Geography 3.2
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- Problems in International "Free" Trade
- -Uneven resource distribution-Increased dependency on other countries -Markets in MDC are already saturated with goods. -Only the company benefits, not all of society. -"the rules of the game" are set by MDC
- Early adopters os International Trade
- -Four Dragons -Arabian Peninsula -India (4% --> 7%) Fueled by foreign direct investments of TNCs (transnational corporations)
- How to finance development
- -Development loans -World Bank -International Monetary Fund (IMF) -Framework established under Bretton Woods Agreement of 1944.
- Structural Adjustment Programs
- -Raising taxes -Reducing government spending -CHarging citizens more for services -Controlling inflation -Selling publicly owned utilities to private coporations -WTO
- Self-Sufficiency
- -Grow domestic industries by protecting them from imported goods using trade barriers (tariffs, quotas, and licensing importers).
- Characteristics of Self-sufficiency
- -Modest GDP growth but benefits of development are shared though out the country. -Products are for domestic consumption and not exportation -High border protection -small businesses -reduced poverty
- Fair trade
- -Products are made under conditions that protect the workers and small businesses of LDCs.
- Characteristics of fair trade
- -Pay proper wages -Safe working conditions -No child labor -Environmentally friendly -Keep profits within the country -producer groups are formed into co-ops/lending circles. -they own their own land -they discuss their policies democratically -only works if consumers see a value in it (label system).
- Goals of Fair Trade
- -Eliminate middle management which allows for competition in the market due to better prices for consumers. -Slash buracracies. -WOrk against "plantation" models.
- "Plantation" System
- -industrial, company owned farming. -focused on export -workers have no democratic voice. -profits leave the country. -economic polarity.
- The Case of the Bananas in St. Vincent
- -was formerally a colony under UK thus they had preferential trading with them. -The WTO ended this after being prompted by the USA. -80% stopped farming--> only fair trade farmers could continue.
- Criticsm of WTO
- -are they supporting the interests of the developing countries of the more powerful countries? -Do they take away national sovereignty? -Are they puttting workers first?
- What can fair trade farmers do with their "pot" money
- Develop institutions (health, school)
- Negative effect of globalization
- Supernational organizations take away power/sovereingty from indipendent nations.
- Johad
- rain storage tank in India
- Cochambamba, Bolivia
- -Forced to privitize water -People couldn't afford it -Riots and economic paralysis
- World Bank
- International financing institution that provides loans to poorer countries.
- Privatization
- the transfer from public or government control or ownership to private enterprise