401395

Management Issues: Business Ethics

(Gruppe 01E)

The access of poor countries to the new markets

Gamze SABA

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Contents Fair Trade ...................................................................................................................................................... 3

Least Developed Countries .......................................................................................................................... 3

Third World Countries .................................................................................................................................. 5

Foreign Aid and Development ................................................................................................................. 6

The Problems of Third World Countries .................................................................................................. 6

Economy of Afghanistan .............................................................................................................................. 7

References .......................................................................................................................................... 10

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Fair Trade

Fair trade is a social movement which aims to help developing countries in order to make better

trading and to provide for them fair in trade. The movement defend the payment of higher price to

exporters as well as higher social and environmental standarts. Strategic aim of this idea is helping

strengthless producers and workers, so that they can fastinate profit and development, not

multinational companies. There are several recognized fair trade certifiers, including Fairtrade

International (formerly called FLO/Fairtrade Labelling Organizations International), IMO and Eco-Social

in order to show people the products that produced and traded fairly.

Fair trade contributes sustainable development by offering better trading conditions, protecting

human rights and environment.

The level of the economy in countries around the world is not equal. In some countries it is very

high and in some countries it is really low. GDP, unemployment rate, laborforce participation, total

trade, literacy rate, are several parameters in order to determine the level of country’s economy.

Least Developed Countries

Least Developed Countries (LCD) are the countries that are defined by United Nations according

to the indicatiors of socioeconomic development which shows the process of social and economic

development in a society. Why socioeconomic development important ? Because the changes in

socioeconomic situation causes technological changing, changes in law, changes in the physical

environment and ecological changes and all those are connected to each other and they affect the level

of economy in a county. Only ecomomic indicators are not enough to develop and to increase your

trade.

“the Economic and Social Council of the United Nations used the following three criteria for the

identification of the LDCs, as proposed by the Committee for Development Policy (CDP):

a low-income criterion, based on a three-year average estimate of the gross national income

(GNI) per capita (under $750 for inclusion, above $900 for graduation);

a human resource weakness criterion, involving a composite Human Assets Index (HAI) based on

indicators of: (a) nutrition; (b) health; (c) education; and (d) adult literacy; and

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an economic vulnerability criterion, involving a composite Economic Vulnerability Index (EVI)

based on indicators of: (a) the instability of agricultural production; (b) the instability of exports

of goods and services; (c) the economic importance of non-traditional activities (share of

manufacturing and modern services in GDP); (d) merchandise export concentration; and (e) the

handicap of economic smallness (as measured through the population in logarithm); and the

percentage of population displaced by natural disasters.” (United Nations, website)

1. Zimbabwe 22. Tanzania (United Republic of)

2. Congo (Democratic Republic of the) 23. Djibouti

3. Niger 24. Angola

4. Burundi 25. Haiti

5. Mozambique 26. Senegal

6. Guinea-Bissau 27. Uganda

7. Chad 28. Nigeria

8. Liberia 29. Lesotho

9. Burkina Faso 30. Comoros

10. Mali 31. Togo

11. Central African Republic 32. Nepal

12. Sierra Leone 33. Papua New Guinea

13. Ethiopia 34. Mauritania

14. Guinea 35. Madagascar

15. Afghanistan 36. Benin

16. Sudan 37. Yemen

17. Malawi 38. Myanmar

18. Rwanda 39. Cameroon

19. Gambia 40. Ghana

20. Zambia 41. Bangladesh

21. Côte d'lvoire 42. Kenya

The rankings above were published in the United Nation's 2010 Human Development Report and reflect

the countries with the lowest human development.

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Third World Countries

“The Third World” term came out first by French scientist Alfred Sauvy in 1952. Before French

revolution, it was used in order to distinguish the social classes such as: Clergy, nobles and peasants and

it defined the lowest social class “peasantry”. Then, during the Cold War, its meaning became a

definition of the countries that remain non-aligned with neither capitalism (membership to NATO) nor

communism (membership to Soviet Union) after the First and the Second World War. First World

Countries are the United States and its allies. Second World Countries are the Soviet Union, China, and

their allies. Third World countries as I defined before, neutral and non-aligned countries with them.

Till the end of imperialism, some of those countries were colonies of France, Germany, England,

Spain, etc. After the end of imperialism they came face to face with many challenges on their own for

the first time. They found a chance for the development, after some countries has already developed.

That is the reason why some people call them developing countries. Nowadays, the term Third World

became a stereotype for all undeveloped countries, because of most of the Third World being

excessively poor. It can be used to define poor and less developed countries of Africa, Asia and Latin

America, etc.

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Foreign Aid and Development

By the time Cold War, both First and Second World countries saw those countries as potential

allies. Therefore, they tried to pull them to their side by helping economically, supplying military support

. Cuba could be a good example for Soviet Union and Vietnam for The United States. After Cold War had

ended, they chose the side of one that kept helping them.

The Problems of Third World Countries

In my opinion, the people who live in a 3th World Country have so many problems such as,

poverty, hunger, lodging, health, war, freedom and so on. They are struggle to earn money for their

lifes.

The major problem of Third World Countries is over populace. They have a big population within

the borders to share all resources like water, medicineand to share money. Because of the low money,

citizens also struggle to keep healthy. They are facing so many problems because of too much

population and the people who aware of it, are migrating from their country to developed countries.

Due to over-population and relatively limited resources, China has a 'One child' rule where a couple can

only bear one child (H. A. Reitsma and J. M. Kleinpenning, 1985).

“Another problem in the recent times is Globalization that upholds that everyone must benefit

from modern transformation” (Phil Marfleet, 1998). The third world countries are dealing with all the

problems that i mentioned above. Therefore, they can not achieve development. They can’t benefit

from trade like MNCs. Some MNCs’ revenue is much more bigger than one of third world countries.

MNCs are also benefiting all the time more technology and minimizing their costs with low labor costs,

high technology, poor quality. It causes getting poors poorer and riches richer than ever.

My observation from all articles and news about poor countries, their general problem is that

they face a lack of money needed to set up new profitable businesses and industries. Also, the citizens

of poor countries are uneducated. Because they are suffering from lots of problems. Education is not

their priority. However, education is the most important thing for development. All those countries

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should focus on their strenghts such as mine, fruits and vegetables, human resources. They can increase

education in specific departments such as IT, Customer services.

Economy of Afghanistan

Afghanistan is a country which is in the list of United Nations called Least Developed Countries

and one of the third World country . It has one of the poorest economy in the world. All informations

that are shown below gave me the idea how the level of afghanistan economy low.

GDP (purchasing power parity):

$29.99 billion (2011 est.) country comparison to the world: 110

$27.36 billion (2010 est.)

$25.91 billion (2009 est.)

note: data are in 2011 US dollars

GDP - per capita (PPP):

$1,000 (2011 est.) country comparison to the world: 214

$900 (2010 est.)

$900 (2009 est.)

note: data are in 2011 US dollars

Unemployment rate:

35% (2008 est.) country comparison to the world: 182

40% (2005 est.)

Population below poverty line:

36% (FY08/09)

Exports:

$571 million (2010 est.) country comparison to the world: 166

$547 million (2009 est.)

Imports:

$5.3 billion (2008 est.) country comparison to the world: 123

$4.5 billion (2007)

Resource : Central Intelligence Agency

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Because of the war that lasted 25 years a go, Afghanistan economy could not develop enough. It

has a lack of foreign investment, too. Afghan economy is growing about %10. The backbone of country is

agricultural production and transportation system.Some of agrecultural products are grapes, several

fresh and dry fruits like, melons, apricots, and nuts as well. I found some books that shows Afghanistan

has a quite big amount of gold, lithium, iron ore, copper and other minerals.A delegation from

Afghanistan private sector met at 8 May with the new Assembler of Islamic Republic of Iran. Afghanistan

representatives ,who are trying to improve the relations between Iran and Afghanistan, emphasized that

there is a big potential to expand both countries businesses. They asked Iran to invest in priority sectors

like, oil purification, agriculture and mining (newsletter from ACCI). It is a step in order to fill the lack of

foreign invesment

In todays trade world, using the land of neighboring countries for transit of goods is a common

issue. Afghanistan is trying to increase its export by having some agreements with the countries around

it. For example, they had a problem with Pakistan. There is an agreement between Afghanistan and

Pakistan which is called ATTPA (Afghanistan-Pakistan Transit Trade Agreement). “The agreement

enables Kabul to export goods to India and in return, Pakistani trucks are allowed to reach Central Asia,

Iran and Turkey through travelling Afghanistan. “ ( Siddiqui, 2012).

Deputy Afghanistan Chamber of Commerce and Industries (ACCI) head, Khan Jan Alokozai said in

the past Afghanistan would export 80 percent of its fruits first to Pakistan and then India, but now most

of the fruits could not be delivered to India due to several problems facing Afghan traders in Pakistan.

They were unable to sell their products on time and because of this problem %55 of fruits were sold

with lower rates. Afghan traders are really unhappy with this. Also, one of trader Nijabat said "I don’t

want to export fruits this year to India through Pakistan, where the authorities created similar problems

for us last year." He also asked the government the solution of this problem because the fruit season is

abunt to start these days.

In order to solve this problem the agreement should be reorganized. Maybe, they can decrease

the lengthy of clearance procedures, so that people stop worrying about fruits and vegetables. Fruits

and vegetables could prevent from decomposition because of hitch in the processes. They both benefit

from this agreement and if they do not satisfy each other, it will be canceled or it is already not useful

and utility for them. Therefore, they should solve the problems by improving the agreement.

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In order to extend trade between Afghanistan and neighbours, some fairs should be organized

such th one organized in 26-28 March 2012. Chamber of Commerce and Industry of the Republic of

Tajikistan and Afghanistan Chamber of Commerce and Industry organized the exhibition which hosts 65

companies from 6 countries, Tajikistan, Kyrgyzstan, Belarus, China, India, Turkey. The number of afghan

companies was 37 which shows carpets, dried foods, spice, marble, IT and advertisement services. Trade

between Afghanistan and neighboring countries increased in the last ten years and this can duplicate it

every year by the help of this kind of events. To set better conditions for investment and trade, and to

promote visa facilitation for traders could be other improvements that are able to help improvement in

trade. The economic corporation will improve the relations between countries and this could be a key in

order to end terrorism in region.

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References

Tomlinson, B.R. (2003). "What was the Third World", Journal of Contemporary History http://en.wikipedia.org/wiki/Third_World#Foreign_Aid_and_Development http://www.nationsonline.org/oneworld/third_world_countries.htm http://www.nationsonline.org/oneworld/third_world.htm http://www.un.org/en/ http://ezinearticles.com/?Problems-of-the-Third-World-Countries&id=2450169 http://acci.org.af/component/content/article/122-acci-ask-to-solve-afghan-trades-problems.html http://www.bgs.ac.uk/AfghanMinerals/docs/Gold_A4.pdf#search='gold%20and%20copper%20discovered%20in%20afghanistan' http://pubs.usgs.gov/fs/2007/3063/fs2007-3063.pdf http://www.uvm.edu/ieds/node/568/