How have patterns of trade hindered economic progress in the least developed countries? Goods produced in one country and then sold abroad are exports. The goods that a country buys from abroad are imports. Countries also buy and sell services. Comparing the UK and Ghana's Trade Shop in the local supermarket and you can buy a chocolate bar made from cocoa beans grown in Ghana. Ghana doesn't make much chocolate, but it does export a lot of beans and the European Union is its biggest customer. At the same time, people shopping in the supermarkets of Accra, Ghana's capital city, can buy tinned tomatoes or frozen chicken produced in the EU. Ghana and the EU trade with each other but, of course, they both trade with a lot of other countries as well. Ghana, a LEDC will export a lot of primary raw materials such a raw cocoa beans and most of its imports will be manufactured good whereas the UK exports a huge range of different processed and manufactured goods. Should trade be free and uncontrolled? Free trade, or trade that takes place without an limits or control, is the aim of many countries. The advantage of free trade is that a country can export as many goods as it wants to its trade partners. This is good fore the farmers and businesses who produce the exported goods and services. The disadvantage of free trade is that a country can find itself swamped by cheap imports made in countries that have lower labour costs. The cheap imports are good for consumers, but could cause jobs to be lost in similar industries within the importing country. To avoid this problem some countries protect themselves from cheap products. They can do this in three ways: · Placing quotas that restrict the amount of these imported goods each year · Placing an import duty or tax on the imports to make them more expensive · Paying a subsidy to its own farmers and businesses so that their goods can be sold at a lower price to consumers

What is globalisation? The spread of information, ideas, culture and businesses around the world. The following factors drive globalisation: · Trade: improved technology and cheap aviation fuel mean that fresh food can be flown from distant places to our supermarkets · Culture: certain styles of music, television and film are now shown around the world · MNCs: large companies open branches in several different countries throughout the world · Ideas and communication: the growth of communication technology such as the internet, mobile phones and satellite television has vastly improved global interdependence. What is interdependence? Interdependence is the increasing reliance of companies and countries on the developing and manufacturing of goods. Many Newly Industrialising Countries (NICs) such as India and China have benefited from globalisation with economic growth, due to the interdependence in the global economy. Their economies have benefited from recent technological changes and from the interdependence created by flows of people, ideas and investment.

Examples of India's interdependence with the world economy Foreign investments: Indian owned MNCs, like Tata, are very successful in the world economy. In 2008 India was ranked the 10th country in the world by Forbes 2000, which lists the location of the world's biggest companies. Flows of people: Indian migrant work in many other parts of the world, earning money and learning new skills that can be re-invested in the Indian economy. For example, 613,000 people who were born in India currently live and work in the UK. Improved communication technologies: India has excellent universities and good communication networks. It produces thousands of IT and software graduates each year. One example of India's growing demand for consumer items is the rapid growth of mobile phone ownership. Flows of ideas and culture: The Hindi movie industry based in Mumbai (known as Bollywood) produced 267 films in 2007. These films are extremely popular in South Asia and with the growth of satellite TV, are now easily accessible in other parts of the world. Their growing popularity led to a stage show, The Merchants of Bollywood, which toured successfully in Europe and Australia.

Almost 90% of all of Ghana's cocoa is grown on smallholdings: tiny farms that are smaller than 3 hectares in size. About 2.5 million smallholders in Ghana grow cocoa as their main crop. Most of the cocoa is sold for export; only about 5% of Ghana's cocoa crop is processed into chocolate in Ghana. Currently about 75% of Ghana's cocoa beans are exported to the European Union. The main importing countries are the Netherlands, Germany, Belgium and France. The beans are ground into cocoa powder in these countries. Some of this powder is then exported to other EU countries where the chocolate is made. The main producers of chocolate are in Belgium, Germany, Ireland, the UK and Austria. The production of cocoa beans goes up and down from year to year. Production depends on a number of factors such as weather conditions, pests and diseases. The production has fluctuated over a ten-year period. Most cocoa beans are processed into cocoa powder before being used in the manufacture of chocolate. When the demand is higher than supply the price for cocoa beans export is high. Ghana and trade

The problem with the cocoa trade One major problem for cocoa growers is that the price they get for their crop is so low. The average income for a cocoa farmer is only about £160 a year. This is because of the way in which primary commodities such as cocoa beans are traded on the world market. Traders in Europe buy cocoa beans on the London Stock exchange. They shop around and buy the beans from whichever supplier is cheapest. It's a buyer's market. If Ghana's farmers are asking too much for their beans the buyers will shop around and buy from the Cote d'Ivoire or whoever is cheapest. The price can go up or down from day to day, depending on supply and demand. The fluctuating price makes it very difficult for farmers in Ghana to earn a fair wage for all of their work.

Fair trade The concept of fair trade has been around for more than 30 years. The Fair Trade Foundation was established in 1992 as an independent certification body that licenses the FAIRTRADE Mark to products that meet international standards that are set by Fairtrade Labelling Organisation International (FLO). The FAIRTRADE Mark guarantees a better deal for farmers and workers in developing countries so that they can enjoy a better standard of living. · The farmer receives a payment that is agreed and stable · The farmer also receives an additional payment called a Fairtrade Premium · One of the many aims of Fairtrade is to develop a long-term trading partnership with the producers

The Kuapa Kokoo co-operative of coca farmers Kuapa Kokoo is a co-operative of farmers in Ghana. The co-operative sells part of its cocoa bean crop to Divine Chocolate Ltd.in the UK who make Fairtrade chocolate products such as Divine and Dubble. The main benefits of this arrangement are: · Farmers receive an extra US$150 per tonne for their cocoa which is about 10% more than the usual price on the world market · The co-operative also receives a Premium that is then used to fund community projects · Farmers receive training to help them deal with problems such as pests or diseases that affect the cocoa crop, for example the black pod · Members of the co-operative can borrow small amounts of money from a micro-credit bank, which is known as the Kuapa Kokoo Credit Union · The farmers have elected a trusted member of the village to weight and record their cocoa beans. This makes trading more official and people more accountable · Kuapa Kokoo are shareholders in Divine Chocolate Ltd. Profits from the sale of chocolate bars are invested in projects in Ghana

Impact of economic activity on the environment: manufacturing in China e.g. microwave ovens The factories and power plants have created China's economic success are also creating a pollution problem. The burning of fossil fuels releases nitrogen dioxide (NO2) - a pollutant that combines with moisture in the air and results in acid rain. Nitrogen dioxide also causes breathing and other health problems. As the Chinese have become wealthier, car ownership has increased rapidly. Cars also emit nitrogen dioxide from their exhausts. The result is a thick smog of pollution that hangs over eastern China. this smog often reaches levels that are dangerous for human health in cities such as Beijing. research by the European Space Agency shows that emissions of nitrogen dioxide in China increased by 50% in the period from 1995 to 2005. Chinese official figures admit that 400,000 Chinese people die every year from diseases caused by air pollution. The world bank says that 16 of the 20 most polluted cities in the world are in China. Management strategies Using cleaner fuels in cars Switching from coal as source of fuel to another source Careful monitoring of rivers to check pH levels Ban certain fuel types