What is Trade: Exchanging articles for equal value is trade. Initial system of trade was based on barter system when currency did not exist. People did not have excessive needs so they exchanged only the surplus produce. Value of products then too was determined on the basis of demand and supply depending on the necessities. Present world necessities pushed trade to establish its importance.
Thus trade became important factors of economy. To improve individual/ national/ international economy trade plays important role. Trade we can identify in forms of labour/ services and goods. Earning, savings and expenditures are the key sources to analyze the economic structure of whether individual or society. Research and development gave foundation to modern technologies resulted high competition; those who don't follow timely, they lag behind. Who are the poor: People unable to access to the basic needs of life due to lack of sufficient resources or the buying power.
In simplest way people who come under the poverty line determined internationally. I feel poverty too is classified in two categories; Poor without basic amenities and poorest of poor without basic needs of human. Nearly 60 % of present world population of 6. 35 billion is poor and nearly 30-40% is the poorest of poor who lack even very basics for life. Most poor live in rural villages mainly depend on agriculture and labour. They have small piece of agricultural lands or partially employed or unemployed.
With income generated from their resources are enough to meet basic needs. Contribution of unorganized sectors is significant in rural and urban areas of developing countries. Nearly 80% or more are directly or indirectly involved in these sectors where labour regulations are followed least. Wage determination is based on the demand and supply of labour force.
Countries with thick and illiterate population generally lack much demand of labour force, so, people have no option but to work in existing condition. Most prefer hiring cheap labour to bring down cost of production; nevertheless, they are unable to compete internationally as use traditional methods or semi modern systems. Trading of most their products too is through informal channels where more and more mediators are involved thus real people involved does not get adequate share. web some developing countries role of mediators are more important than the buyer and seller. For example: A small illiterate farmer depends contractors to dispose off the produce, goes to market then distributed through agents to other wholesale markets of the cities and then to retail shop. By the time it reaches from producer to the buyer the price escalates 10-15 times, this situation is not in agriculture alone rather exists with industrial and medicine products too; a living example of one country the ex-factory cost of a tablet is say 1/2 cent but when reaches to the final customer the price is 50 cents.
Transition of one product from many hands only inflates the prices. Escalation during the transition goes into the hands of mediators. They are only stockiest and do no value addition. The real players' buyers and sellers suffer in the middle of middlemen. Similar situation is in textiles or other exports, many hands are involved from raw to finished products without adding value, unwanted escalation of cost leads to failure in competitive market. Finally the producer is still poor despite the hardship as does not get right price.
Governments need to pay attention for the reformation by introducing systems of mechanism that reduces high involvement of mediators. Producers or villagers need to be better equipped with communication and resources. So that the producer and final buyer the right price. Keeping in mind the Major population lives in villages, education, research and development is in accordance to the requirements of the population.
Many areas in agricultural and forest sectors are still unexplored. Most agricultural products come to the market in raw condition, whereas, if value added products comes to market can generate more jobs. More jobs mean more, income, consumption thus more resources. Funds allotted for rural growth in many cases is unutilized or absence of takers or slips into the hands of corrupt politicians or bureaucrats. Best way is to train the villagers and invest in the project, controlled by the village individuals or group and share the benefit with them. Thus the assets and machinery belong to financial institution and invested money is also covered timely provided marketing of produce in right hands.
But before that education system be evolved that trains villagers to add the value to their produce. I happened to visit one of the tourist spots close to tribal area. I bought a bottle of traditional squash from one tribal society shop, made of some plant root that was used as traditional medicine too. Local tourists said that was good for digestion, cool and soothing and give freshness. What shocked me! The item with such value was sold in old used beer bottle with lousy label. She could sell only 5-10 bottles a day that too to people who knew the value.
This is the area where the research and development is required make the product to the taste of people, good look and better marketing. If this product is properly packed, and marketed could reach many parts of the county and overseas. Knowing the value would appreciate sales thus will benefit community. Similar situations we can observe in other areas too. Absence of awareness among local leaders and appropriate Governments to initiate value added agricultural products to flow causing village products either disposed off at pity value or left to get decomposed. These are assets but we need to know to use it for the welfare of the community.
So we read how value addition to produce and minimizing mediators help minimizing poverty and generation of employment in developing countries. Labor; whether skill or unskilled is trade of services, is significant to present world order- Is an important factor of economic construction of any country. Skill laborers are in grate demand any where in the world. But in developing countries lack of opportunities many times give disappointing situations so search their fortunes overseas. For unskilled laborers without education; opportunities and living conditions are very discouraging. Lack of opportunity in rural areas pushes them to urban cities to overpopulate.
Nearly 50% of developing countries lack modern education. And over 60% from rural population of developing countries are still either illiterate or semi-literate, especially, women education is discouraged. So they stay back in education standard and self dependence. They find opportunities only in unorganized sectors where least skills required. Hence, they have to be content with available opportunities and pathetic living conditions.
Women contribution to country's economy remains negligible. Women in such countries are the poorest and oppressed by both religious and bad Governance of Governments. Buying power of the individuals evaluates country's status. Education plays significant role in the development and if the education helps creating demand of jobs, is the best. Education campaign succeeded significantly in many developing countries specially the urban population took advantage and uplifted themselves to match the world. Education campaigns developed skilled force to almost invade the developed countries by their capabilities and low cost.
But there are very much restriction for educated youths for job permits. Many intellectuals seek to go abroad are forced to stay back due to restrictions of visa permits. This is an issue to be dealt in World Economic Forum and World Trade Organization. Trade liberalization should not only mean commodity transfer, liberalization of fred transfer of employment opportunities should also be a part of trade. Employment is the rendered services and has to come under definition of "Trade." web developing countries, despite having own strong minerals and natural resources are poor. Cause is lack of proper and advanced knowledge for processing/ shaping and finishing or adding value to it.
Raw or semi finished goods are traded at pity value. (We have to realize one more point that over excavation and deforestation to promote sales would sustain economically but devastates the environment) Developed countries on the other hand with advantages of modern technology convert these to value added finished products, patent them for monopoly then market for high value. Such products can not be avoided as essential to keep up with modern time. If supposing export price of iron ore is $US 60 a ton, import price of value added products for same quantity is $US 600 per unit or go much-much higher depending items. The producing country of iron ore has to sell 10 tons to buy 1 ton of value added item. In case the requirement is more, has to increase out put to balance traded value, if lack capacity, export own essentials to minimize debt.
Or seek help of International financing institutes to get loan to clear debt. Negative balances weaken economy to escalate inflation. For own advantage technology transfer is avoided or if transferred are with conditions say for high price, high installation cost, spare parts, repair, restrictions on use and etc; etc; this prevents utilization sensibly. Restricts poor to grow thus depend on basic items like spices, cereal, minerals, forest wood, textiles etc; or semi-finished for its exports in order to maintain. Many of basic items have high competition in the market, anti dumping problems or agricultural subsidy. Thus rich gets richer and poor to poorer.
Open market is an open competition and beneficial to equal competitors thus poor don't gain much out of it. Research and development benefits are with only a few capitalists or developed countries; the advantages are not transferred or transferred conditionally so benefits do not reach all countries and its common people. These benefits can reach to all only when research and development is with international bodies or organizations, who can offer to share the research by charging expenses incurred including royalty to researchers. It is now open world after the cold war so secrecy of research is not that essential except for self defense research, if done is only for domination and monitory gains. web under/ undeveloped countries are involved in boarder conflict with neighbors, escalating boarder marinating cost. Military maintenance dominates the country planning to claim unexpected share of Government budgets.
Also fueled by race to acquire latest warheads contributes to hike. Role of corruption among politicians and bureaucrats add up to escalate weapon acquiring expenditures. To compensate excessive allocation to military budget slashes social expenditure and loads new taxes on public to affects poor. Bad relation ruins trade between neighbors. Many items produced in neighboring countries can easily be accessed at better and cheaper price are generally imported through third party. What could get at normal now from third country unfortunately in double! Trade relation among neighbors can solve many problems even if any dispute exists.
Both communities exchange their cultures too during trade, thus understanding is built. World is opening up to establish mutual relationship to promote trade but these some countries fail due to inefficient and corrupt Governments. Establishing trade with neighbor is more important than the relation with third nation because dependence develops peace and strength. Neighbors should visit each other frequently. Consulting third country only deteriorates the situation best way is to settle mutually. Similarly, civil war as in African countries is disastrous and an obstacle to growth.
Greed of money has extended to extreme that corruption is now common in developing countries. In some cases not even 10% of Allocation on social sectors reaches to common man. Role of UN to bring peace in these areas doubts the minds of its effectiveness. Inability of UN Security Council or others to reduce such tension is fails the purpose of its existence. Real people who deserve, gets cheated assemble to oppose the Government, to me is civil war. Acquiring of weapons to thwart and acquiring weapons to oppose by both is fortune to weapon selling countries but misfortune to the population who suffer economically and mentally.
Major portion of weapons is imported from developed countries and surprisingly 5 permanent members of UNited nations responsible for global peace and security are suppliers of 85% of imports by world. United States is the largest exporter among them. Just imagine: How can we expect peace in the world? Why would they love peace? A weapon export is the most profitable industry in the world. Weapon manufacturing lobby is so strong in developed countries. Below link will clarify how these companies gain tremendous influence on political figures by pumping huge amount in presidential elections and other activities. Arms Trade is fortune for manufacturers / dealers and politicians / bureaucrats of both exporting and importing countries but misfortune to the population with more burdens of taxes on account of subsidies to manufacturers and high cost of imports.
Global peace can not be achieved as long as arms trade has huge profits. Arms trade will continue by hook or crook methods and adopt corrupt practices to promote sales. No manufacturer and the producing country will like to stop as long as political election is funded by arm manufacturers lobby. World military expenditure is nearly 1000 billion $US will further increase. UN security council functioning will always fail as long as permanent members having veto rights are the top sellers of weapons. UN needs to be democratized by giving rights to all members and 2/3 voting decisions.
Only democratic UN will be able to curb by imposing sanctions and penalties on arms trade. Corruption exists almost in every country of modern world. Capitalists/ Industrial sectors play important role to corrupt politicians by funding the elections and favoring. Thus channel of corruption begins from politicians to bureaucrats then pass to most Government; bribe becomes wheels of planning and movement of files. Rise in cost of political campaign has resulted immense financial dependence. Individuals with financial capacity or who are able to raise huge funds considered having more chances of eligibility.
Thus is an investment, would always expect high returns. Interest of elected member is tilted to favor finances or who favors. Government become trade representatives' of corporate sectors. Population when vote to elect expect the development and solutions to the problems get cheated. Illicit trade: Surprisingly illicit trade mostly flourishes in developing/ poor world; growing uncontrolled. Contribution to its growth is by the youths as they are the soldiers of this empire, who find this opportunity as better or lack of opportunities motivate them to indulge in these activities.
Corrupt local politicians and bureaucrats are the helping hand for information of movements to escape. Terrorists/ militants mainly survive because of this flourishing trade. With the help of terrorism scope of illicit trade has widened. Their major fund is generated through these activities to procure weapons, so is in their interest of its growth. More and more youths got recruited to shape planning to destabilize to world order. We should not take illicit trade lightly as its roots have penetrated deep..