The reason for choosing the topic ”Trade and Development” was to show the connection between the two concepts. Assuming this, it could be shown that the state of development in the different regions around the world could be accounted for by the conditions under which they trade.

Development and its requirements

When I use the word development, I am referring to human development. It is possible to find a number of definitions for this concept, I, however, would like to use the one that has been adopted by the United Nations Development Programme (UNDP). The UNDP defines the concept of human development as “…. creating an environment in which people can develop their full potential and lead productive, creative lives in accord with their needs and interests.” It carries on to say that development is “…. expanding the choices people have to lead lives that they value”, and that “Fundamental to enlarging these choices is building human capabilities”, the most basic of which is “…. to lead long healthy lives, to be knowledgeable, to have access to the resources needed for a decent standard of living and to be able to participate in the life of the community.”

One could say, following on from this that human development is, broadly speaking, dependent on people being able to

i) meet the needs and wants of life, such as having adequate nutrition, access to clean water, adequate shelter as well as adequate health care, all of which have an effect as to whether or not they would lead long and healthy lives, as well as whether or not they would have decent standards of living,

ii) have access to information, which is the base of being knowledgeable and

iii) live in an environment where they are allowed to express themselves freely, as well as have their opinions heard in the formulation of policies that would affect their lives, which would mean that they are participating in the life of the community.

There are two requirements in order to fulfill these conditions. These are creating a man-made system that would allow for the participation in the life of the community, and access to the resources that are required to fulfill conditions i) and ii)

Trade

It is easy to show that not every place has all the resources that are needed by the population that live locally. A good example of this would be water for those who live in deserts. This inadequacy of most local environments to provide all the required resources, for its human inhabitants creates a need to look for the resources that are not locally available. However, the acquiring of non-local resources, in the event that they are not stolen or pillaged, requires an exchange.

This idea of an exchange of resources that is carried out such that both parties end up with items that prior to the exchange they did not have is what I would define as trade.

Resource usage distribution

The use of resources, when you look at it from a regional point of view, shows an imbalance. According to the UNDP’s human development report of 1998 entitled “Consumption for Human Development” “Globally, the 20% of the world’s people in the highest income countries account for 86% of total private consumption expenditures.” Putting this another way is to say that the people who live in parts of Europe, and the regions that Europe colonized, such as North America, New Zealand, and Australia, as well as those in Japan, use 86% of the resources that the earth produces.

There are two possible reasons, in my opinion, why the situation of 20% of the human population using 86% of the earth’s resources could occur. These are that 86% of the resources are available locally or if that is not the case, then the resources, or at least a part of them, are taken from where the remaining 80% of the population live. When one looks at the situation in the world today, with the movement of resources from one region to another, it is again easy to show that the former is true.

The modern-day imbalance is one whose roots could be probably traced back to the 15^th century. In 1493 the then-pope of the Roman Catholic Church, Pope Alexander VI issued a number of charters known as the papal bulls. What the bulls did was to give all of America to Spain and all of black Africa to Portugal, without the consent of either the Americans or the black Africans. At that time, it was estimated that the population of America was about fifteen times that of Spain, and that of black Africa was about one hundred times that of Portugal.

What followed, naturally was the colonization of those lands by Spain and Portugal. What this meant in essence was that the land and its produce were under the control of the colonizers, regardless of the opinions of those who actually owned the land. As such the colonizers could determine what area was to be used for cultivating food, what areas would be used to mine for minerals, and so on, all without consultation with the local population, who also had no benefit from the produce of the land. This trend of Europe colonizing other parts continued with the colonization of the rest of the world, by which time the European countries counted amongst their numbers countries like Great Britain, France, Belgium, Holland, and Germany

As this colonization took place without the consent of the colonized, there was natural resistance from the colonized, who wanted the use and control of their land. When resistance from the colonized occurred, it was met with severe violence, including massacres. The most vivid example is the genocide of the indigenous North American Indian population. The proportion was such that an estimated 90% of them were killed by the European invaders.

Trade, the modern colonizer

The brutalization and massacres did not however deter the local population, who wanted to have some control of their resources. The ensuing struggle led to, starting with India in the late 1940s a situation where the former colonies became independent. For the Europeans, who had for centuries gotten used to using the resources from other lands, and as one can imagine, wanted to continue to do so, this new political system created a challenge. The challenge was how to continue the condition of resource control and usage in the new political system created by the independence of the colonies.

To control the consumption of resources would, in my opinion, depend on two key factors. These are what is produced to determine the balance of production and who produces them, to control who gets to use what is produced.

To understand what I mean by the balance of production, I will use an example. If there is a piece of land, whose soil is fertile, and which underneath it has some crude oil, that piece of land could then possibly be used to produce two things. These are either food or oil. What is produced from the land would in that case be dependent on what the person or people who have or have control over the land want. If the person or people who control the land already have enough food and not enough crude oil, then their choice would be to use the land for the production of crude oil. This is what I mean by the balance of production. I should add here that this example is relevant where the person who owns a piece of land also has claims to what lies underneath it

As to who gets to use what is produced, this is dependent on the producer, as the producer, if given the freedom, could determine whom they allow getting the produce.

As such, if the Europeans wanted to continue to control the use of resources, they would have to control what is produced, and who produces them in their previous colonies.

Dependence on money

As the previous colonies were supposed to be independent, to determine who produces and what gets produced would require some exchange, or trade, which was not necessary when these regions were colonies. As such what would have to be exchanged for, on the part of the now independent colonies, would be something that these new countries do not have. This is the part that money plays.

For a few thousand years, to ease the disputes that might arise from the value placed on resources, the concept of money has been used. This meant that resources could be measured against a common substance, which could then be exchanged for getting those resources.

When money becomes the means of exchange, there is a value put on it, in that without it one does not have any power to carry out an exchange. The use of the terms financially rich and financially poor already indicates that there is a bias as to which regions have this commodity of exchange. As such the power to be able to dictate the terms of the trade already lie with the group that has the money when they deal with those without.

For the financially poor regions to get this means of exchange, would then mean that they would have to go to where it is, which are the regions that are financially rich. Since what they have to carry out the exchange are their resources, the trade that takes place is one where money is exchanged for resources. As such what they end up with is money, which though is a potential for getting resources does not necessarily mean getting resources.

International monetary system

Not only do the financially poor countries have to go with their resources to the financially rich countries for money, but these financially rich countries also dictate who gets to produce and what is produced in those regions through the monetary system. How this works through the organizations that lend money to countries, namely the International Monetary Fund and the World Bank.

In summary what these organizations do, when financially poor countries go to them to ask for money is to give conditions. These conditions, which come under a number of names such as the “Structural Adjustment Programmes”, offer two directives.

The first is that the countries open themselves up to the outside world, which they sometimes refer to as liberalization. What this does is open the country to foreign investors as well as the pressure to privatize the means of production. The opening up of the country allows foreign companies to be able to flood the country with goods, which are normally cheaper than those produced locally, hence eliminating the local producers. The privatization, allows for the buying off of the services that are offered to the local population as well as the land, and the mining processes associated with it.

The second directive is for the countries to increase the rate that they set to pay back local loans – the local interest rates. What this does is ensure that the local producers find it difficult to keep producing. This is because if the local producers have bank loans, an increase in the local interest rates, would mean that the amount of money that they have to use to pay off their loans increases.

These two conditions cause discrimination that determines who gets to produce and what gets produced in those countries that go to these institutions, thus fulfilling the aims of resource usage control.

It is worthy of note that in the sixty-one years that both the IMF and the World Bank have been alive, there is yet to be a single success story from the countries that have heeded to these advices, in terms of the use of resources by the local population, which as defined earlier is a part of becoming developed. In all that time the situation has been the same for the richer countries using almost all the resources.

There is currently a financial crisis that affects most of the world. It is interesting to note that the policies that have been adopted to counter this crisis, by the financially rich countries, have been the exact opposite of what the IMF and World Bank have been giving to the financially poor countries. These are a reduction in the interest rates, which currently in the United States of America is down to zero, and protectionism, or closing of its markets to the outside world. An example of this protectionism is to be seen in one of the conditions that have been stipulated by the American government, as they intend to give out 800 billion US dollars to save their economy. The condition is that those who use the money “buy American”.

Trade Organisations

At about the same time that the IMF and the World Bank created an agreement on Trade and Tariffs, the General Agreement on Trade and Tariffs (GATT) was also created. The World Trade Organisation, WTO, replaced this in 1994. The stated aim of the WTO is to “promote free trade and economic growth”.

The WTO’s record shows that it has seen the financially rich getting richer and the financially poor poorer. This is in addition to the fact that the financially poor countries constantly complain about the way the body makes its decision, which they say is not transparent to them, a complaint not echoed by the financially richer countries.

Other means of control

There are a number of other means that are used, during trade, to control resource usage. These include

i) Tariffs

Money, by itself, is useless, if it cannot be used to get resources, and this is what happens to financially poor countries, once the rich ones get the resources.

When the rich countries get them are then processed to create newer items. This processing is what is referred to as manufacture. The goods that are manufactured by the financially rich countries, using the resources that were gotten from the financially poor countries tend to remain in the financially rich zones. If similar goods are manufactured from outside these regions, they are not allowed into them, through the use of tariffs. Tariffs, which are the taxes that are placed on goods that cross a boundary are therefore used to control what gets into and out of regions. Though all countries have tariffs on their resources, the desired effect of keeping the resources in the country of origin applies when the intended buyer does not have enough money. As can be imagined, this happens to be the case with the financially poorer regions.

Under the subject of tariffs also comes the “buy American” clause in the money that recovery

ii) Subsidies

So far we have looked at cases where the resources are either produced in financially poor or financially rich countries. There are, however, situations where producers from both regions produce the same items. In such a case, if the control over resource usage has to be kept, a method has got to be devised that would allow only those producers that the financially rich countries want to produce.

One of the methods adopted, in this situation is the use of subsidies. This is when the producers in financially rich countries, such as farmers, are given extra money by their governments. Their receipt of these monies means that they could go on producing even when the cost of producing the item is more expensive than its price on the market. As the producers in financially poor countries do not have these subsidies, when the cost of the items goes below the cost used to produce them, they would have no option but to end the business. This then leaves only the producers in the financially rich countries to produce the items.

The dream of development

It is easy to see how trade or the conditions under which it takes place is used to create a situation where the uses of resources are concentrated in the financially rich regions. Corollary to this is the fact that those who live in financially poor countries are left with a situation where they do not get to use the resources that they would require to allow them the opportunity to become developed.

As can be imagined, people everywhere want a better quality of life for themselves. The development that this entails involves their access to the required resources. For those that are in financially poor countries, this desire creates a struggle that pits them against the system that ensures that the usage of the world’s resources is concentrated in the financially rich countries.

My belief is that the resources that the earth has are enough to fulfill the needs of the population of the earth. What hinders this is the greed of those who control the way the resources are used, and who want to keep the situation as it is. To counter this would take some struggle.

This struggle has got to be one that anyone that is interested in living in peace has got to be involved in, regardless of where that person lives. For those that live in the financially poor regions, it is for them to be able to remove themselves from the choke hold that the conditions of trade have put on them, which makes sure that their resources and others that they might need or want are not used by them.

One could say that what is happening in Palestine, where the Palestinians are taking on the might of the Israeli colonizers is an example of this. Another example is that the Iraqis against the most recent invaders of their land, led by the United States of America, or that of the local population of the Niger Delta in Nigeria against the multinational oil-producing companies are all part of the struggle to disrupt the imbalance in the use of resources. All these are examples of struggles in which the local population wants to have control of the resources that come from their land.

That struggle is one that has been won in certain places like Cuba, which for the last sixty years has been able to use its resources for the local population. This independence probably accounts for why in its “Living Planet 2006” report the World Wildlife Fund (WWF), using the UNDP’s Human Development Index and the “ecological footprint” defined Cuba as the only country in the world that had sustainable development.

The struggle is also one that is being won in Venezuela, where for the first time in its history the resources of the country are being used for the benefit of the majority of the local population. This example of Venezuela is one that is slowly being copied in countries across South America, where for example in Bolivia, for the first time in its history it has a president who is Native American.

As for those that live in financially rich countries, it is worth pointing out that the lifestyles that they enjoy, through the use of the resources that come from the financially poorer regions and the protectionism of the resources that come from their own regions are what accounts for the suffering and lack of development in the financially poor countries. As such if the people who live in these regions want to be involved in the struggle to bring about a balance, they would have to make demands on their governments to change the rules under which trade with the financially poor countries happens.

Another practical method would be for them to in the first instance use products that are made locally. In the event that those cannot be found, ensure that what they consume is made without abuse to the people who make them as well as to the environment. One of the conditions of development is access to information. The development of such consumption habits would require having information about the products that are consumed, which would require a request for information on the processes involved in the manufacture of the products that are used. Such information, if it is acted upon, will in addition to allowing the possibility of development in financially poor countries, also would lead to the development of those who act on it. This is because it would enable make choices on the way that they want to live.