most important tool to achieve economic growth. Promoting trade in LEDCs brings many benefits. Ultimately trading brings in revenue, which enables infrastructure to be built/improved, enabling even more production and thus more trade, which leads to more imports and exports. Promoting trading helps to make an LEDC more self-sufficient, and not reliant upon international help. This is a long-term solution to the development issues currently plaguing many countries, as it helps puts the infrastructure in place to allow a similar period of industrialisation like in Britain at the end of the 19th century. ...read more.

Middle

It focuses on exports of coffee, cocoa, sugar, tea, bananas, chocolate, flowers and cotton. In June 2008, Fairtrade Labelling Organizations International estimated that over 7.5 million producers and their families were benefiting from fair trade funded infrastructure. In order for any trade to be significant in achieving economic growth, it is important that the farmers are receiving a fair price for their produce, which is turns enables them to improve their productions techniques, increasing trade. Trade relies on the country already having a certain degree of infrastructure in place in order to produce goods to be traded. In some cases the country doesn't have the provisions in place for this to be possible, in which case then Aid is necessary. Aid is less significant in achieving economic growth than trade because it only provides the means for growth, trade is what actually causes the profits which defines economic growth. There are three main types of Aid: Bilateral (government to government), Multilateral aid (government to international organisations such as WHO and UNESCO) and Non-governmental organisations (NGOs, charities such as Oxfam). Bilateral aid is often criticised heavily as it is 'top-down' and tied aid, and as a result it isn't that important as a tool to achieve economic growth. A good example of tied aid is a dam built in Malaysia in the 1990s which was funded by international aid, most notably Britain. ...read more.

Conclusion

The debt which plagues many developing countries severely restricts their economic growth. Many, if not all, LEDC countries have huge loans, which the governments can't even afford the pay the interest on. Approximately one third of all aid is used to repay interest on loans. As a result of huge debts, organisations such as the IMF and World Bank force countries to restructure their spending so they can afford the payments. This has disastrous effects on the economies of LEDCs as they can't then afford to spend money to put the necessary infrastructure in place to achieve economic growth. Similarly to aid, canceling debt for developing countries would give countries the means to improve their economies, albeit through other means such as trading goods. In the majority of LEDCs there is no easy answer to achieve economic growth. Many countries do not have the necessary infrastructure and skilled workforce necessary, thus aid is very important to 'get the ball rolling'. However, aid can only help so much and the country has to be able to be self sufficient and support themselves without external assistance. By advocating fair and free trade in developed countries and promoting international trade in LEDCs, they can enjoy economic growth. Therefore, the use of trade is the most important tool in achieving economic growth in LEDCs. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Global Interdependence & Economic Transition section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Global Interdependence & Economic Transition essays

  1. Marked by a teacher

    Natural disasters and a lack of resources are the main causes of global poverty. ...

    4 star(s)

    From it stems a wide array of problems such as war, a lack of democracy and corruption, all of which leave a country very poor. Political factors are by far the most significant cause of poverty as they cause/reach nearly all socio-economic factors.

  2. Can developing countries ever catch up with developed countries

    This process is reinforcing underdevelopment and global inequalities, especially given that trade unions and minimum wage policies still operate in most northern societies. Again, the pattern is less one of catch-up than of an increasing gap occurring in the context of an integrated global system.

  1. Free essay

    Discuss the varying roles of the promotion of trade and the provision of aid, ...

    This is due to their geographical location, and how so many external factors are taken into consideration such as the climate, the droughts and the inability to grow many things within the climate. Biologist Jared Diamond in his book 'guns germs and steal' wrote heavily on this point, in this

  2. Tourism in LEDC's creates environmental and social problems whilst bringing limited economic benefits. How ...

    Other islands such as Tonga and Fiji are suffering in the same way. The undermining of culture can lead to alienation, drunkenness, burglary and violent crime among natives. Bangkok and Pattaya in Thailand have become centres of the sex industry.

  1. To what extent is an unfair world trade system the root cause of the ...

    or not there is corruption and exploitation taking place in world trade and how much of a hold it has on the World Trading System. Section 1: This development can come at a price however, socially, economically and environmentally. Environmentally, resources of a country can be abused, including the amenities

  2. Examine the causes and consequences of the rise in manufacturing in NICs

    This has caused rural-urban migration at alarming rates especially to the capital Seoul and Pusan, and naturally deep port in the south. As a result urbanisation had occurred, increasing the percentage of South Korea that is classified as urban; since the 1960s the figure has jumped from 28%-75%.

  1. Newly industrialised countries have been, and continue to be, the driving force of globalisation. ...

    This can happen if companies from Western countries (like Coca-Cola) see the potential for economic growth through advertising to a new market, and thus run TV/radio/magazine adverts for their product. This may result in emphasis of the ?Western? culture through the performance of the actors in the advert.

  2. To what extent do Non-Governmental Organisations (NGOs) meet the development needs of African countries ...

    This means that despite helping the country this said country could potentially completely rely on aid and if another disaster hits then the country wouldn?t know how to deal with it own its own. In conclusion, even though aid itself cannot entirely solve the problems some African face, certain programmes

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work