Adonis Diaries

Posts Tagged ‘Least Developed Countries (LDC)

“Think global, act local”:  Equitable Trade Associations

Question: “How to buy products, not raw materials, from producers in developing countries, instead of extending aid money that do not enhance production and development”?

With the rudiment of means of production and lack of financial institutions and facilities, how can producers in the least developed countries (LDC) compete with subsidized economies in the rich States?

People need to feel productive, that their products are worth trading and buying, and that doing commerce with outside markets is feasible.

The dialogue between equitable trade associations and producers in the LDC revolves around this critical dilemma: ” With what I have in equipments, labor, and expense of doing business, if you insist on less expensive products how can we come up with imaginative and creative alternatives to export the homemade products to the rich countries”?

How can we acquire more performing equipments? How can we circumvent transport costs?

How can we convince governments to relax tariff barriers?

How can we negotiate less stringent safety and health conditions for products entering foreign markets?

How can foreign equitable trade associations and organizations be of help?

There are many hurdles for producers of LDC to surmount:

First, how not to be excluded from dominant market mechanism?

Second, what alternative non-classical trade mechanisms can be facilitated?

Third, how to change the rules of the game established by multinational enterprises? And World Commerce Institution?

Fourth, how to encourage developed States and organizations investing in pre-processing stages of agricultural products in their country of origin, for added-value benefits, and not be taxed by the importing countries as manufactured products?

Fifth, how to relax the overcharge of multinationals’ “patenting costs” to the monopoly prices of seeds and genetically altered seeds (Monsando)?

For example, there is this federation of “Artisans of the world” that was founded in 1974 in France with the slogan “Do trade; don’t help with money“.

In 2000, Anne-Francoise Traisne presided this federation that buy artisan works and goods from the LDC producers and sell them in specialized shops around the world. T

These shops are run by 2,500 volunteers and growing fast. These local shops disseminate information on the producer of the work, his conditions, his countries…so that buyers get acquainted with the needs and problems of third world producers.

As of 2001, 5 million producers were benefiting from this federation, and over one hundred partners were cooperating with this federation.  Many more similar associations are mushrooming around the world.

In the 70’s, “Artisans of the world” got in contact with Jute Works in Bangladesh and a group of more than 5,000  women sell their products to this federation to be sold in special shops in richer countries.

The same mechanism is taking place in the poor province of Chiapa (Mexico) under Jose Juarez.

Kuapa Kakoo, an organization based in Ghana, generate 3% of its revenue of selling cocoa products dealing with Equitable Trade Associations.

In 1995, 55 international organizations of solidarity with the poor countries and the 300 million kids put to work in slave factories, producing textile and shoe products for multinational companies, campaigned under the slogan “Ethics on Etiquette (label)“.  Thousands of communities are cooperating to buy only traditional work ethic products for school children needs in schools.

It is well documented that financial credits from rich governments to developing nations have decreased by 40 % in less than 7 years.  The over 48 LDC represent less than 0.3% of world commerce.

Any cooperation by Equitable Trade Associations with local producers in developing nations must be based on sustainable trade for the long haul, including planning and programing.

Equitable trade associations are opening shops in rich countries, managed by local people, to selling products that multinational companies would not touch.

Note:  In the late 1980’s, the US economist John Williamson coined the term “Washington Consensus” to the series of recommendations or edicts by the IMF and the World Bank .  The directives intended to extending any funds to the developing States that satisfy stringent conditions such as strict budget discipline, opening up their market to free exchange of goods, allowing the market to fix the rate of exchange and interest rate, and free flow of capital.

Actually, developing States that encouraged fluctuating rates of exchange and interest were penalized by the IMF and the World Bank:  The financial multinationals preferred fixed high interest rates and stable rate of currency exchange that generated exorbitant profits.

The “Washington Consensus” ideologically motivated guidelines ran havoc in developing countries within two decades,and brought them to their knees.

Least Developed Countries (LDC):  How are they fairing with the UN?

Least Developed Countries (LDC) is a name given in 1972 to the poorest nations, during the third conference of the UN on world commerce and development. How LDC are fairing after the many UN conference made in their name?

It is 1972, Santiago, the Capital of Chili, during President Salvador Allende. The UN consisted of 120 recognized States (currently, there are 189 States).  In that UN conference, the richest powers qualified 24 countries as LDC.

For example, a LDC is generally an insular country (no commercial sea port), has no satisfactory sanitary and hygienic facilities, high rate of illiteracy, high rate of infantile mortality, and earning less than $200 per year per individual.

At that conference, the World Bank economic ideology was supported by the US government under the “Washington Consensus”.  The guidelines under the consensus was that the International Monetary Fund (IMF) would not support State policies that refused to have open market for foreign products, or refuse to adopt loose laws permitting free flow of money, or capital managed by multinational financial companies, disposing of unregulated liberal commerce, have reduced the government involvement in social institutions and contribution to health and social security…

Tough reduction in social benefits like what current England, France, Ireland, Portugal, Spain, and Greece… are trying to make their people swallow under the banner of balancing budgets while increasing huge gifts extended to their multinational companies, and financial institutions…

It is 1981, Paris.  The first UN conference focused on the LDC that have grown from 24 to 49 poorest States. The rich powers decided to allocate 0.7% of their GNP to developing countries; 20% of that miserly aid was to be attributed to the LDC.

It was all well-intentioned promise that was not kept.

Latin America States were undergoing US pressures for avoiding social reforms and maintaining oligarchic structures…Most African States were experiencing long-lasting civil wars while multinational companies were exploiting the raw minerals at full scale.

It is 2001, Bruxelles (Belgium).  The third UN conference for the LDC.  The Washington Consensus on economic guidelines have proven to be the worst remedies for the developing countries. Emerging nations suffered financial crisis for obeying the guidelines of the IMF.  The new guidelines are oriented toward human development in education, preventive health, equitable job opportunities,

The civic organizations for sustainable development, conserving biodiversity, climatic changes…have been very dynamic and virulent in transforming the UN conferences from an economic and financial Davos focus to Porto Alegre spirit.

Still, the aid to development to the LDC never increased to 0.7% of GNP. Worse, the effective development aid was reduced to half:  Included in the budget of development to poorer nations are paying off accumulated debts and paying employees of the main institution at home base.

Since 2001, the world witnessed serious upheavals such as invasion of Iraq that lasted 9 years, the financial crisis of 2008, and the polarization of world powers between the US and China.  The US counted on for maintaining financial world stability and China being given the prerogative of world effective productions…

How are the least developed countries fairing with the successive UN conferences?

Evidences point out that central government of the powerful States have given up getting involved directly.  Only civic organizations are relied upon to cover for the impotent States activities.


adonis49

adonis49

adonis49

March 2021
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