Inequalities in trade

Cause

Developed countries such as the UK, USA, Japan and those in Western Europe have gained most from globalisation. This is because these countries have strong economies, firm trade links and their people enjoy a high standard of living. In recent years, Brazil, Russia, India and China (BRIC's) have benefited from globalisation as they have become more developed.

As many markets in developed countries are still suffering from the credit crunch and resulting recession, a small group of countries are currently experiencing economic growth.

Referred to as the 'CIVETS' - Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa, the emerging markets in these countries are anticipated to be the place for continued economic growth.

They are spread widely around the world but they share a number of similarities including young populations, relatively refined financial systems and they are not reliant on any one sector of industry.

Many developing countries that have missed out on globalisation include those in Africa, which are among the least developed countries in the world and are often politically unstable. North Korea in Asia has also lost out on globalisation because the government is very strict and controlling.

There are a number of reasons why inequalities in trade exist.

  • A lack of natural resources to develop or sell.
  • High lliteracyi rates so lack of skills to develop resources.
  • A lack of industrial base as most developing countries are engaged in subsistence farming.
  • Exploitation of developing countries from richer more influential developed countries – money leaves the host country.
  • International debt and poverty prevents developing countries from investing in industry.
  • Political instability and corrupt governments mean money is diverted away from industrial development, which discourages foreign investments.
  • Poor health and diseases, eg AIDS and malaria, mean people are unable to work even if they were skilled and wanted to work.
  • Natural disasters such as drought, famine and earthquakes can set the development of a country back many years.
  • Civil wars prevent industrial development as foreign investors are put off.
  • Lack of infrastructure, eg roads, railways, ports and airports, prevents products from being exported to market.