Trade versus Aid

Trade versus Aid

Look at the images and questions on the next slides – does Kenya need trade, aid or both?

Objectives for the week

• All will be able to explain how aid and trade are related to development and give at least one example of this happening in the real world.

• Most will apply their understanding to a range of contrasting case studies.

• Some will evaluate the roles of trade and aid as approaches in the efforts to raise living standards in the poorest countries in the world.

• STRIPE: Self manager

What is Kenya like?

• Kenya was a British colony - it gained independence in 1963 and is ruled by an elected government

• 38 million people live in Kenya, with almost 3 million living in the capital city of Nairobi

• Kenya is a diverse country, with many different cultures represented

• Kenya’ s economy has experienced ups and downs. In 2007, the Kenyan government unveiled Vision 2030, which is a very ambitious economic blueprint.

What impact has globalisation had in Kenya?

• This photograph shows a Kenyan market trader wearing a t-shirt and trousers

• Where do these clothes come from?

• What impact does this trade have on local people?

• Would you be disappointed if you visited Kenya and everyone was wearing the same clothes as you?

What impact has globalisation had in Kenya?

• This boy is making jewellery for a company called Bombolulu in Mombasa

• Bombolulu sell their products to a UK fair trade company called People Tree - see www.peopletree.co.uk

• The company employs workers who have suffered polio and are now disabled

What impact has globalisation had in Kenya?

• This photograph shows the Lunchbowl Project

• Children in the shanty town of Kibera are given a healthy lunch

• The Lunchbowl Network charity is based in London – see www.lunchbowl.org

• Would you give money to this charity?

What impact has globalisation had in Kenya?

• The equator runs through Kenya

• This sign has been erected as a tourist attraction

• The tourist industry in Kenya is the second largest source of foreign exchange revenue after agriculture

What impact has globalisation had in Kenya?

• Flower production is one of Kenya’s main growth industries

• These rose blooms will be flown to countries including the UK

• This farm is located away from the local lake to minimise ecological impact

• Is this trade sustainable?

What impact has globalisation had in Kenya?

• Kenya is famous for its tea estates

• This estate is owned by the James Finlay Company, which is working towards fair trade accreditation

• Other companies have been accused of exploiting workers

• Would you buy fair trade?

So does Kenya need trade, aid or a combination of both?

Trade vs. Aid in helping the poorer countries of the world to develop

• Since the 1940’s, there have been 2 main ways to promote development in the poorer countries of the world:

1. The use of trade to encourage economic growth

2. Developed countries (and now also oil rich countries) provide aid to the poorer countries

Both methods have their advantages and disadvantages.

What is trade?• Trade happens because of regional

economic differences. In order to balance production and consumption, raw materials, goods and services are moved from regions of supply to regions of demand.

• There is a strong relationship between the volume of trade and standard of living, and trade is an important factor of development.

Trade and development• It is difficult to achieve economic

development without economic growth. Growth increase in wealth improved living standards (and eventually higher HDI).

• In the 1940’s therefore, economists in MEDC’s believed poor countries needed to industrialise increase in manufactured goods for export, rather than relying on exporting raw materials (cheaper, unreliable market, agricultural products are volatile) increased economic growth and in turn, development.

How was this going to be achieved?

1. Poor countries should take on Western-style capitalism (potentially good for political situation too, as democracy is seen to be fairer)

2. The wealth that was generated would ‘trickle down’: money resources for industry more goods being produced more trade even more economic growth

3. Poor countries should promote neoliberal ideologies – the ideas of free trade, economic growth and efficiency, and open markets, that Thatcher and Reagan promoted in the 1980’s.

What was their big assumption??

• That the poorer countries in the South needed to develop in the same way that the richer countries of the North had done since the mid C19th, in order to achieve economic growth.

What is aid?• Aid is help or assistance given to improve

the quality of life of the receiver. It includes money (grants/loans), equipment, goods, staff and services (e.g. teachers, nurses), machinery, technology, etc, in order to build infrastructure, agriculture and industry.

• The aim is to help poorer countries develop their economies.

• However, giving aid is complex and controversial, and does not always benefit the recipient.

Types of aid1. Bilateral2. Multilateral3. Non-governmental

How aid is distributed1. Short-term2. Long-term development projects3. ‘Top-down’4. ‘Bottom-up’

Who gets the aid?Predict a list of Top 10 countries in the world who you think receive the most aid from overseas.

The focus of reasons why aid is given has changed over the years.

What trends and patterns can you spot from this graph?

Look at the information on trade and aid on pages 218-221 in your textbook– define the key terms:

• Trade –• Bilateral aid –• Multilateral aid –• Non-governmental organisations (NGOs) –• Short term aid –• Long term development projects – • Top-down aid – • Bottom up schemes -

‘Discuss the varying roles of (a) the promotion of trade and (b) the provision of aid, as approaches in the efforts to raise living standards in the poorest

countries of the world. (40 marks)’.

• Look at the advice on how to answer this question in your pack.

• Carry out research to be able to answer this question next lesson.

• The articles in your pack will help you – highlight the points that will be useful.

Reflection…

• Do you feel ready to attempt the question next lesson?

• What are your concerns?• Do you need to do any preparation at home to

enable you to answer the question next lesson?

Trade versus Aid

Look at the mark scheme for 40 mark questions in the front of your pack. What level are you targeting?

What do you need to do to achieve this?

Objectives for the week

• All will be able to explain how aid and trade are related to development and give at least one example of this happening in the real world.

• Most will apply their understanding to a range of contrasting case studies.

• Some will evaluate the roles of trade and aid as approaches in the efforts to raise living standards in the poorest countries in the world.

• STRIPE: Self manager

‘Discuss the varying roles of (a) the promotion of trade and (b) the provision of aid, as approaches in the efforts to raise living standards in the poorest

countries of the world. (40 marks)’.

• Spend the rest of the lesson answering this question individually.

• Homework: Finish answer to question by ____• Extension task: Have a go at marking your

answer using the mark grid at the front of this pack. What mark do you think you will get? Why?

Reflection…

• Are you pleased with your answer so far?• Why/why not?• Have we achieved our objectives for this

week?

Objectives for the week

• All will be able to explain how aid and trade are related to development and give at least one example of this happening in the real world.

• Most will apply their understanding to a range of contrasting case studies.

• Some will evaluate the roles of trade and aid as approaches in the efforts to raise living standards in the poorest countries in the world.

• STRIPE: Self manager