Will trading fairly reduce world poverty?

Authors Avatar

Juned Talukdar         Humanities        

Question:  Will trading fairly reduce world poverty?

"Before you finish eating your breakfast this morning you've depended on half the world. This is the way our universe is structured… We aren't going to have peace on earth until we recognize this basic fact."
MARTIN LUTHER KING JR.
 (source: http://www.pantstopoverty.com/ballot.php)

The above quotation from Martin Luther King justifies how half of the world depends on the other. In other words the poor depend on the rich- to give jobs and pay them for their work and the rich depend on the poor - to make raw materials and products. However ‘pantstopoverty’ thinks that nearly forty years on from the quote to the right, you could justifiably replace "depended on" with "exploited". Is this something we can accept?

(Source: )

To answer this question I will carry out various tasks. Amongst them are comparing them to other options which can help reduce poverty e.g. Aid, free trade etc. Producing questionnaires, to collect data on Fairtrade and find the causes to world poverty and finding ways on how to tackle them etc.

This is why I think this question is very important

as I think trading fair will make a big impact to

 farmers/growers lives. I think this because

I have seen from personal experience that trading

 fairly would help producers a lot.

As my family background is Bangladeshi, I have

 realised that trading fair could make a big impact

in a farmer/growers life. One of my cousins is a

farmer and he grows crops and rice. He has a vast

 field for growing crop and rice. As you may think

 that growing a lot of these, you could get a considerable

amount of money. However due to unfair trading,

 they sell and get less than half of the money as

 other farmers and crop growers in the world. As they grow

crops and rice for a living, they depend on their job for money

for their family but due to unfair trade they are poor,

they are not able to feed their family sufficiently

and they have to rely on others to help them financially.         

This has shown in 2000 as the annual report on human

development showed that 1.2 billion people were living

 on less than $1 a day, which is approximately 50p. I feel

 that this question is very important as one of the main

causes of global inequality is unfair trade.

(Source: GCSE humanities for AQA, page 176) 

There are many forms of trade; another form of trade is international trade. International Trade can make a tragic impact to millions of producers forcing them into debt if the prices of goods fall. Products like coffee, tea and chocolate. Which we in the north, have come to depend on, are produced in the warmer climates of the south. The prices paid for these commodities have not risen in real terms over the last forty years, whilst the value of fertilizers, pesticides and machinery (imported from the rich countries) has increased substantially. The low price of coffee in the early nineties had a catastrophic effect on the lives of millions of small farmers, forcing many into crippling debt and countless others to lose their land. 

International trade has been growing for hundreds of years. Between 1970 and 2005 alone, the value of international trade increased more than ten folds and was worth over £11.5 billion every day in 2005. (Source; Fairtrade.org.uk)  

Many argue that trade is not fair. LEDCs lose out

 because MEDCs control world trade. They argue

 That almost all very large company are based in

MEDCs. Companies like Nike, MacDonald’s,

HSBC Bank and Nestle are where profits end up.

Most MEDCs rely heavily on exporting two or

 Three products that may account for 75 percent

 Or more of their trade. These products tend to

Be crops such as sugar, cocoa, coffee, tea and

 Raw materials such as timber and cotton.

Because of all this unfair trading, around

Three quarters (3/4) of the world’s population

Live in poverty. (Source: GCSE Humanities for AQA, Page 181)

In a BBC report, it stated that A UN report has found that the world is more unequal today than it was 10 years ago, despite considerable economic growth in many regions. Below, shows the income ratio in 2000. (Source: )

Per capita income ratio (PPP) around the world in the year 2000. Each colour represents the ratio of income in the country to the world mean. Countries coloured red have less than one quarter of the world mean income. Countries coloured dark blue have more than four times mean world income. The remaining colours indicate incomes between these extremes: dark pink (0.25-0.75), light pink (0.75-1.25) and light blue (1.25-4). Source: UC Atlas of Global Inequality.(Source: )

        

Throughout my essay I will be using some keywords.The meanings of some of the keywords I will be using in this essay are:

  • Trading: Buying and selling

       The activity of buying and selling, or sometimes bartering, goods.

  • Fairly: Honestly

       In a just and honest, proper, or legitimate way.

  • Reduce: Degrading

      Reduction or reducing is the process of lowering, degrading, or diminishing.

  • World:

      The World is a name for the planet Earth seen from a human point of view, as a place       inhabited by human beings.

  • Poverty:

Descriptions of material need, typically including the necessities of daily living. Descriptions of social relationships and need, including social exclusion, dependency, and the ability to participate in society. Describing a lack of sufficient income and wealth

(Source: Wikipedia; The free encyclopedia)

Obviously, the simple answer for countries to solve poverty is to provide for its own needs. This is done by countries trying to make money and meet the needs of its people by trading. Trade is something that is done between countries which could involve in an exchange of goods and services. It’s also the idea of buying and selling.

Every single country in the world has to do trade and it also helps millions of people around the world. The reason why it is necessary for countries to trade is because no country has everything and in order for them to fulfil that, they need to trade. Like America is the richest country in the world, however they lack the resources they need and in order for them to get it, they need to trade with another country in the world which has it and in return they can give something that the country they are trading with needs.

This proves that it is necessary for every country to trade. Trading also plays a big role in some people’s lives as they trade for a living and make money out of it.

There are many features of trade; amongst them are importing and exporting goods. Many countries in order to do trade need to import and export goods.

Import is when goods bought into one country from another country in a legitimate fashion, typically for use in trade. Import goods or services are provided to domestic consumers by foreign producers. Import of commercial quantities of goods normally requires involvement of the Customs authorities in both the country of import and the country of export. (Wikipedia)

Export is to send or transport (a commodity, for example) abroad, especially for trade or sale. (The Free Dictionary)

Export is also taking something out from ones country to another country; it is the counterpart to Import.

Other main features of trade are trade deficit and trade surplus. Trade Surplus is a positive balance of trade, i.e. exports exceed imports. (Investor Words)

 

Trade surplus is also a positive thing for the country because it’s more than expected; this can happen if the countries export rates are higher than the import rates and this also causes the country to stay out of debts.

Join now!

However trade deficit is the opposite of trade surplus and puts countries on a negative balance of trade. This can be caused because the country imports more goods than in it exports which means it makes less money and this also causes debts.

Below is a graphic I found when I searched for MEDCs and LEDCs on Google

        

 Trade surplus happens in the “north” (MEDCs) because they are ...

This is a preview of the whole essay