AIM: Discuss the different ways in which disparities can be

reduced with an emphasis on trade and market access, debt

relief, aid and remittances. Evaluate the effectiveness of strategies designed to reduce

disparities.

Free vs Fair Trade: case study Windward Island

1.List the reasons why the Windward Islands became involved inbanana production for export to the UK2.What were the disadvantages of banana production in the WindwardIslands?3.Despite farming difficulties, what were the outcomes of the bananatrade with the UK?4.What occurred to change trade in Caribbean bananas?5.What regions benefitted from this change?6. What were the advantages of banana production in these areas?7. What were the consequences of banana production in these areas?8.What were the consequences of Free Trade for the Windward

Islands?9.What has the introduction of Fair Trade done for the WindwardIslands banana producers?

Windward Island...an update Oct 2009Still a price war Want EU help – storms, pest costsThis year: 50% red in exporting farmers (Dom), 30% St VincentWest African plantations also

http://www.guardian.co.uk/environment/2009/oct/11/banana-price-war-supermarkets

AID and Fair Trade with OXFAM

TradeCase study 2

OECD conference

2008

TradeCase study 1

OECD conference 2008

SAP

•Privatisation of state enterprises to try and attract FDI•Remove tariffs and barriers to allow FDI and imports (less protection for home industries)•Reduction in government spending

CASE STUDY: UGANDA

Read the article and decide if Uganda’s SAP has been beneficial

DEBT

Why?

Aid: HIPCPost-Completion-Point Countries

Benin Guyana NigerBolivia Haiti Rwanda

Burkina Faso Honduras São Tomé & Príncipe

Burundi Madagascar SenegalCameroon Malawi Sierra Leone

Central African Republic

Mali Tanzania

Ethiopia Mauritania UgandaThe Gambia Mozambique Zambia

Ghana NicaraguaInterim Countries

Afghanistan Democratic Republic of the

Congo

Guinea Bissau

Chad Côte d'Ivoire LiberiaRepublic of

CongoGuinea Togo

Pre-Decision-Point Countries Comoros Kyrgyz Republic Sudan

Eritrea Somalia

Different types of aid

BILATERALAid given from one country to another in the

form of money, goods or services

MULTILATERAL Aid given from

several countries through large organisations

such as the World Bank

TIED AID (Conditions! )E.G. the recipient country may have to agree tospend the money in particular ways or can only spend the money on goods from the country giving the money

SO WHAT’S THE PROBLEM?

BAND AID 1984

Remittances ‘a payment of money sent to a person in another place’ (Princeton)

Latin America & Caribbean

2008 - $69bn, 2009 - $64bn Why?

Effect1m households will not receive money in 2009, 4m will receive 10% less

2009 2010

Germany -2.5 0.1

France -1.9 0.7

Italy -2.1 -0.1

Spain -1.7 -0.1

Japan -2.6 0.6

UK -2.8 0.2

Canada -1.2 1.6

USA -1.6 1.6

IMF

65% of LA migrants in USA (75% of all remt)

Trade

AUSTRALIA AUSTRIABELGIUM CANADACZECH REPUBLIC DENMARKFINLAND FRANCEGERMANY GREECEHUNGARY ICELANDIRELAND ITALYJAPAN SOUTH KOREA LUXEMBOURG MEXICONETHERLANDS NEW ZEALAND NORWAY POLANDPORTUGAL SLOVAK REPUBLIC SPAIN SWEDEN SWITZERLAND TURKEYUK UNITED STATES

OECDWTO (replaced GATT)

EU

BILATERAL

GATSJan 1995Framework within which firms and individuals can operate. 2 parts: a) general rules & disciplines b) national “schedules” - countries’ specific commitments on access to their domestic markets by foreign suppliers. E.g. a country making a commitment to allow foreign banks to operate in its territory may limit the number of banking licenses to be granted (a market access limitation). It might also fix a limit on the number of branches a foreign bank may open (a national treatment limitation).Predictability!

‘The liberalization of trade in goods, which has been promoted through negotiations in the GATT over the past 50 years, has been one of the greatest contributors to economic growth and the relief of poverty in mankind's history.’ (World Trade Organization)

SRI LANKA - telecommunications‘

Millions of US

DollarsShare

(percent) Population PerCapita (Dollars), 2008

Baja California Norte $342 1.4% 5,595,760 $61Sonora $318 1.3 2,473,678 $129Chihuahua $475 1.9 1,661,813 $286Coahuila $300 1.2% 2,648,330 $113Nuevo Leon $331 1.3% 1,267,087 $261Tamaulipas $512 2.0% 6,960,799 $74Total Border States $2,278 9.1% 20,607,467 $154Rest of the States $22,867 90.9% 65,467,584 $349National $25,145 100% 106,682,518 $235.70

NATIONAL TREATMENT - Forbids governments from favouring domestic firms over foreign-based companies. MARKET ACCESS - Guarantees irreversible/unrestricted access to the markets of other member countries. DOMESTIC REGULATION - Members must illustrate that there are no unnecessary barriers to trade in services which discourages governments from passing and enforcing env, labour & health reg. EXPANSION RULE - Member countries commit to successive negotiations to expand the agreement and increase the number and type of services that will be included. Create further problems. SECURITY EXEMPTION - Governments are exempted from WTO rules governing trade in goods and materials it considers necessary to protect ‘essential security interests’. This permits subsidies to the aerospace and military industries & encourages traffic in arms.PENALTY RULE - Countries can’t change their commitments within the first three years and changes made after three years require countries to negotiate ‘compensatory adjustments’. This means a country will have to agree to compensate all other member countries.

CAP - The Common Agricultural Policy (1962)

After World War II Europe wanted to be agriculturally self-sufficient and protect its farmers. 2 ways :

1Farmers are paid for their produce at an agreed price even when the marketprice falls. Therefore the EU buys in supplies of the food commoditiesproduced in its member states when they are in oversupply. When supplycannot meet demand the stocks are sold onto the market.

2.Tariffs are applied to specified goods imported into the EU. These are set at a level to raise the World market price up to the EU target price. The target priceis chosen as the max desirable price for those goods within the EU. Quotas arealso used as a means of restricting the amount of food being imported into theEU.

BARRIERS TO TRADE – SUBSIDIES AND TARIFFS

Achievements Problems

More was produced since farmers could buy more fertiliser/machines

Destruction of hedges destroys wildlife/soil erosion

Farmers/rural community kept alive

High cost of subsidies

High income for farmers LEDCs find it difficult to import food into EU / Undercut

Surplus one year can offset a crop failure the next

Creation of food mountains and lakes

THINGS HAD TO CHANGE!

SET-ASIDEFarmers with over 20 hectares of land must now leave 10-15 % uncultivated and they receive a grant.

GRANTSPayments can be made to farmers to improve their land, to use new techniques or because they farm in a difficult place. UK has most of the largest farms in the EU. Some are areas are difficult to farm and are officially known as Less Favoured Areas. In LFA further payments were given based on the number of animals kept, to ensure people could continue to farm in those regions.

QUOTAS

More milk and dairy products are produced than consumed. Farmers are told how much milk they can produce and this was introduced in 1984. If farmers produce more than their quota they are fined. 2004 – farmers were paid 78p per litre for milk produced. Quotas and set-aside was introduced to reduce these mountains.

45 per cent of the EU budget is spent on CAP. Prince of Wales = approx $1,300,000 last year, the Queen approx $1,000,000 . One person received $3.5m for one farm. Cancelling debt and giving aid is less than the amount given to EU farmers. said rich countries supported their farmers to the tune of pounds £154 bn a year "10 times the amount given in aid to Africa. Not just the EU – US farmers are subsidised heavily. EU also pays export subsidies to EU farmers - excess is ‘dumped’ on world markets. EU exports to milk to Brazil, sugar to South Africa for example. Agriculture in the EU = 3% of GDP, but its 90% of Africa’s. Meanwhile corn (e.g. Malawi) is kept out of the EU.

Current situation with cereal• Falling stocks• World surplus of 18% this year (30% in mid-

2000s)• Wheat prices are high• Production is up thoughHow are governments responding?North Africa: Morocco cut import tariffs, may subsidies

importersEgypt signed a deal with KazakhstanBenin, Senegal got rid of tariffsEthiopia has banned exportsPakistan banned wheat export to AfghanistanMalaysia going to increase production

Solutions in Kibera• One of the largest in the world is Kibera, with an estimated population of over one million.• Kenya’s Ministry of Housing, in partnership with UN-Habitat, has embarked on an upgrading

project — the development of apartments, with financial instruments provided for residents of Kibera to access loans for purchase of their properties.

• The project is in its early stages, but if successful, it could be used as a blueprint for future urban upgrading projects.

• Building upwards means better utilisation of space and the provision of legal ownership documents ensures housing security for the urban poor.

• A unique approach is that each unit has an extra room that can be leased to ensure there is income to cover monthly repayments.

• A change of approach in land tenure and land management is vital for Africa. While it is the least urbanised continent, by 2030, it is estimated that Africa’s urban population will exceed the total population of Europe.

• While most developed nations have land records that cover most of their territory, only a small number of developing countries have land records covering 30 per cent of their territory.

• Corruption is a big factor. The lack of equity and integrity in land allocations and ownership has also been a driving force for conflicts on the continent.

• Without a doubt, just and sound land policies are required for peace-building.