Fair Trade versus Aid

I wanted to discuss Aid and Fair Trade.

Developed countries advocate Aid as a solution to poverty’s problems in developing countries. Has it been working? No.

It is merely a political propaganda to keep the general population happy in those developed countries. If the public thinks that their government is helping with poverty they won’t stand up and shout.

Aid has benefits, but it hasn’t really had any impact on developing countries’ living standards or GDP per capita. This is perhaps because of two reasons: 1) much aid is given to governments who have high rates of corruption, and 2) aid is not monitored (the money may not be distributed to the best industries/regions/uses).

Aid has its flaws. Perhaps the easiest way to empower a country is to empower its people. By encouraging trade with developing countries and giving them a level playing ground, they can earn their income. This will allow the income to be distributed as freely and fairly as possible, and be spent on those things which matter most to the people/the country.

What I have found is that the people, who are in most need of money, would prefer to earn their incomes rather than be given free money. They often  choose to spend it on educating their children. This to me seems like a worthwhile cause. Fair trade advocates earning money, whereas Aid is like free giveaways. Fair Trade is sustainable, Aid is a waste. What do you think is the better solution?

If you want to watch an interesting talk about how Aid funds are actually used versus how they should be used, try this TED.com video by Esther Duflo – Social Experiments to Fight Extreme Poverty.

3 Comments to “Fair Trade versus Aid”

Nice Justin, my thoughts exactly!

July 8, 2010 Reply

[...] fair trade and aid are not the same. Aid is free money given to governments (often with high levels of corruption) with no constraints and [...]

July 9, 2010 Reply

Perspective of the 1960′s when US Agency for International Development first was set up and the programmes were education, and socially progressive. Pres. Nixon brought in crony capitalism so the projects shifted to infrastructure improvements like roads and hydroelectric dams. Presently the aim of most aid seems to be to concentrate power in corporate hands, with massive tasks that help deliver rural produce, minerals or electricity to urban centres. USA is intent on achieving the most advantageous commodity tax measures and transportation costs. Their focus is Competition within American Free Trade Agreements; Border security programs; Duty deferral, all designed to externalise environmental costs. No need to be concerned about the “Limits to Growth” since stockholders are older folks anyway.
Cynicism is altogether justified. On the other hand, TRADEAID educational projects appear spot on. Small organisations are best able to abide by their principles.

March 2, 2012 Reply

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