Global political leaders around the world struggle with the question whether they should initiate more trade or increase the amount of aid they give to least developed countries. A least developed country is typically defined as a country wih low incomes, than 800$ GDP per capita per year, also with weak human resources such as nutrition, health, education levels and literacy. The UN have recognised 50 countries that fall under the LDC category, 33 of which are in Africa (all sub Saharan Africa); including Uganda, Democratic Republic of the Congo and Haiti and the Sudan. Many LDCs suffer from ongoing and widespread conflict, such as Darfur in Sudan – along with extensive political corruption such as Haiti, which is frequently ranked as one of the most politically corrupted country in the world. With certain trade agreements put into place, such as the North American Free Trade Agreement has, not only increased the wealth of the United States considerably but also allowed for the standard of living within Mexico to slowly increase.
There are many problems within this country category, which needs to be heavily addressed. The problems, I believe, could potentially be categorized in order of importance – arguably the most important problem that needs to be sorted out within many of these countries is the corruption. Sierra Leone has been seen to be highly corrupted over the years, with 11 years of civil war and carnage – mainly due to the increase in natural resources that were discovered in large amounts within the country. This led to greedy individuals trying to take control and exploit the weak and poor residents of the country to find such resources, such as diamonds. In 2002, the largest UN fore in action today deployed 14,500 peacekeepers to try and aid the country into becoming peaceful and with the support of President Ahmed Tejan Kabbah, Sierra Leon can ‘wage a new war against corruption’, even though later on he was indirectly charged with corruption.
With this form of aid, it has helped the country develop even further from ranked the least developed country within 2000, to slowly becoming more developed. This end of corruption, which only came about due to the amount of aid from More Economically Developed country has led to other problems being solved. It has allowed the country to start generating legal ways of creating an income; and decreased the exploitation of child soldiers. The decrease in corruption has led to less people being murdered because of their ‘voice’ and also allowing people within the country more democratic ability. With the media painting the desperate picture of the country, it led to more people becoming aware of the countries situation – in terms of diamond and corruption. In this instance, aid was the most important form to raise the quality of life for the individuals of the country; stopping a large massacre and political instability within the corruption. This led to other problems being addressed, such as removal of malnutrition from the UN support; decrease in exploitation of the land; rebel forces trying to destroy the peace and less child soldiers being used.
However, this brings the debate whether if free or fair trade were to be created between Sierra Leon and other nations could it have led to an increase in quality of life – was it necessary for the UN to intervene with spending and peacekeepers. There are two main types of aid, free and fair trade aid. Fair trade is when the actually creators of the good, or for example the growers of coffee beans, will have more of a profit of the sale of the goods – rather than the large corporations exploiting their cheap labour. While free trade is a type of market conditioning, in which the government in terms of taxes and quotas does not cap the sale of goods. Fair trade is largely more beneficial for the poorer people of the country, as it provides a living wage for the actual producers of the goods.
While, free trade would allow the country to get onto the global market and also have specific support for transnational corporations – for example an increase of jobs. However, this could be argued that this in itself is aid and the TNCs are contributing to the support of the countries needs. On the other hand, there needs to be some limits on international companies re-locating their factories to LDCs or even LEDCs, as it could lead to further problems. The development may have removed many child soldiers around the world, but it could lead to children working in industrial factories creating shoes or clothing for MEDCs. This could be seen as an increase in quality of life from having the threat of dying in a civil war, however this is still not the best quality of life for children. Also, with free trade it would allow people to potentially immigrate to other countries where they could earn more for their family and send it home. This would increase the quality of life to the families living at home dramatically, from living of just one dollar a day to the minimum wage of an employee in an MEDC.
Some people believe that you can put large amount of aid into a country, or even create a neo-liberastic situation – however, the countries that are currently regarded as LDCs or even LEDCs will always be in that situation and it’ll never change. This is due to their geographical location, and how so many external factors are taken into consideration such as the climate, the droughts and the inability to grow many things within the climate. Biologist Jared Diamond in his book ‘guns germs and steal’ wrote heavily on this point, in this he effectively believed that the development of a country is completely reliant on their location rather than the people within it.
To an extent this is true, 33 out of the 50 countries are just below the Sahara desert in terrible conditions. They have little crops that are able to grow on their land, which used to be the first stage of development many years ago – the animals that graze are few in terms of species and overall are on a complete natural disadvantage. Arguably geography created the countries into what they are today. For example, the harsh conditions led to people unable to make many by selling their crops – this led to crime, as people needed more money to survive. This endless struggle continued and the crime, corruption and civil wars just became out of control.
Similarly, economists agree that these countries have too many problems to be able to compete on a global market, such as internal conflicts/ HIV and AIDs. These huge problems all contribute to the unrest of the countries in question. Many companies may disagree with moving their factories to Africa, not only would they have to adapt their designs to fit with the harsh environment. Also with 22.5 million adults and children who have HIV/ AIDs in sub Saharan Africa, would also contribute to the potentially weak workforce – making the productivity of those factories less. This is mainly why many economists believe there is no way that they will be competitive within the workforce.
In many developing countries around the world aid is directly given to the government and the public sector. With the increase in trade, it can directly add to the successfulness of exportesr within the private sector. Many governments have seemed to prefer aid, however it does not necessarily mean this is the best way of improving the quality of life for the people within it. Many LDCs struggle to receive a large amount tax from their people, and having a weak private sector reduces their chances even further in developing – which is why governments of LDCs prefer aid to support their infrastructure.
Tony Blair believed that we needed a $25 billion increase, doubling the annual aid, to countries within Africa by 2010 – and an even further $25 billion by 2015. However, this aid only improves the country in the short term – for example Japan’s recent natural disaster of an 8.9 earthquake on the Richter scale, may need for external aid which may be essential to get them back on their feat. But too much aid and it could lead to a dependency culture, in which countries are just merely reliant on aid without trying to achieve a goal for their country or to increase their countries quality of life. The argument comes into the idea that “if you give a man a fish, you feed him for a day. But if you give him a fishing rod, you feed him for a lifetime”; aid is simply just a means to get by it is not a good enough plan for the future. While trade can effectively set you up for the future, and hopefully increase the revenue of that country and thus increasing the quality of life. I believe that the most important provision is trade, however for the trade to be optimized there are many problems which need to be addressed – such as political stability. If a country does not rid itself of some of its problems, the trade that a LDC does will just go straight back into the corrupt leader.