- be aware that the issue is controversial
- many argue one or the other is more important in development of a country
- both equally important
- South Korea relied on trade-led growth
- Burkina Faso and other African LDCs relied primarily on aid
- Bangladesh is an example of a country which bridges the gap between the two
- often favoured due to example set by Asian Tigers
- South Korea an example of a country implementing trade-led growth
- opening markets to international trade = rapid growth and industrialisation
- strong manufacturing sector whose production was cheap and able to expand through FDI
- able to flood export markets with cheap products whilst other countries were in recession
- attracted interest of TNCs
- aid from USA after Korean War
- contributed to huge amount of GDP - 18.5%, but economy still struggled
- wasn't until development of manufacturing sector that SK properly industrialised
- due to creation of NAFTA, Mexico became one of the largest recipients of FDI among emerging markets, receiving $156 billion
- Europe combined is able to trade more efficiently with the rest of the world and is more efficient than 28 countries competing with each other
- EU grown from much more than a means for trade, but also towards social, environmental and political cooperation
- Romania's economy has grown by 7% since the country asked to join the EU
- e.g. East Asian Financial Crisis
- Asian economies started to fail in 1997
- confidence in Asian markets fell and TNCs and other investors withdrew their money
- Japanese recession in same decade meant that export markets shrank
- cheaper workforce = cheaper products = more efficient production
- NICs have to base their 2ry industry on more high quality goods to retain TNC and consumer interest
- although products, e.g. electrical goods, sell for more money they require more specialist machinery and higher skilled workforce (education up for country-?) = more expensive to make
Aid:
- can be both economically and environmentally sustainable - NGOs' influence in Burkina Faso
- 80% of country live rurally --> depend on agriculture
- desertification and increasingly frequent droughts caused crops to fail due to lack of moisture in soil
- huge number of people in poverty (>36% below poverty line)
- due to food insecurity people have little alternative for income
- NGO works in Sahel Region with local communities - 'pro-poor growth'
- planting trees through forestry schemes and teaching people about more sustainable agriculture and food security
- trees provide food sold to get income (Tamarind Tree - pod-like fruit sold to restaurants globally) --> children to shl etc. -->literacy rate up + skilled workers in future
- women entrepreneurs more involved in local community as leaders and having active roles regarding future of forests
- e.g. Tanzania and Botswana during economic crisis in 80s and 90s
- still continue to rely on aid to make up annual budget rather than independently fund economic growth
- mainly confined to LDCs with inadequate infrastructure and less skilled workers to produce more than raw materials to sell
- Bangladesh example of a country which has been equally dependent on trade and aid - reinforces idea that the two must co-exist
- balance for each = vital for agricultural sector
- without aid helping farmers develop sustainable farming methods and introduction of fertiliser etc., agricultural workers won't get more profit from traded goods - production not efficient
- aid won't be influential if country hasn't established markets to sell produce to
- UK enabled >100,000 farmers to gain improved access to markets - strategy involves both aid and trade
- though low pay and poor working conditions = trade doesn't always ensure country's development has reached the individual
- external aid may be required to improve working conditions and pressurise industries to increase minimum wage
- likewise, 'top-down' aid doesn't always find its way to communities - esp. with corrupt government
- both equally important
- although trade = more long-term
- aid = short-term
- factors inhibiting path to development often come from country itself - poor infrastructure and education - can be resolved with aid and allowing country to pursue export-led growth
- aid may thus be a way to initiate growth and trade to sustain it
- 'bottom-up' aid strategies more effective than 'top-down'
- similarly trade must be able to support the individual too