ECONOMIC GEOGRAPHY


1 Unequal and unjust trading relationships ● As in colonial times, Uganda continues to be generally an exporter of primary


products and an importer of manufactured goods. Although the value of manufactured exports has grown in recent years, primary products such as coffee, cotton, tea and tobacco still make up approximately 60% of Uganda’s exports. Coffee alone makes up one-fifth of the value of all exports. This high dependency on coffee earnings creates economic dangers for Uganda. If the coffee crop should fail or if the price of coffee beans should collapse, the country would find itself in serious economic difficulties.


● As in colonial times, the terms of international trade tend to perpetuate poverty in former colonies such as Uganda. The prices of most raw materials tend to remain relatively low on the world market, while the prices of manufactured products tend to be unreasonably higher. It is estimated, for example, that less than 10% of the price paid in Ireland for a jar of coffee actually goes to Third World coffee growers. Most profits go to First World companies and individuals who transport and process coffee beans and who market and sell processed coffee.


● Another problem relating to global trade is that the prices of Third World primary products often fluctuate (rise and fall) greatly on world markets, while the prices of First World products are more likely to be protected from such fluctuations. Over the past 40 years, for example, the price of coffee beans has been allowed to fluctuate wildly under free market conditions (see Figure 4). These fluctuations make it very difficult for countries such as Uganda to plan their economy for any extended length of time.


10


0 1 2 3 4 5 6 7 8 9


1975 4 32 1980 1985 1990 1995 2000 2005 2010


Fluctuations in unprocessed coffee prices between 1973 and 2011. (a) In what year was the price of unprocessed coffee at its peak and in what year was it at its lowest? (b) Calculate the range between the highest and lowest coffee prices shown. (c) How might the price fluctuations shown affect the economy of coffee-exporting developing countries such as Uganda?


$US per kilo


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