Tuesday, March 12, 2013

Is it better for a Devloping Country to Develop through Trade or Aid?

Developing through Trade will help the economy in many different ways, trade will increase the exports of a country which will in turn help create jobs and these jobs will generate income.  These incomes will have many benefits for people as it will raise their standards of living and will increase investment in further production creating more jobs and increasing productivity. As incomes increase this will also trickle down to the poor as more jobs become available to them. Ghana also has a weak currency the Cedi which is usually seen as a bad thing but in terms of exports this is good as it means that their exports seem less expensive compared to other countries and they are therefore more competitive on an international level.  Currently Ghana’s main exports are oil, gold, cocoa and it currently exports France 19.1%, US 8.6%, UK 4.7%. However Trade Blocs such as the EU put tariffs on imports, therefore making it difficult for countries like Ghana to become internationally competitive.  This is against the idea of free trade and is making it difficult for countries like Ghana to trade internationally.

 Aid can take many forms; it could be relief aid, one government giving money to another, an NGO giving money to those in poverty or training people in skills which will help them develop. It is often the case that developing nations don’t have the funds to build infrastructure and infrastructure is vital for a country to develop.

Overall I believe that the best way for a country to develop is through a combination of trade and aid.  Trade is vital for a country to develop many African countries have stumbled on the development ladder due to problems such as aids, civil war, corrupt governments which all hinder a countries development. Once a country has reached a certain level of development then I believe it is right to cut off aid as they can now cater for themselves and that aid can go elsewhere where it is needed.  Many African nations still rely heavily on Aid and they desperately need it.  


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