Lesson video

Hello geographers.

My name is Mrs. Griffiths, and here we are again, with today we're gonna be looking at strategies to reduce the development gap.

Now we're gonna be focusing today on Fairtrade as a possible strategy, debt relief, and also giving international aid.

So let's think about how they reduce the development gap and let's make a start.

And our outcome for today is I can explain how Fairtrade, debt relief, aid and intermediate technology can reduce the global development gap.

We've got some keywords here today, and they are trade, the buying and selling of goods and services between countries.

Fair trade, a system that ensures producers in LICs and NEES get a fairer price for goods produced, improving their income and working conditions.

Debt relief.

When a bank or government tells another government they do not have to pay back the money they owe.

Aid, support which could be money, goods, or services, given to improve the quality of life of a recipient.

And intermediate technology.

This is technology suited to the needs, skills, knowledge, and wealth of local people in the environment in which they live.

Now our lesson breaks down into three parts here.

So we're gonna start with the first part, which is how can Fairtrade help to reduce the gap? How can Fairtrade help to reduce the gap? Free trade is the idea that goods should flow freely across international borders from producers to consumers without restriction.

Over time, countries may develop a comparative advantage.

Advocates for free trade suggest that all countries can specialise in producing specific goods efficiently.

That's what we mean by comparative advantage and therefore sell things more cheaply, which in the end benefits all nations.

In reality, of course the global system of trade does not operate like this.

Can you suggest why? Okay, let's have a look at some answers on that one.

LICs start with an economic disadvantage.

We have a picture here of a cocoa pod growing, which is a food commodity cocoa.

In LICs, most of the population are still employed in primary industries, mining, farming, and fishing.

Why is this a disadvantage? Well, raw materials like cocoa, coffee and bananas are low value commodities traded cheaply within the global market.

Oversupply, because these things are produced around the world.

For example, as a result of erratic weather means the price can fall.

Value is added by processing these raw commodities.

And this happens mostly in higher income countries.

With much smaller economies therefore, these low income countries cannot influence the trade rules of high income countries like the USA or the newly emerging economies like China.

Check for you here.

True or false? International trade benefits everyone equally.

And remember, I'm gonna want you to explain why in a moment, so pause the video.

Okay, and if you said false, can you explain why? The answer we had was LICs start with an economic disadvantage because so many people rely on primary industries mining, farming, and fishing for their income.

These industries produce raw materials that are traded cheaply within the global market.

So well done if your explanation was something like that.

Trade blocks are groups of countries with common goals and trade rules, meaning cross border trade is cheap and easy, for example, within the European Union or the EU.

But imports from countries outside the EU are limited.

Tariffs make some goods more expensive to protect the home industries within the European Union and quotas are maximum levels, I suppose, of the volume of specific goods that can be brought into the country.

These quotas limit the size of the market.

And of course many low-income countries do not have access to these trade blocks in terms of their trading.

Now, how can Fairtrade help with all these unfair rules? Fairtrade is an international movement that seeks to address problems of the global trade system by supporting producers in low income countries.

So we've got a table here, which gives us some ideas about what's going on with the Fairtrade minimum price, and then also something called the Fairtrade Social Premium.

So the fair Trade minimum price, what is that? It covers the cost of production, is agreed in advance and increases if the market goes up.

What's its impact? Well farmers have greater financial security allowing them to plan ahead.

Now what is the Fairtrade Social Premium? This is an additional sum of money that's made available on top of the Fairtrade minimum price and it's paid to communities or cooperatives.

What's the impact of that? Well, it allows farmers and workers to invest in social, environmental, or economic projects that benefit their businesses, families, or community.

For example, a community might decide to build a new primary school.

Right.

So if I just check what I've just with you, what I've just said there completely sentences that describe how the Fairtrade minimum price works.

So pause the video, work out what the gaps are and then restart it for me.

And if you said the Fairtrade minimum price is agreed in advance and it covers the cost of production, it increases if the market price goes up and it gives some financial security clearly meaning farmers can plan for the future.

Well done if you've got all those gaps right.

Now, that's the Fairtrade minimum price.

What about the Fairtrade Social Premium? Have a look at those gaps and then restart the video when you want to check your answers.

Okay, so the Fairtrade Premium is another benefit.

I thought I was gonna say be payment then.

It is an additional sum of money paid to the community or farming cooperative to be, spent on social something or economic projects.

What might that something be? It's the environmental possible projects.

So there's projects that help develop their businesses or the community.

Well done fulfilling the gaps in there.

Now Dabilla is a Fairtrade cocoa farmer in Côte d'Ivoire.

He has been a cocoa farmer for over 30 years.

Farmers who grow the cocoa can earn as little as 80 pence per day, which is clearly not enough to meet their basic needs.

Now how does Fairtrade make a difference? With Fairtrade Dabilla gets a Fairtrade minimum price for his cocoa and a Fairtrade premium for his community, which his community used to build a school, canteen and instal a water pump.

And that construction of the school meant that Dabilla's children had a school to go to.

So we can see a real world impact of different price and receiving this Fairtrade premium on top, which is given to the community as a whole.

I should ask a good question.

How big is the Fairtrade Movement? Well, about 12% of chocolate bought by British people is Fairtrade and one in three bananas sold in the UK, carries this fair trade mark, and that's the logo to look out for on stickers, on wrappers of your food, if you want to purchase Fairtrade food.

And if we think about the Fairtrade Movement in a different way, one way would be to look at this, how many different products there are that carry the Fairtrade mark? So in the UK, it is one of the world's leading Fairtrade markets.

There are 6,000 products carrying that Fairtrade mark worldwide, 300 different commodities and many countries are involved.

So we think about the consumer network there you've got a list of different consumers based across different continents and countries.

And if we think about the producer network, this is where the Fairtrade farmers are located.

Again, a number of regions and continents involved.

So really quite a big movement.

True or false? The Fairtrade Movement is small scale and mostly based in the UK.

What do you think? Pause the video now, remember I'm gonna want you to explain why.

And if you said false, why is that? Well, we've got the answer that the Fairtrade movement involves the trade in 300 different commodities globally and has global networks of consumers as well as producers.

So we could not describe it as small scale.

I've got a task for you now and a quote from Dabilla, who was the Fairtrade cocoa farmer we introduced.

"I did not have the chance to continue my studies, but with Fairtrade and our plantations, I can pay for the children's studies.

This is my pride because the children are the future.

Explain how Fairtrade helps to reduce the development gap using this quote.

So if you want to grab a pen now and have a little bit of a think about that, think about how you would explain that, write your answer up and then restart the video when you want to check your answer.

Okay.

The answer we had was as follows, the economic development of a country maybe limited by the skills of its population.

Producers working with a Fairtrade movement receive a minimum price above the global price, which increases their income.

This means they can afford to pay for their children to go to school.

So Fairtrade contributes to the development of a more skilled workforce.

Did you talk about skills? Did you talk about the investment in that school? Well done if you did.

Right.

Second part of the lesson, our title is can debt relief reduce the gap? Now what's debt? Well debt is money you owe, borrowed from an individual or organisation.

It must be paid back and your charge interest on the loan, meaning the amount you pay back in the end is often much more than the original amount borrowed.

This is also true for the government of a country.

Debt relief, by contrast, is when a bank or government tells another government that they don't have to pay back the money they owe.

Now why might we need debt relief? In the late 20th century, many developing nations borrowed money from intergovernmental organisations, IGOs, such as the World Bank.

What did they spend the money on? Let's have a think about that.

So loans were for developing infrastructure, for example, transport networks to support the process of industrialization.

However, for some countries, the debt burden became unmanageable over time.

And we have the example here of Mexico.

In 1982, Mexico's government said it could no longer make payments to service its debts, and it wasn't on its own.

Why did international loans lead to unmanageable debt for many low-income countries? Well there are a number of different reasons.

The first is in some countries corruption of ruling elites meant that money that was loaned to that country disappeared.

It never reached the project it was intended for.

Secondly, poor governance.

So the World Bank and other IGOs weren't keeping a close enough eye on where the money that they had lent went.

Thirdly, a fall in the price of export commodities that upon which the low income countries depended meant they had less money coming in.

And at the same time they had to pay more money out for key imports such as oil.

So overall these countries were poorer.

Another factor was the fact that some low income countries were involved in conflicts, which was very costly.

And then lastly, we have to remember that these loans were given for high risk investments.

So huge investments, huge infrastructure projects that might have been high tech.

And actually what happens is they overran and cost more than perhaps was initially planned.

So we've got this international debt crisis amongst low income countries.

What happened next? Well, I mean what did that mean for people living in those countries? It was a big problem.

The governments have affected low income countries were spending more on interest payments than providing health and education services to their own people.

And as a result, people started to protest.

Non-governmental organisations, including charities and religious groups, campaigned under the banner of drop the debt together to raise the profile of this global problem at the time of the millennium.

In 2005, a group of the richest higher income countries, including the UK, this group's called the G8, made a plan to accelerate the cancellation of debts for many highly indebted poor countries.

Now to be eligible for debt relief, low income countries must face an unsustainable debt burden.

So various criteria, that was the first.

The second was that they reform their economy according to the IMF and World Bank advice.

So for example, they had to show there was no corruption, and they had to develop and implement a poverty reduction strategy involving the participation of civil society.

Check for you here.

Complete the timeline of the international debt crisis affecting low income countries.

Pause the video now and then restart it when you want to check your answers.

Okay, so in 1982, I'm sure you said Mexico fails to make debt repayments.

It was the first of many countries.

Then in 2000 you are right.

It was the NGOs that urged different IGOs to drop the debt.

And then in 2005, the G8 agrees to accelerate debt relief plans for highly indebted poor countries.

Well done.

To date debt relief initiatives in 37 countries, majority of them in Africa, have had more than $100 billion of debt cancelled.

Now you can see the grey countries here are those in the African continent and the purple are elsewhere in the world.

37 countries, yeah.

Let me tell you what the 37th country is.

So the 37th country here is Somalia.

In 2023 Somalia's reforms meant it received $4.

5 billion in debt relief from creditors including the World Bank, IMF, African Development Fund as well as commercial banks.

Where are most of the countries that benefit from the international debt relief initiative located? Can you remember which continent it was? That's right, it was in Africa.

Can you name the latest country to benefit from debt relief? You're right, Somalia in 2023, great.

Somalia's debts were as high as 64% of GDP, which is clearly unmanageable.

With debt relief, its debts are equivalent to just 6% of GDP where they were in 2023.

So significantly different.

How did Somalia plan to spend the money, no longer spent on debt repayments? Well, that's a good question.

More than two thirds of the Somali population live in extreme poverty, which means they're living on less than $2.

15 cents a day, which is really hard for us to imagine.

With the support of the UN Somalia launched its national safety net programme.

Now that means food link cash transfers and emergency cash to support early recovery from shocks such as natural disaster, crop failure or conflict.

And a quarter of the population are expected to have benefited by 2025.

So significant change in Somalia as a result of this debt relief programme.

Debt relief is part of the UN's final sustainable development goal, SDG 17, which countries aim to achieve by 2030? SDG 13 is all about revitalising the global partnership between countries needed for the sustainable development of all.

Any problems with debt relief? Well that is a good question.

There are a couple of concerns.

One is the lack of accountability.

So these countries that had their debts written off could, if they were given more loans, could the debt crisis reappear? Secondly, the current international approach to debt relief is only limited to the poorest low income countries so that other countries that could benefit from debt relief and that hasn't been extended to them.

Check for you here.

To be eligible for international debt relief, low income countries must have? Have a read of those, and then restart when you wanna check your answer.

And if you said B and C were correct, they must have reform their economy on IMF or World Bank advice and planned a poverty reduction strategy involving locals, you'd be absolutely right.

I've got a practise task for you here.

Firstly, make a list of three factors that led to low income countries facing the problem of unmanageable international debt.

Secondly, can you explain how debt relief can help to reduce the development gap? So now's a good time to grab a pencil and paper and I'd like you to have a go at answering those two questions.

We'll discuss it with a partner and then restart it when you want to check your answers.

Okay, how did you get on with this first task? Make a list of three different factors that led to low income countries facing the problem of unmanageable international debt.

And we've got four factors here, but you only need three.

So the global market, a fall in the global price of raw materials that a country exports, while the price of key imports rises led to a situation where low income countries were poorer.

Secondly, another reason might be corruption.

Corruption within a country meant that officials were stealing money meant for investment in infrastructure.

Poor governance within IGOs.

So few checks were made on where the funds were going.

And then fourthly, the high cost of conflict.

If that was the case in some lower income countries.

How'd you get on with a second task? It was a bit tricky, wasn't it? You had to explain how debt relief can help to reduce the development gap.

And we've used a real world example of Somalia to kind of make this clear.

In Somalia, debt relief has meant that the government has more money to spend on its people.

Without having to make interest payments on its previously huge debts, the government set up a new programme known as a national safety net that makes emergency cash payments to the poorest families.

Such payments help 'em to cope with economic shocks such as crop failure.

This programme can make a big difference in Somalia where many people live in extreme poverty and have few savings.

Is that similar to your own answer? Well, well done for having a go at that one.

Now, third part of our lesson here.

How can aid and intermediate technology help? So aid, I'm sure you know, is the support given to improve the quality of life of a recipient.

It might take the form of money, goods or services.

And here we've got a map, choropleth map of foreign aid received per capita.

So per head of population in 2023.

The darker the colour, the more foreign aid received.

Have a look at that.

What's the pattern shown? Well, I'm sure you spotted that the countries that received more aid per capita in 2023 were mostly low income countries, with some exceptions.

One exception might be Ukraine.

And that we can pick out some kind of hotspots there, can't we? In terms of Polynesia and Micronesia, central Africa and also Eastern Europe and southwest Asia.

That's what jumped out to me.

Now how many different types of aid can you name takes different forms, doesn't it? International aid, perhaps you've studied this a little bit lower down the school.

So we've got short term aid that might take the form of humanitarian aid.

I'm thinking about food and water supplies, perhaps emergency tents.

Bilateral aid, that's government-to-government aids.

That's thinking about a form of funding.

Multilateral aid, different type of funding where multiple governments are involved or perhaps an IGO, like the UN.

Long-term aid.

So we might be looking at promoting sustainable development, perhaps looking at how communities can adapt to climate change using new crop varieties.

And tide aid linked to the self-interests of the donor.

And then lastly, we have voluntary aid.

So this is aid that's donated or monies that's donated by civil society and that it's given to local communities by an NGO.

And we've got an example there of Oxfam, which I'm sure you've heard of.

True or false? International aid is a gift to help people out in an emergency.

Have a think about that one.

Pause the video and then restart it to check your answer.

Well I'm sure you said false, but can you explain why.

Our answer was as follows? It is not always provided in the event of an emergency.

Aid may be given to support the sustainable development of a community, for example.

So we might be looking at improving health or education services in an area to benefit local people.

It need not be about a disaster or an emergency.

Now let's think about another country Nepal here.

So we have a UK charity called Practical Action that provides aid to rural communities in Nepal, amongst other countries.

And Nepal is a low income country in South Asia.

Now we have some data here from the UN's Human Development Index.

We've got life expectancy, mean years of schooling and gross national income per capita.

And if we look at comparing the two countries, Nepal and the UK, we can see that Nepal, on average, the life expectancy is a decade less than in the UK.

Mean years of schooling is, about a third.

And gross National income is about a 10th of gross national income in the UK.

So we can see this is a very poor low income country.

Another bit of information or context for you.

This is a topographical map of Nepal.

Now the very white areas are the Himalayas.

And then below that we have the dark brown and, red parts of the map, and those are also high elevation.

But you can see that topography is a big factor of life in Nepal.

And perhaps you can start to imagine how that might impact on transport networks within this country.

The far west of Nepal has very challenging terrain indeed.

So narrow trails, steep hills, and mountain ridges.

This is where Practical Action works and I've used the geography visualizer to grab this image.

You can see I've focused in on a particular town that the farmers, the Practical Action works with are close to.

And I can zoom in even further on my next image.

You can see those terraces because the slopes are so steep here what's happened is people have terrace the land to create, many fields that they can work.

But you can see how steeply sloping the land is there.

The area is fertile and suitable for farming, but produce must be walked to market.

And this is an arduous journey carrying a heavy load which might take two to three hours.

Practical Action has funded and set up a gravity ropeway, an intermediate technology that benefits local producers and the community.

And we have a photograph of it here.

Let me explain a little bit more about it.

The gravity ropeway operates on a gravitational force.

So it doesn't require costly fossil fuels, meaning it's a sustainable development project.

It consists of two trolleys rolling over steel wire ropes suspended between two stations, and it takes two minutes to transport goods.

So it can transport goods of a weight of 90 kilogrammes from up to down and 30 kilogrammes from down to up.

Let me add some arrows to the diagrams so you can picture that.

Pretty clever.

The gravity ropeway is operated and maintained by local people.

These workers are paid by charging the community for its use.

And what's been the impact of that aid? Well, multiple positive impacts.

This ropeway helps farmers get their produce to the nearby market.

It transports essential items from market to home.

And it also leaves more time to do household work.

Fourthly, increased interest in farming within the community has resulted from being able to see how they can get their produce to market.

And so Practical Action has set up a group to educate local farmers to help 'em upgrade their agricultural practises, expanding the produce they harvest.

Check for you here.

What are the benefits of the gravity ropeway in rural Nepal? Have a look at that and then restart it when you want to check your answer.

That's right, there was more than one correct answer.

So the benefits include easier access to market for farmers boosting their income.

More time for household chores and farm work, and also paid employment and training in ropeways for locals.

Well done.

Practise task for you then.

Firstly, state two ways that Practical Action's aid has helped people living in rural Nepal.

Secondly, can you explain why the gravity ropeway is an intermediate technology? Thirdly, can you discuss this view with a partner? "I'm not sure international aid is always the best strategy for reducing the development gap." So pause the video now, grab a pen.

You've got some tasks to do there and then restart when you want to check your answers.

Okay, how do we get on? So task one, state two ways that Practical Action's aid has helped people living in rural Nepal.

We had firstly the international aid provided by Practical Action benefits farmers who can get their surplus produce to market more easily via the new ropeway boosting their income.

Secondly, time saved by transporting goods up and down the valley via the ropeway can be invested in household work instead, meaning families have better maintained homes providing them with a better quality of life.

Well done if your answer looks something like that.

How'd you get on with this second task? We had to explain why the gravity ropeway is an intermediate technology.

So thinking about our definition we had at the start of the lesson.

Intermediate technology suits the needs, skills, knowledge and wealth of local people in the environment in which they live.

The community living in the west of Nepal struggles to get their goods to market because of the difficult relief and lack of infrastructure.

The ropeway directly addresses this challenge related to the environment in which they live.

And because it's fairly low tech, it can be maintained by members of the community.

So that's a real benefit when the charity has to move on to look at helping a different community.

And then thirdly, I asked you to discuss this view with a partner.

How did you get on? Did you think about the pros and cons of international aid? We had, well, international aid can help to support the poorest people in low income countries and newly emerging economies, particularly in the short term.

But over many years it could create dependency.

International aid should meet the needs of local people, be appropriate to their skills and the environment or place in which they live.

And it is a useful strategy, but it's not the only one, industry or investment we're thinking about perhaps FDI.

Also, Fairtrade or debt relief may also help to reduce the gap.

So there are a range of possible options in terms of what we can do, strategies to reduce the development gap.

So what have we covered today? The global system of trade is not free and fair.

As trade blocks, tariffs and quotas hamper the flow of goods.

The Fairtrade Movement aims to address some of the problems of the global trade system by improving incomes and working conditions for producers in low-income countries.

Debt relief can enable the government in low-income countries to invest in public services and support the poorest.

International aid can support the development of essential infrastructure, in particular via the use of intermediate technology.

Wow, we've covered a lot today, haven't we? Looking at those three different strategies.

So well done.

Thank you for your time, and I look forward to seeing you again soon.