Developing countries need trade
Developing countries need trade
Developing countries need aid as well. Developing countries need infrastructure to make their product saleable in global market. That’s why they need aid. Developing countries can attract new customer/companies/market if only they have proper standard or infrastructure.
For any country which has just started developing, merely maintaining trade relations with that country will not help the country much. Almost every country has one or the other positives; it may be minerals, agriculture, and so on. Unless some proper aid is given to them to increase their potential in that field, what can a trade relation offer?
For example consider a developing country like Iraq, which is abundant in petroleum. It is estimated that Iraq requires some 50 billion dollars to reach its maximum capacity in petroleum extraction. and we know the demand for crude oil in the rest of the world.
Now, if we develop only trade relation, and do not give any aid, what Iraq will be able to offer will only be a fraction of what it can offer? Hence, it will be able to get very less forex, and development in a proper sense will take a much longer duration. So, I believe aid is more important than trade for developing countries.
A developing country needs both trade and aid but there has to be some kind of formation. Too much aid to a country will leave that country in the same developing phase forever. But if that country competes with the world through trade, up gradation will surely occur due to constant friction with the developed world. Such activities must be innovative and smart which demands the up to date market analysis. Aid are required to some extent and proper work ethics counts.
Aid is an excellent method for transferring money from poor people in rich countries to rich people in poor countries.” This is one of the most famous quotes in the market from Bauer, the great economist. Providing aid to developing countries has more BAD to do than good. Causing corruption and all that and also remember the Dutch disease. I am not against either trading or aiding. It’s just that trading should be given a higher preference and there should be a limit to aiding both completes each other. Lack of any unit is deniable.
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