ECONOMIC GEOGRAPHY


Hypocrisy First World countries and political unions such as the USA and the EU often pressurise developing countries into obeying the rules of global free trade. But the USA and the EU practise free trade themselves only when it suits them. For example: ●● The USA subsidises its own farmers and farm exports. Large-scale US cotton farmers receive government handouts so that they can sell cotton on the world market at less than the cost of production. This distorts free trade by artifi cially driving down the price of cotton. Cotton growers in countries such as Uganda or Mali cannot produce cotton at such artifi cially low prices. Many of them therefore go out of business and their countries are pushed further into international debt.


●● The EU protects its own manufacturing industries by placing import tariffs (taxes) on manufactured products such as processed sugar from Third World countries such as Mozambique. These tariff barriers distort free trade and hinder the growth of industry in developing economies.


Identify and discuss the point being made by this cartoon.


Terms to know


●● *Protectionism: the practice by which governments subsidise native products or place import tariffs (taxes) on imports in order to protect their own home producers and industries from foreign competition.


●● *The Majority World: another term for the Third World or developing world, which is home to 80% of the human family.


These injustices can be remedied only when First World countries practise what they preach or preach what they practise. If developing countries are forced by bodies such as the IMF to abandon protectionism* and to embrace free trade, the developed countries that control the IMF should be prepared to do the same. Third World countries should not otherwise be pressurised into meeting the demands of global free trade.


36


Democracy If global trade was more democratically organised it would probably operate more favourably for the Majority World*. But world trade is currently controlled, not by the representatives of the world’s poor majority, but by powerful commercial interests and governments in the developed world. The policies of the IMF, for example, are formulated mainly by the world’s richest countries. The USA contains less than 5% of the world’s population. Yet it enjoys an effective veto on any IMF decisions that might not be in its own interests.


Manufactured Product Prices


Commodity Prices


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20