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Guide to Development Speak


Fair trade

A system guaranteeing equal and less exploitative dealings with producers in developing countries.

Producers are offered stable prices for their goods and long-term business relationships directly with farmer cooperatives, which avoids intermediaries or middlemen. Money is also paid to reinvest either in the business or social and environmental schemes among the wider community.

The Fairtrade Foundation awards a consumer label, the FAIRTRADE Mark, to products which meet internationally recognised standards of fair trade.

Fertility rate

The yearly number of children born alive per 1000 women within the childbearing age bracket (normally between the ages of 15 and 49 years).

Financial capital

The value of financial assets, such as cash or shares. This is opposed to real assets such as buildings and capital equipment.

Financial intermediary

Any financial institution, public or private, that serves to channel loanable funds from savers to borrowers. Examples include commercial banks, savings banks, Development Banks, and finance companies.

Financial liberalisation

Eliminating the ways governments are able to intervene in financial markets.

First World

The now economically advanced capitalist countries of Western Europe, North America, Australia, New Zealand and Japan. Also referred to as the developed countries or the North.

Fixed exchange rate

The “pegging” of the value of one currency to another, usually that of an economic powerhouse such as the US dollar. Before the euro was established, countries within Europe had their currencies pegged to Germany’s Deutschmark to prepare them for monetary union.

Focus group

A method of collecting information for research and evaluation where, typically, a small group of people is assembled for the purpose of obtaining perceptions or opinions, suggesting ideas, or recommending actions.

Foreign aid

The international transfer of public funds in the form of loans or grants. It can be either directly from one government to another as bilateral assistance, or indirectly through a multilateral development agency like the World Bank.

Foreign direct investment

The investment by a firm based in one country in production or other real assets in another country. A significant feature of an increasingly globalised economic system where multinational companies use foreign direct investment to tap natural resources, access lucrative or emerging markets, and keep production costs down by accessing low-wage labour in developing countries.

Foreign exchange

The system by which one currency is traded for another. It is needed for international trade because countries do not share common currencies. as well as for making foreign debt repayments.

Foreign reserves

The total value usually expressed in dollars of all gold and other reserves held by a country as a fund from which international payments can be made.

Free trade

Trade which in theory is free of legal or other restrictions such as tariffs – money charged to import goods - or physical quotas, such as limits to the amount of one type of product that can be traded.

Free trade area (trading bloc)

A form of economic integration in which there is free internal trade among member countries but each member is free to levy different external tariffs against non-member nations.
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