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foreign aid helps the U.S.
Giving, especially in the form of foreign aid, has shown to cultivate meaningful relationships among people and countries, some that lead to rewarding trading agreements amid other benefits. Recent history has particularly exhibited how foreign aid helps the U.S., which is a crucial consideration in the political dialogue surrounding the current foreign aid budget.

Foreign Aid Helps the U.S. with Trade

One valuable return the U.S. has received in its giving of foreign aid to other developing countries has been the increase in American jobs as well as trade. Foreign aid is much like an investment; it helps to forge the foundation needed for low-income countries to build up and become middle-income, sustainable states. Here are some examples:

  1. After World War II, U.S. foreign aid to Japan helped recover Japan’s infrastructure and highly contributed to the success of American companies like Microsoft.
  2. The U.S. now trades and does business with former recipients of foreign aid, such as South Korea, Brazil, Mexico, Vietnam and Thailand.
  3. The President’s Emergency Plan For AIDS Relief (PEPFAR) successfully slowed down the AIDS epidemic and countries that received such aid have, in turn, consumed more American goods. Exports rose 77 percent in Tanzania, 189 percent in Zambia and 241 percent in Ethiopia.
  4. PEPFAR is one of the strong determinants of increases in the trade of pharmaceuticals.
  5. Foreign aid has attributed $46 billion more in U.S. exports and 920,000 more jobs in the U.S.
  6. In 2011, 44.6 percent of U.S. exports went to developing countries.
  7. In Tennessee alone, more than $33 billion in goods and services were exported to foreign countries in 2014 and this trade, in turn, supports over 22 percent of jobs, 830,000 local jobs to be specific.

Foreign Aid Helps with Health

Foreign aid helps the U.S. in preventing global epidemics that could otherwise be much worse. While assisting developing countries with their challenges in health, the U.S. also does its duty to minimize any possible health issues and diseases from traveling overseas or across borders to the U.S. There has been a great number of such instances, such as:

  • The U.S. was the largest funder of a number of health workers stationed in Nigeria with the original goal of polio eradication. The workers were later reassigned and succeeded in countering the infamous Ebola epidemic.
  • The PEPFAR program has helped stop the spread of AIDS by supplying life-saving medicines to over 14 million people.

Foreign Aid Helps with National Security

One of the non-negotiable benefits the U.S. reaps from its giving of foreign aid to developing countries is an improvement in national security. To prevent a third world war, the U.S. created what is now the modern development assistance program to avoid further instability in Europe.

Stability in developing countries is key in preventing future political issues from unfolding. The U.S. has defense agreements with 131 out of the 135 countries that it provides foreign aid to.

The importance of international aid lies in economic benefits, such as trading proliferations, as much as health and national security. As evidenced above, it is clear that there is truth in the fact that foreign aid helps the U.S. just as much as it helps other nations.

– Roberto Carlos Ventura
Photo: Flickr

Infrastructure in PanamaPanama’s infrastructure is one of the best systems in Latin America. Infrastructure in Panama includes a network of roads and highways, the Panama Railroad, over 100 international and domestic airports and, of course, the Panama Canal. In 2013, the government of Panama invested an additional $13.6 billion in improvements to trade, tourism and exports, which includes further improvements to infrastructure in Panama.

Roads & Highways

Panama’s roads are in good condition around Panama City and other urban areas, but are in need of improvements in more rural areas. The Pan-American Highway, the world’s “longest motorable road,” runs through the entire country. Panama is continuing to invest in improvements to its roads and other infrastructure through its Government Strategic Plan that is set to be implemented through 2019.

Railways

Construction of the Panama Railroad first began in 1850, and in 1855 the first train traveled from the Isthmus of Panama to the Pacific Ocean. In 1907, large portions of the railroad had to be moved to make room for the construction of the Panama Canal. Today, the New Panama Railroad takes passengers and freight between the country’s Atlantic and Pacific ports.

Airports

Panama has five international airports. The largest is Tocumen International Airport in Panama City. Tocumen has flights to over 90 cities. Panama has over 100 total airports and its location between North and South America helps it serve as an important hub for connecting flights between the continents.

Panama Canal & Waterways

Construction began on the Panama Canal in 1904 and it officially opened in 1914. The canal belonged to the U.S. until 1999, when ownership was transferred to Panama. It runs 80km along one of the narrowest parts of the country and connects the Atlantic and Pacific Oceans. The Panama Canal is open 24 hours a day, 365 days a year and employs 10,000 people. Panama also has 13 ports, including 5 major ports with container service.

Due to its geography, Panama plays a large role in trade and commerce. This has led to lots of investment being poured into the country’s infrastructure both from the government of Panama as well as from foreign governments and companies. Infrastructure in Panama plays an important role in connecting people throughout the Americas with its system of highways, trains, international airports and waterways.

– Aaron Childree

Photo: Flickr

Fair Trade
Fair Trade is a global movement committed to paying fair prices in trade, impacting producers in developing countries. The concept came as a response to global poverty levels and focuses on the marketing of products and development trade. It also raises awareness of trade injustice in trade structures and advocates changes to favor equitable trade. Overall, the movement organizes producers and production and provides services to the producers.

From the 1970s to the 1980s, Fair Trade products were only sold to consumers in specified shops. In 1997, Fairtrade Labelling International was created, which expanded the movement into other countries including North America.

Fairtrade Labelling International set international standards for products in certifying production trade. When a product meets these standards, the company identifies the product with a label. Purchasing products with the Fair Trade label can improve a community. The funds from Fair Trade impact communities with social, economic and environmental development projects.

Fair Trade impacts the building of sustainable businesses by demanding fair wages and treatment. Workers can socialize with buyers while gaining a living wage. Both the employed and farmers may work efficiently with this system. More companies are investing in this movement, while it also ensures safe working conditions and prevents forced child labor.

Investing companies include Ben & Jerry’s ice cream and Rishi Tea in China. Ben & Jerry’s was the first ice cream company to join the movement. With its popularity, it set an example for many other businesses to follow. Rishi Tea is based in China and makes organic teas out of some the oldest gardens in the world. The company supports education, provides scholarship programs and builds hospitals and roads in secluded areas.

Fair Trade uses the money that may have been put toward high-priced goods to build schools instead. Since fair trade helps stabilize incomes, many families can keep their children in school. It provides supplies, scholarship programs and healthy meals. Fair Trade enables education for even the most outlying communities.

Fair Trade impacts workers, farmers and families. Farmers can receive market-based tools to prevent them from falling into poverty and may learn environmentally sustainable practices. Workers and families gain access to doctors, treatments and nutrition. These benefits enable the people to help themselves as well as others in their communities.

Fair Trade is a model for alleviating global poverty. Many companies and markets are investing, impacting developing communities. From building sustainable businesses to providing education, the movement is life-changing for those living in poor communities around the world.

Brandi Gomez

Photo: Flickr

Unilateral Trade Agreement
What is a unilateral trade agreement? It is a treaty that benefits only one state, imposed on one nation by another, that has the potential to aid developing nations’ economies.

Through the Trade Act of 1974, the United States established the Generalized System of Preferences (GSP), which instituted unilateral trade policies that benefit the world’s poorest nations. The GSP gives developing nations the opportunity to grow their economies through trade and ultimately lift themselves out of poverty.

The GSP eliminates duties on over 5,000 import products from more than 120 designated beneficiary states and territories. Out of the 122 beneficiary developing countries (BDCs), 43 are categorized as least-developed beneficiary developing countries (LDBDCs). LDBDCs reserve 1,500 of the import products in the program that receive duty-free status. These LDBDCs include Yemen, Ethiopia, Haiti, Afghanistan and Cambodia.

The GSP helps developing nations by lowering the cost of their products in the U.S., which in turn stimulates demand and helps the BDC’s economy grow. Furthermore, the GSP not only helps the U.S. accomplish its foreign policy goals but also benefits American consumers. The GSP helps keep prices low for Americans and is integral to the success of small business owners who rely on savings from duty-free products to stay competitive.

The value of imports that entered the U.S. duty-free under the GSP in 2015 totaled $17.4 billion.

While the GSP demonstrates how unilateral trade agreements can be fruitful, unilateral trade policies have downsides as well. Tariffs, for example, can be circumstantially advantageous or disadvantageous.

Initially, tariffs raise the cost of imports and make local products more competitive, boosting the economy and creating jobs. However, when tariff prices are universally high, local exports drop and soon after global trade drops — this hurts everyone. This sequence of events occurred during the Great Depression in the 1930s and, in consequence, global trade dropped 65 percent.

So: what is a unilateral trade agreement? It’s simply a treaty that only requires the action or initiative of one state. Unilateral trade policies can be tariffs, or they can be trade preference programs, such as the United States’ GSP, and can be used as a strategy to promote economic growth in developing countries.

Catherine Fredette

Photo: Flickr

10 Facts About Trade in Iraq
Present-day Iraq is located between the Persian Gulf and Iran in the Middle East. Its population of over 38 million is extremely involved in global trade, as a large portion of its GDP relies on imports and exports. Below are 10 facts about trade in Iraq.

  1. That “large portion” previously mentioned is about 50 percent–half of Iraq’s GDP comes from trade, making it the 48th largest export country in the world.
  2. Iraq is the 61st greatest importer in the world.
  3. Last year, Iraq had a positive trade balance of over 16 billion, meaning that the country exports far more than it imports.
  4. Iraq is the world’s second largest oil reserve owner.
  5. Iraq’s main exports are crude petroleum at $47.7 billion, refined petroleum at $295 million, gold at $212 million, lubricating products at $90.4 million and tropical fruits at $62.3 million.
  6. The majority of Iraq’s imports are cars at $872 million, packaged medical materials at $671 million, rice at $671 million and raw iron bars at $542 million.
  7. Iraq exports the most materials to China, India, the United States, South Korea and Italy.
  8. The largest shipments of Iraq imports come from Turkey, China, the United States, South Korea and India.
  9. Declining stability since the origin of the Islamic State of Iraq and Syria (ISIS), as well as decreased oil prices internationally, has lowered Iraq’s economic efficiency in the past few years.
  10. In 2016, the United States’ trade deficit with Iraq was $4.7 billion. This means that, in relation to Iraq, the United States imports far more than it exports, and this number is increasing.

These 10 facts about trade in Iraq show that trade is an incredibly large aspect of the country’s economy that continues to grow and holds an international presence. While its outlook in the oil market seems bright, the economic fallout from the creation of ISIS is a cause of uncertainty for the nation’s economic future.

Emily Trosclair

Photo: Flickr

10 Facts About Afghanistan Trade
Since the fall of the Taliban government in 2001, Afghanistan trade has steadily increased, with the country partnering with more countries and receiving aid from the U.S. Being a landlocked country, Afghanistan relies heavily on its neighbors for transit routes and trade agreements. The country is working to expand its trade relations and recently partnered with India to create an air freight corridor. Here are 10 facts about Afghanistan trade:

  1. In July 2016, Afghanistan became a member of the World Trade Organization, a move which provides the country with trade and transit opportunities that are simple, reliable and profitable.
  2. There has been an increase in exports in Afghanistan from $570.50 million to $571.41 million between 2015 and 2016. Imports in Afghanistan decreased from $7.729 billion to $7.7228 billion between 2015 and 2016.
  3. In 2016, Afghanistan recorded a trade deficit of $7.151 billion. The country’s trade deficit has been widening since 2006 due to reconstruction efforts.
  4. Afghanistan’s top exports are fruits, nuts, vegetable saps, gems and precious metals.
  5. The top imports are peat, raw sugar, wheat flours and petroleum gas.
  6. Currently, Afghanistan is the 93rd largest trading partner with the U.S. In 2016, the U.S. exported goods to Afghanistan totalling 913 million USD, while the total imported goods from Afghanistan was 34 million USD.
  7. In May of 2016, Afghanistan, Iraq and India signed the Chabahar port agreement. This agreement was to build a port in Iran and construct a transport corridor for trade through Afghanistan. The construction of the port was originally expected to be completed by November 2017, yet now seems unlikely due to souring relations between the U.S. and Iran.
  8. There has been a recent 27 percent decline in trade volume between Afghanistan and Pakistan. Pakistan was previously Afghanistan’s top importer, but, due to the conflict between the two countries, some trade has been blocked.
  9. On Wednesday, June 21, the Ministry of Commerce and Industries (MoCI) stated that Pakistan has been attempting to open a new illegal transit route with Afghanistan. This is an attempt to salvage the declining trade industry between the two countries. There are already more than 10 illegal trade routes between Afghanistan and Pakistan where millions of dollars worth of goods are smuggled through annually. Despite the potential for economic gain, Afghanistan only wishes to promote legal trade and transit with Pakistan, said MoCI’s head of transit department Sayed Yahya Akhlaqi.
  10. Afghanistan has recently established a new, direct air freight corridor with India, opening the opportunity for an increasing volume of trade between the two countries. This agreement is a significant advantage for Afghanistan, providing access to the Indian market, a promising one for Afghan goods according to Afghanistan’s Ambassador to India Shaida Mohammad Abdali.


There is more to know than just these 10 facts about Afghanistan trade. The country is making strides to better its trade with other nations, especially since the blockage of its previous top trade partner. According to Abdali, Afghanistan is open to anyone for connectivity and trade, even to Pakistan.

Hannah Kaiser

Photo: Flickr


Based in Ethiopia, Oliberte is the world’s first Fair Trade-certified shoe factory, making a variety of shoes for both men and women. From sneakers and boots to sandals and moccasins, Oliberte also makes bags and other accessories. It’s probably not often that you hear of a piece of fashion that is made in Africa. Canadian entrepreneur and the force behind Oliberte, Tal Dehtiar, is trying to change this perception.

In 2009, Oliberte started building trade in sub-Saharan Africa as a footwear company partnering with different factories around sub-Saharan Africa. Three years later, in 2012, it would open its own dedicated factory in Addis Ababa, Ethiopia, and the next year it was announced as the world’s first Fair Trade shoe manufacturer.

The whole premise of the brand is to support the rights of workers. The company prides itself on “empowerment, transparency, and doing right by all.” Oliberte recognized that Africa is usually met with a high amount of negative generalizations.

Believing in “trade not aid”, Oliberte’s website walks the consumer through the benefits of building trade in sub-Saharan Africa over providing aid. With many in the area experiencing poverty, providing a place of work is a huge plus instead of just providing aid.

By providing a workplace, profits made can be placed back into the company and community, creating more job growth. Eventually, more factories can open, providing jobs for more people, and allowing adults to work while children gain an education. While aid can have many positive effects, it is not sustainable and leaves people dependent.

Dehtiar says the company makes sure the employees are paid minimum wage, but also, “that as we grow as a company, they’re committed to improving their conditions, whether it’s through (initiatives such as) health insurance programs … now all the factories provide maternity leave programs to all the women.”

Gaining supplies locally from partners around Africa and creating products in their factory in Ethiopia, the brand is sure that everyone along the way has fair jobs and rights. They even attempt to buy their machinery on the continent whenever possible.

In the end, the products they sell come with a lifetime warranty. Oliberte is a brand that respects consumers, the environment and its employees.

Shannon Elder

Photo: Flickr

Obama Visit to CubaPresident Obama’s visit to Cuba this month will mark the first visit to the Caribbean island by a sitting American president in 88 years.

The trip is part of a series of efforts by Cuba and the U.S., begun in December 2014, to ease restrictions and pave the way for greater cultural and economic exchange.

After announcing his plans, President Obama drew criticism from some American politicians who believe that his administration’s Cuba policy is not sufficiently punitive, according to the New York Times. Others, however, have applauded the president, arguing his diplomacy could spur a period of progress with regard to human rights improvements and poverty alleviation.

Though Cuba’s communist government has long been censured by the international community for human rights violations, the country has made some notable achievements in the past half-century.

According to the Guardian, Cuba has had 100 percent literacy for a long time, and “its health statistics are the envy of many far richer countries.”

Devex, a media platform for the global development community, has also applauded Cuba for its success in lifting many of its poorer citizens out of poverty.

The island’s state-run economy, however, does not seem capable of solving all its problems, according to Devex. Inequality runs rampant despite decades of socialist programming.

This disparity of wealth, along with a growing older population, closed markets and limited availability of advanced technologies and quality food for farmers and other low-income people, has begun to overwhelm Cuba’s social protection programs.

Some see Obama’s visit to Cuba as an opportunity to influence President Raul Castro to make necessary changes in addressing these problems.

The New York Times Editorial Board has called on the president to push Castro to “set the stage for a political transition in which all Cubans are given a voice and a vote” as a pretext for liberalizing the economy and respecting human rights.

The editorial adds that the U.S.’s failed efforts to bring about regime change have only hurt Cuba and that more peaceful gestures geared toward self-determination would be more helpful.

Specifically, Obama could negotiate the lifting of trade embargoes as a way of easing the burden on Cuba to supply its citizens with adequate food and other resources.

The United Nations already has a development action framework for the island, which focuses on food security, energy, social services, climate change and disaster response, according to Devex.

These efforts, along with those of big players in the development community, like the World Food Program, would be significantly bolstered by the normalizing of relations between Cuba and the U.S., since freer trade would make the island less dependent on essential goods from more distant nations.

The exact program of President Obama’s visit to Cuba is still open to speculation but the topics most likely to be discussed are trade and tourism. Opening up relations with regard to these areas could be mutually beneficial to both nations.

Joe D’Amore

Sources: BNA, Devex, NY Times 1, NY Times 2, The Guardian

WTO
The World Trade Organization recently held talks to discuss the possibility of duty-free trade on information technology goods. The proposed legislation sought to extend a 17-year-old trade agreement to end all tariffs on IT products.

However, on December 12, all talks ceased and collapsed due to a deadlock between China and South Korea over liquid crystal displays, commonly referred to as LCDs. The zero-tariff agreement applied to over 200 hundred products. South Korea wanted LCD products to be included in the deal; however, China refused this measure. It seems unlikely that China will concede to the stipulations regarding the LCD screens.

The Information Technology Agreement, or ITA, intends to strengthen trade between countries in the growing sector of technology. Opening channels for trade would have benefited both countries immediately as they would no longer be penalized for trading goods.

WTO Director General Roberto Azevedo said after the talks collapsed, “The participants have significantly reduced the gaps on expanding the coverage of the ITA agreement in recent days, but unfortunately it has not been possible to finalize the negotiations this week.”

In 2015, the talks are projected to continue with the hope that they will receive a unanimous vote in agreement. The WTO is committed to multilateral trade that integrates 161 countries around the world. The ITA deal would integrate mostly developing economies with significant production of new technology.

The deal makes imported products significantly cheaper than manufacturing and selling the products in one’s own country. India’s Prime Minister, Narendra Modi did not enter into the signed deal with the United States and China to protect India’s manufacturing interests.

However, a case could be made that a deal for India would increase exports, in turn benefiting India’s economy.

India is currently number 19 on the list of leading exporters and the 12th largest exporter. The balance of trade is India’s main concern and the concern of counties who do not already have robust industries.

– Maxine Gordon

Sources: NDTV, Rediff
Photo: Business Times

poverty in palestine
For years, the conversation on Palestine and its territories has almost exclusively focused on the relationship between Palestine, Israel and Egypt. For the 1.1 million Palestinians that live in poverty as a result of high unemployment, lagging wages and harmful inflation rates, Israel’s recent military actions in the Gaza strip have hardly encapsulated the extent of Israel’s effect on Palestinians.

Official statistics from the Palestinian Central Bureau of Statistics reveal the poverty rates to be 25.8 percent in the Palestinian
Territory, 17.8 percent in the West Bank and a staggering 38.8 percent in the Gaza Strip for 2011, the last year for which statistics are available.

While these rates sound high, there’s more to the story than the statistics suggest.

In a sobering July 2013 report by the United Nations Conference on Trade and Development, it was reported that “the Palestinian Authority suffered its most serious fiscal crisis since 2006” because of less foreign aid and “Israel’s withholding of Palestinian revenue.” In 2012, Palestine’s growth was halved from the previous two years to just six percent due to structural barriers imposed by Israel and the international market.

Israeli restrictions on the movement of Palestinian goods, for example, meant less money returned to the pockets of Palestinians, severely reducing growth and worsening already high rates of poverty. Furthermore, the illegal expansion of Israeli settlements in the West Bank left Palestinians with fewer options to physically export their goods, and many were simply incapable of accessing the same productive resources because of aggressive Israeli settlement expansion.

In the Jordan Valley, Palestinian workers are forced to take longer roads and go through checkpoints. These actions imposed by Israeli officials increase costs and decrease Palestinian competitiveness in the international market, ultimately reducing employment opportunities and deepening levels of extreme poverty.

Of course, not all of Palestine’s economic woes can be ameliorated with less aggressive Israeli policies. Low labor productivity contributes to poor Palestinian economic performance and leaves less money in the coffers of government officials, who spend large portions of the government’s budget on social spending. Illegal smuggling of economic goods is also a major drain to the taxable actions of Palestinian officials.

Overall, those living in poverty in Palestine make up a significant portion of the population, which consists of about nine million citizens.

While no World Bank data exists to detail the number of individuals living on two dollars a day or less in Palestinian-controlled territories, the research conducted by the United Nations and the statistics compiled by the Palestinian government provide a distressing picture of the state of the poor in Palestine. These poor are large in number, and if international donors do not pledge aid to assist Palestinians or if Israel adopts less-aggressive economic policies in the West Bank, the number of impoverished living in Palestine will surely increase.

Joseph McAdams

Sources: UNCTAD, PCBS, Reuters
Photo: GIJN