G oba interdependence

cannot produce all of the goods and services that their

1 .. Tr de flows an rad in populations desire. So they buy goods and services
from other countries, providing they have
a ern the money to pay for them. Goods and sernc:es
purchased from other countries [Link] termed imports.
D Visible and invisible trade (imports ]n contrast, goods and services sold to other countries
and exports) are called exports. Imports along vlith exports fonn
the basis of international trade (Figure 13.2) . The
Trade refers to the exchange of goods and services 1
difference between the value of a country s
for money. The origin and continumg basis of olobal
imports and exports is known as the balance of
int rdep ndence is trade. The global trading system
ad .
developed at the time of European colonial expansion.
A trade Fi cit occurs when the value of a country's
Herema colonial division of labourj emerged in which
1

imports exceeds the value of its exports. A country

LICs exported primary products, agriculture and
can make up this difference by using its savings or by
minerals, while Europe an.d North .America exported borrowing, but clearly such a situation [Link] continue
manufactured goads. This remained the gen.e ral pattern
indsfinitely. In [Link], a. positive or fa:[Link] ba:[Link]:s
of world trade until the post-Second World War period 1
of trade is known as a trade surplus. A trade surplus
when a more complex pattern of international trade
contributes to the GDP of a nation but a trade deficit
emerged. Trade is th.e most vita1l element in the growth 1

will reduce GDP.

of the global economy. World trade now accou11ts for
Visible trade involves items that have a physical
over 30 per cent of GDP - about three times its share in
existence and can actually be seen. Thus raw
1960 (Figure 13.1) .
materials (primary products) such as oil and food, and
manufactured goods (secondary products) such as cars
«) and furniture, are items of visible trade. Invi ible trad
35 2013F is trade in services! which include travel and tourism,
and business and finsncial services.
30
25 D Global patterns of and inequalities in
20
trade flows
,s figure 13 .3 indicates the growth in the value of global
10 t ade in goods (m rchandise) and services between
5 2003 and 2013 . The value of the global trade in goods
o............... increased from less than $8trillion in 200'.3 to more than
*
..p..._,,_--li1-....
$18 .Strillion in 2013 . n·a e ins ices also increased
~~~ ~~~~~~ ~~~*~~~
~ ~ ~ ~ ~~ ~ ~ ~ ~q
,vr "~ "Cl) ~ "\.;'v "-'~ ~ f> significantly from about $2 trillion in 2003 to about
~ ; Angus Macfdlson. IM~WtO, Standard Chartered ~arch i ri Business Insider, $4.7trillion in 2013. For both the starting and end years
7 November 2013, [Link]@[Link]..[Link]..[Link]~201 3
of Figure 13 .3 the value af world trade in services was
1

Figure 13.1 World exports to-GDP iratiro 9

roughly a. quarter that of global trade in goods. The

severe clip in the trade in goods in 2008-09 indicates the
Trade results from the uneven distribution of strong effect the global financial crisis had on world
resources over the Earth's surface. Even countries with trade. The dip in the trade in services was of a much
an abundance of resources and a ·w ide industria] base lower magnitude.

II 13 Global interdependence
Figure 13.2 Vancouver, Canada-mudh of Canada's trade with Asia passes through the port of Vancouver

in merchandise in 2013, with imports an.d exports

Goods totalling $4159billion. China recorded a trade surplus
of $259billion~ or 2.8 per cent of GDP. The USA was
in second place overall, with imports and exports
5 totalling $3909 billion. In contrast to China, the USA
had a trade deficit of $750billion {4.S per cent of its
----.-~~---.--~~-.--~_____,..--~----.-~~--o

2003 2005 2007 2009 2011 2,013 GDP). Germany and Japan made up the other two
Year p laces in the top four for both exports and imports.
Source: UNCTAO Overall, the top ten traders in merchandise accounted
Figure 13.3 Growth in trade of goods and seNces, 2003-13 for 52per cent of the world's total trade in 2013 . NI Cs
have increased their share of merchandise trade
Figure 13.4 indicates the most important elements considerably in recent decades. The position of China
1
in the global trade in both goods {merchandise) and as the world s largest trading country is the most
services. In terms of the former, manufactured goods obvious example of this trend, but other examples in
dominate, followed by fuels and mining products, and Table 13 .1 include South Korea, Mexico, India, Brazil,
then agriculture. Machinery and transport equipment Thailand and MaJaysie.
is by far the most important element of manufactured The trading positions of affluent countries with
goods. Figure 13.4 also shows the importance of a relatively small populations, such as the Netherlands,
travel and b transport in terms of trade in commercial :Belgium and S~tzerland is also worthy of note.
. 3

The least developed countries' share of total global

services.
Table 13.1 shows the spatial distribution of world merchandise exports [Link] only 1.1per cen(
trade in merchandise trade (visible trade) for the top compared to the 75 .Sper cent of the G20 (group o.f20
25 countries. China became the world·s biggest trader largest economies).

13.1 Trade f lows and trading patterns II

 Souroe: [Link]/englishlres_e/statis_elits2014_e/its2014_e.pdf page 1
Figure 13.4 Major components of trade ~n 1
merchand,se and services

Figure 13 .S shows the economies of individual

countries by the siz.e of their merchandise trade in 2013.
There are clear spatial patterns:
Every single country mAfrica is in the lowest class
(under $250billion). This class also includes most
countries in the Middle East, Western and central
Asia, .Latm Amertca and Eastern Europe.
Brazil and M-exico are the only countries in Latin
J\Inerlca outside of the lowest class.
The countries of South East Asia ere in the lower two
classes, along Vlith Australia and New [Link].
The major trad:ing nations (the two higher classes)
are in North AmericaJ Europe and East Asia. This
group also includes the Russian Federation, India
us,: [Link].m
and Saudi Arabia.
Souroe: [Link]/erg lishlroo_e/statis__e/rts20114_e!rts .2014_e.pdf page ·10
Figure 13.5 Wodd map showjng econo:mries by sJze
of m,erchandise trade 2013

II 13 Global inte rdepende nce

Table 13.1 Lead~ng exporters and tmiporters ~n wo~d merchand~se trade; 2013

r- ~~
- -

~~-'. : E._~P9!1~~· j~~

~-,---~ - ,~
~ -
Valµ~ ,($ ~1~: ~.~r:e:(~cil,
1 C:hln.a 2209 11 .7 1 unlted states 2329 12.3
2 Un ltoo St ates 1580 8.4 2 China 1Qfll 10.3
s Germany 1453 7.7 3 Germany i 189 6.3
4 Japan 71'5 3.8 4 Japan 833 4.4
5 Netherlands 672 3.6 5 France 68ii 3.6
s France 580 3.i 6 UK 655 3.5
7 Korear Repu1bllc of 560 3.0 7 Hong 1Kong, c nina 622 3.3
- retained Imports 141 0.7
a UK 542 .2.9
8 Netherlands 590 3.1
g Hong Kong, China 536 .2.8 g KoraS-t Republle of 516 2.7
- domGStlc exports 20 ,Q, 1
- re-ro<ports 5i 0 2.7 iO Italy 477 2.5
iO Russian Federa'tion 523 2.8 iii Canada 474 2.5
11 Italy 5"18 2.8 i2 [Link] 466 2.5

12 Belgium 469 2.5 "113 Belgium 451 2.4

i3 Canada 458 2.4 114 Mexico 391 2.1

14 SJngapore 410 2.2 15 Singapore 373 2.0

- domestic exports - retained Imports 182 1'.0
- re-exports
219·
191
1'.2
1.0 -116 Russlan Fede ration
- -
343 1.8
-

15 Mexico 380 .2.0

16 United Arab Emirates 379 2.0
-17
ilS
Spaln
Chinese Taipei
339
270
1.8
1.4
17 Saudi· Arabia, Kingdom of 378 2.0 i iQ Tunkey 252 1.3
i8 Spain 3"17 1.7 .20 Un~ted Arab 6mlrates 25'1 1.3
1

19 lndla 3"1 3 1.7 2i' Thaila nd 25'1 1.s

1

20 Ohln ese Taipei 305 1.6 22 Brazin 250 1.3

21 Australia 253 , .3 23 Australia 242 1.3

22 Srazll 24.2 , .3 24 Malaysia 206 1i

1

23 sw1tzer1and 229 1.2 25 Poland 205 1i

1
•

24 Thal land! 229 1.2 ource: World Trade Organization lnf. r--national Trade
25 Malaysia 228 1.2 Statistics 2014

The USA remains firmly in the leading position in global However, such increases are from a very lo1y base and
trade in commercial services, particularly as an exporter. the LDCs' sh are of world exports of commercial services
What might be surprising to some people is that : tot alled only 0.7per cent :in 2013.
The main trend in the global share of trade in
the UK is the S·econd largest exporter
commercial services has been the declining share of North
Japan is not as significant in the trade in services as it is
America and Europe and the increasing share of Asia.
for merchandise
Between 200'5 and 2013, Asia's exports of commercial
India is mthe top ten for both ~orts and imports. services rose from 21.7per cent to 26.2per cent. In contrast
The top ten countries in world trade in commercial Europe's share fell from 51.8per cent to 47.2per cent.
services represented half of commercial services
trade in .2013 . At the other end of the scale, the least
developed coun tries (LDCs) h ave shown p leasing
progress. Between 2000 and 2013, trade in services 1 Define a exports, b imports and c the balance of trade.
from LDCs grew on average by 14 per cent per year. 2 ~p~ai1n how trade deficits and trade surpruses can ar1se.
Examples have been : 3 What is 1he difference between ~is~b1e and inv•sibJe trade?
4 Descr~be the trend shown 1in Frgure 13.1.
Cambodia a.s the leading LDC tourist destination 5 Summads,e the information on merchandise trade presented
Ethiopia's expansion of air transportation services. in [Link] 13.1 and 13.2.

13.1 Trade f lows and trading patterns II

Table 13.2 lead~ng1·exporters and importers in world trade ~n commerdal services; 2013

"- ~~~: - ~e~ v~\:12_J$.)?.~~m_'(~ ~ fi~p.o~~~-- - - - ~ lue.,(~.~-~f~~-~ ) ~r~·t%-):l

1 Un lted States 662 14.3 1 Un lted States 432 9.8
2 UK 293 6.3 2 Chlna 329 7.5
3 Germany 286 6.2 3 Germany 3i7 7.2
4 France 236 5.1 4 Fran ce 189 4.3
5 China 205 4.4 5 UK 174 4.0
s India 1511 3.2 6 Japan 162 3.7
7 rNetneHanos 147 3.2 7 Singapore ,20 2.9
8 Japan 14-5 3.1 8 Neth erJands 127 2.9
-g Spain 145 3.1
-9 lndla i25 2.8
10 1Hong11
Kong, ChIna 133 2.9 110 Auss·lan Fooeratlon 123 2.8
11 ,~ 1and i,25 2.7 11 lr9land1 118 2.7
12 Slngap:::tre 122 2.8 12 ltaliy i07 2.4
13 1Korea., Repub'llc of 112 2.4 13 Korea, Republlc of 106 2.4
14 Italy 110 2.3 14 Canada 105 2.4
15 E3elglum 106
1
2.0 15 Belgium 98 2.2
16 Swltzerland 93 1.7 1'6 speun 92 2. 1
17 Canada 78 1.7 17 BrazII 83 1.9
18 Luxembourg 77 1.6 18 United Arab Emirates 70 1.S
19 SW9dt8fl 75 1.5 i9 Austral la 62 1.4
20 Denmark 70 1.4 20 Denmark 60 i .4
21 Russ~an 85 1.4 2i Hong Kong, China 80 1.4
Federation 57
22 Swooen 1.3
22 Austria 65 1.3 23 Thailand 55 1.3
23 Thalland 59 1.2 24 Swltzer1an d 53 , .2
24 [Link]., China 54 1.1 .25 Saud i Arabia, Kingdom 52 1.2
25 Australla 52 of
Sot.(,TCe: World Trade Organization Inter,-,ationaJ
Trade ·'tatutics 2014

Factors affecting global trade

A range of factors influence the volume] nature and
direction of global trade, including:
resource endowment
comparative advantage
locational advantage
investment
historical factors
l ;.} ru of trade
changes in the global market
trade agreements.

Resource endowment
Resource endown1ent is a signilicant factor mworld trade. Figure 13L6 The headquarters of OPEC jn Vienna
For example the Middle East countries dominate the
1

export of oil. Along 'With a few other countries elsewhere in OPEC is an intergovernmental organisation comprising
the world, such as Venezuela and Nigerta., they form OPEC 12 oil~producingnations. It .,~tas [Link] 1960 after a
{Figure 13.6) , the Organization of Petroleum Exporting US law imposed quotas on Venezuelan and Persian Gulf
Countries. oil imports in favour of the Canadian and Mexican oil

II 13 Global inte rdepende nce

industries. OPEC;s stated objective is to co-ordinate and
1
Comparative advantage
unify the petroleum policies of member countries and The concept of co p rativ dvanta ~ is an important
ensure the stabilisation of oil markets in order to secure part of classical theory on international trade. This states
an efficient, ~[Link] and regular supply of petroleum to that different countries will sp9cialis~ in producmg tbas~
consumers, a steady income to producers and a fair return goods and services for which each is best endo;.ved. [Link]
on capital to those investing in the petroleum industrym. country will [Link] a proportion of these goods and
Th-e OPEC countries account for a [Link] proportion of services with other nations to obtain goods a:nd services
world crude oil reserves. OPEC has been heavily criticised that it needs but for which it is not favourably endowed.
at times for the allegedly political nature of some of its The concept is very easy to understand with regard to raw
decisions. This has generally happened when the oil-rich materials, but it also applies to manufactured goods and
Arab countries have wanted. to put pressure on the USA services. It is saying that even in the complexity of the
and other Western countries Vlith regard to the Israel- modem global economy, countries tend to concentrate
Palestine issue. on the goods and services they are best at producing. This
Countries endowed Vlith other raw materials such results in specialisation in :production [Link] employment.
as food :products~ timb~~ min~rals and fish also figure The evidenc:s of this is that some countries heve a global
prominently in world trade statistics (Figure 13.7). reputation for particular products. Examples include
In HICs the wealth of countries such as Canada and German cars, J~rpanese high-tech products, Scotch whisky,
'
Australia has been built to a considerable extent on the Belgian chocolate and Swiss watches.
export of raw materials in demand on the world market.
MICs and LICs [Link] raw materials such as Brazil and
1
Locational advantage
South Africa, have been trying to follow a similar path.
The location of market demand influences trade
In both cases, wealth from raw mate:nals has been used patterns. It is advantageous for an exporting country
for economic diversification to produce a more broadly
to be close to the markets for its products as this
based economy.
reduces transport costs, along with other advantages
gained from spatial proximity. For 2xample, the tourist
1ndustry in France benefits from the large populations of
neighbouring countries that can reach France relatively
quickly and cheaply. Likewise, manufacturing industry
in Canada benefits from the proximity of the huge
American market.
Some countries and cities are strategically located
along important trade routes, giving them significant
advantages m. international trade. For example, Singapore,
at the southern tip of the Malay peninsula is situated at
1

a strategic location along the main trade route between

thE? Inclia.n [Link] Pacific Oceans. Similarly; Rotterdam in
the Netherlands is located :n ear the mouth of the River
Rhine. Many goods brought in by large ocean carriers are
trans-ship:ped onto smaller river vessels and other modes
of transport at Rotterdam, or refined or manufactured in
various ways in the port's industrial area.

Investment
Investment in a. country is the key to it increasmg its
trade. Some MlCs such as Brazil and South Africa have
increased their trade substantially. These countries have
attracted the bulk of IDI. Su ch low-income cglobalisers'
as Chma, Brazill India and Mexico have increased their
trad.e~to~GDP ratios significantly. On the other handl,
hundreds of millions of people live in countries that have
become less rather than more [Link] (in an economic
sense) as trade has fallen in relation to uational :income.
Howeve~ in the poorest LICs businesses frequently operate
Figure 13.7 Rubber production provides an important source of in investment climates that undermine their incentive to
foreign ou1rrency to V~etnam invest and grow. Economic, social and poUtical instability

13.1 Trade flows and trading patterns Ill

deters investment by making future benefits more brought them only very limited benefits at the expense of
uncertain or undennining the value of [Link] distortion of their economies. The historical legacy of this
studies show that the greater the level of [Link], the r d _ p ndency is one of the reasons why, according to
lower the rate of private investment and growth. Crime development economists, poorer [Link] countries have
and corruption represent a [Link] risk. to investment such a limited. share of world trade.
and increase the cost of doing bu.s iness in. countries where
this is a substantial problem. The terms of trade
Historical factors The most vital e lement in the trade of any country is
the terms on which it takes place. If countries rely on
Historical relationships, often based on colonial ties 1
the export of commodities that are low in price, and
remain an important factor in global trade patterns. For
example, the UK still maintains significant traclli1g links need to import items that are relatively high in price,
they need to export in large quantities to be able to
[Link] Commonwealth [Link] because of the tramng
relationships established at a time when these countries afford a relatively low volume of imports. Many poor
nations are primary-product depend _nt, which means
were colonies. Such links ar9 \\reakerthan th9y once
they rely on one or a small number of primary products
were, but [Link] cases they remain significant (Figure
to obtain foreign currency through export. Al though
13.8). Other European countries such as France, Spain,
in the early years of this century· so1ne commodity
the N·e therlands, Portugal and Belgium also established
prices rose significantly, over the long term the world
colonial networks overseas and have maintained such ties
market price of prima1y products has been generally
to varying degrees in th.e post-colonial period.
]ow compared with that for manufactured goods and
Colonial expansion heralded a trading relationship
dictated by the European countties mainly for their
services. Also, the price of primazy products is subject
to considerable variation from year to year~ making
own benefit. The colonies played a subordinate role that
economic and social plannmg extremely difficult. In
contrast~ the manufacturing and service exports of HICs
generally ris~ in pricE? at a. :reasonably predictable rat e~
resulting in a more regular income and less uncertainty
for the rich countries of the world. The tenns of trade
for many LICs are worse now than they were 1!:wo
decades ago. Thus it is not surprising that so ·m any
nations are struggling to get out of poverty. Because
the terms of trade are generaUy disadvantageous to the
poor countlies of the world, many LICs have very high
trade deficits.
However, it is not just poor countries that suffer because
of the terms of [Link]. In December 2014, the Australian
treasurer stat 9d that Australia wes in the grip of the
biggest fall in the terms of trade since records began in
1959 because of a drastic faH in commodity prices.
Conventional :neo-liberal economists generally welcome
the large transfers of capital linked to high trade deficits.
They say that trade deficits [Link] strongly related to stages
of economic development. The argument is that capital
inflows swell the available pool of investment funds
and thus generate future growth in the South. However,
Marxist and populist \Vrlters argue that:
• if the expansion of trad9 volumes brings benefits to
MICs [Link] LICsJ the acc:[Link] expansion of trade
deficits may bring considerable problems
• trade deficits have to be financed - one way is t o
borrow m ore money from abroad but this will increase
1

a country's debt: another is to divert investment

away from important area.s of the economy such as
agriculture, industry, education and health
Figure 13.8 IUoyds of London- insurance is a vital factor i1n ·the m
in tltis way, high trade deficits the South constrain
movement of world trade growth and produce a high level of dependency:

II 13 Global interdepende nce

e Changes in the global market
The rapid growth ofNICs (MICs) has brought [Link]
China alone holding 30per cent. It is not so long ago that
the USA ,vas the world's biggest creditor. Today, it is by far
major changes in the economic strength of countries . .An the world's biggest debtor. Much of the monev., borrowed
[Link] in th9 Sunday Telegraph entitl9d 'D~velopmg nations by the USA end other Western economies has come from.
emerge from shadows as sun sets on the West' charted the the reserves built up in. emerging markets. The West no
financial problems that beset the West in the first decade longer dolillllates the world's savings and as a result no
of the new millenniumJ culminating [Link] the impact longer dominates global investment and finance.
of the global recession 2008-10. 'The West' is the term At the time of writing (mid-2015}, the global economy
that many financial writers use to describe the mature seems to be at a [Link] a considerable rebound
economies of the USA Canada, the EU~ Japan Australia following the global financial crisis, global economic
and New Zealand. growth fell every year between 2010 and 2013 (from
The [Link] highlighted the poor decisions made by [Link] cent to 3.3per cent). For example, all four'BRTC
Western policy-makers, contrasting this [Link] the powerful countries saw growth rates faU shaxply. However, itis likely
economic growth figures of the BRIC nations (Brazil, that emerging markets and developing economies will
Russia, India and China.). Th9se four countries, along ·w ith continue to grow faster than ths mar~-mature economies.
other high-growth :nations outside of the established core In a recent article published by the BBC. Duncan
group of nations, are known as emerging n1arkeU: . Weldon Newsnight economics correspondent stated
1 1

While the developed world (the core of the world 'We may be living through a structural change in
economy) grew by an average of 2.1 per cent a year in the global economy as big as any since World War II
the first decade of the twenty-first century; the emerging without fully realising it. The world economy may be
markets expanded by 4.2per cent. Figure 13 .9 shows becoming less integrated1 with one of the important
the significant differences in economic growth of the drtvers of globalisation (trade} swinging into reverse.'
advanced economies (the core) and the emerging-market The article noted that since the global financi a] crtsis,
economies in recent decades. world [Link] has been sluggish and outpaced by GDP.
Thus, in very recent years] trade as a sha_re of global
600 GDP has been falling!
= SOO,
""C
-C

400
[Link] economi~
[Link] China. Bl'azil and Indi'a Trade agreements
A trade bloc is a group of countries that share trade
300
agreements between each other. Since the Second
World War, there have·been many examples of groups
of countries joining together to stimulate trade benveen
Year
themselves and to obtain other benefits from economic
'IIJ Jn dexes ar& set to 100 In the base period cooperation (Figure 13.10). The followmg forms of
increa..sing economic integration between countries can be
Figure 13.9 Line graph showing evoluti1on of GDR by group~ recognised:
1Q60-2010
• Free trade areas - m.e mbers abolish tariffs and quotas
In 1990, the HICs controlled about 64 per cent of on trade between themselves but maintain independent
the global economy as measured by gross domestic restrictions on imports fro1n non-member counuies.
product Tiris fell to 52per cent by 2009 -one of the NAFTAis an example of a free trade area.
most rapid economic changes in historyt Most of this • Customs unions - a closer form of economic
global shift occurred in the last decade of that periodL integration. Besides free trade betw·e en member nations,
Such a huge global economic change has had major all members are obliged to operate a common external
political consequences, with the emerging economies tariff on imports from non-member countries. Mercosur,
exerting much more power than they had previously in established on 1 January 1995, is a customs union
mtematianal negotiations. joining Brazil, Paraguay; Uruguay end Argentina in a
Many major investors are turning their backs, at single market of over 200million people.
least partially on Western nations and seeking out • Common markets - customs unions that in a:ddition
1 '
opportunities in the faster-grow:ing emerging markets. to free trade in goods and services, also allow the free
There have been major changes in the distnbution of movement of labour and capital.
the world]s foreign exchange reserves. The G7 countries • Economic unions - organisations that have all the
(USA, Canada, Japan, Germany1 UK, France and Italy) held characteristics of a common market but also require
only 17per cent of the global total between them in 2010. members to adopt common economic policies on
Japan is the only significant creditor nation in this group. su eh matters as agriculture, transport indus tzy
In contrast, the BRICs held 42per cent in 2010, \Vith and regional policy. The EU is an example of an

13.1 Trade f lows and trading patterns II

 • EU Mercosur • EFTA
EU expansto·n Andean Commuinii1¥ CAFTA
MAFrA ASEAN II Ca,rkom

Figure 13.10 World trade b1ocs

economic union, [Link] must be remembered

that its present high level of economic integration ·w as
achieved in several stages. When Denmark~ Ire1and
and the UK joined in 1973 , the organisation could best
be desclibed as a common market. The mcreasing
level of integration has been marked by changes in
the name of the organisation. Initially known as the
European Economic Community it later becaime the
1

European Community and ftna:.lly, from November

1993, the European Union. Some nations in the EU
have been more in favour of greater integration than
others. Figure 13.11 sh ows that one of the most recent
members Romania, is very enthusiastic about a high
1

level of integration.
Regional trade agreements have proliferated in the
last two decades. In 1990, there were fewer than 2S;
by 1998, there were more than 90. The most notable of
these are the European Union, NAFTA in North Americe,
ASEAN in Asia: and Mercosur in latin America. The
United Netions (UN) (1990) refer to such organisations
1
as geographically discriminatory trading arrangements' .
N·e arly all of the World Trade Organization (\VTO) 's
members belong to at least one regional pact. All such
arrange1nents have one unifying ch.a racteristic: the
preferential terms that trade participants enjoy over
non~participatin.g countries. Although no regional group
has as yet adopted rules contrazy to those of the WTO, Figure, 13.11 Street banner i1n Bucharest, Rom,anja -
there are some concerns: 'The answer is m1ore Europe,

II 13 Global interdepende nce

 Regional agreements can divert trade, inducing a products; its members include J\rgentma Brazil,
country to import from a .member of its trading bloc Canada~New Zealand, Australia, the Philippines and
rather than from a cheaper supplier elsewhere. South Africa.
Regional groups might raise barriers against each othe~
Figure 1'.3.12 details trade agreements between the EU
creating protectianist bloclcs.
and New Zealand, and the EU and the ACP.
Regional trade rules may complicate the establishment
of new global regulations.
Trade and development
There is a growing consensus that international
There is a strong relationship between trade and
regionalism is on the ascendency. The EU NAFTA and 1
economic development. In general, countries that have
ASEAN+ (associated agreements with other countries)
a high level of trade are rtcher than those \Vith lower
t1i a.d of regional trading arrangements dominates the
levels of trade. Countries that can produce goods [Link]
world econ omi accounting for 67 per cent of aU world
services in demand elsewhere in the world will benefit
trade. 'Whether the regional trade agreement trend causes
the process of world trade [Link]:tion to falter in the
from strong inflows of foreign currency and from the
ernploym2n t their industries provide. Foreign currency
future remains to be seen.
allows a country to purchase from abroad goods and
Apart from trade blocs] there are a number of looser
services it eith er does not produce itself or does not
trade groupings arming t o foster the mutual interests of
produce in large enough quantities.
member countries. These include:
An Oxfam report published in April 2002 stated that
the Asia-Pacific Economic Co-operation forum if Africa increased its share of world trade by Just 1 per
(APEC) - its 21 members border the [Link] Ocean and cent, it would .e arn an additional £49billion a year - five
include Canada, the USA, [Link] Chile, Japan, China
1 times the amount it receives in aid. The World Bank
and Australia; the member countrtes have pledged to has acknowledged that the benefits of globalisation are
facilit ate free trade barely b eing passed on to Sub-Saharan Africa and may
the Cairns Group of agricultural exporting nations - actually have accentuated many of its problems.
formed in 1986 to lobby for freer trade in agricultural

EU and New Zealand bilateral trade agreement In agrlcult ural

"prod ucts

Background ( Agreement
Before the uKJotnedi the EU in 1973. New Zeal'and had a, special trade lrnlUa!llry the EU imposed a common extemal tl:rlff of 20 per cent on
relationship with the u I<: 9o per cent of New Zeal an di's n,, eat and dairy New Zeal'and Imports. This wa-s later reduced to 10 per cent am!then
prodiucts were exported to the 'UK. Special trading arrang·ements were to Oper cent w~th a vo'luntary llmlt on the volume of New Zealand
negotiate-d betvJeen ·the EU and New Zea'land to secure the latter's main exiports.
export market Al~hough New Zealand's ma,Jor export markets harve The Urug1uay round of Vi/TO negotlatlons ,In the 1990s changed
Increasing!,~ shifted to Asia and the Pacrflc rim. the EU remarlns New Zealand's this arrangement and Introduced fa·rlff Rate Quotas (TRQs). New
secondl largest tradJng partrn~r (for shee,pmeat, dairy produce and wlTie). The Zeal'and's 'lamb expor--ts to the EU were [Link] a tarlff..free qJJota
UK ,remains New ZeaJand#s most l,mportar1t tradlrng pan:nE!!r Winthln ttie E.U. of 227 OOO tonnes/year. Any Imports exc:eedlrng the quotil attracted a
12.8 per eent tariff.
New Zealand has, none the ~ss. comptarned that trade in ,lamb Is
unfair. Whereas New Zearand' sheep farmers recel,ve no ·government
subs:ld les. EU fa rmers can lower th el r ,pr Ices because- they get a ewe
subsT<Jy of €2, per head.
EU an d b llateral trade agreement w it h ACP banana growers
~

Background I Agreement
[Link] Is a long-running,dispute between the EU, ACP banana growers, Latin r~e 2000,CotonoiJ trade [Link] between the EU and ACP
American banana .grrowers and th,e WTO. ,provided a 775 OOO tor,ne tarlff•.free quota for ACP bananas. At the
The UK and France have close po'lltlcal, historic and economic ties with many same tlme Latin American producers faced a €23Monne tariff for
[Link] In Africa. tbe Caribbean and the Paclllc (ACP} wnrch depend ~elr ba1nam~ exports to ~he :EU.
h~avlly on banana exports. The- spe,cla,I' trad'~ ag1reernents oond,ud~d betvi.r€1en In 20-07 WTO ruled tl,at tht!i agreement violated gl'oba l [Link] rulis,
the UK, France and the [Link] ba nana growers Mre adopted by the EU. ·gM_ng1an unfair ad~antag:e to ACP .growers. Althougn the taliff fur
Meanwh rle. other banana, exporters;. [Link] lin Latin America (e.·g,. Latin Amerfcari bamrnas was reduce [Link] €175/tonne the W'fO [Link]
Ecuador, Nicaragua, Mexlco) complained that t hese arrangements were that the revised trade arrangements remain unacceptable. By the end
unfair. They argued that they should have the same access to the EU ma,ket of 200B the dispute was st111 umesoitv-ed.
as ACP grmvers. However, growing, condl·tfons In Latin America are mom
fuvourab1e, the scale of production rs much greater (wrlth large piantatlons
owned by US TNCs) and therefore costs are low. Free tfade wourld mean that
1

ACP growers co uId not compete and that most wo u,ld go out of buslin ess.
Source: OCR f:,/2 Geography by M. Raw (Philip Allan Updates/ 2009), p.196·
Figure 13.12 Examples of EU trade agreem:ents

13.1 Trade f lows and trading patterns II

 Although agreements have been difficult to broker at
times the overall success of GATTtvrrO is undeniable:
1

1 ~plain the ~mportance of resource endowm,ent as a factor today, average t ariffs [Link] only a tenth of what [Link] were
i1n world trade. when GATI came into force and world trade h a.s been
2 What do you understand by the concept of comparative, increasing at a. much faster rate than GDP. HoV:eVE!r , in
advantage? some areas protectionism is still an issue, particularly
3 How have a ~[Link] advan1age and b h~to:rical iacto:rs in the sectors of clothing textiles and agriculture. In
1

influenced global trade patterns? principle] every nation has an equal vote in the WTO.
4 Define terms of trade·. In practice~the rich world shuts out the poor ,vorld
5 Why have trade agreements increased s,gniifi:cant1y in recent from key negotiations. In recent years j agreemen~s
decades? have becom e more and more difficult to reach , with
G Briefly examine tl1e Dnk bet\tveen trade and developm,ent. some economists forecas·ting the stagnation or even the
break-up of the VJTO.
D The World Trade Organization
The World Trade Organization deals with the rules of Trade ar : Steel
world trade. Its primazy function is to ensure that trade
Fout· n1onths after the \VIO launched a new roun d of global
flows as freely as possible.
trade taJks in Doha, the USA hnposed taliffs of up ·r o 30%
In 1947 a group of 23 nations agreed to reduce
1
on steel imports to protect its qwn fragHe steel industry.
tariffs on each other's exports under the Genera] More th an 30 US steel p roducers ,vent bankrupt between.
Agreement on Tariffs and Trade (GATT). Thi~ was. the 1'997 and 2002. Those that n.~111ained wer, cnn id t!re d to
first m ulti1ateral accord to lower trade bamers since b inefficient a nd high oo· t compar d with mo it of th,e ir
Napoleonic times. Since the GATT was established, for i n counterpart . Mana t:n1ent consultants ha·ve largely
there h ave been nine irounds' of global trade t alks, of put this down t,o th su l'l d, of the sted un i,o ns and thei r
which th e most recent, the Doha (Qatar) roundl began dcou u,ds fo r h igh wagl:~ and hrndth insurance. The crux of
in 2001 . A total of over 140 member countries have the probJen1 is that wod d steelmakin,g capadty, esthnated at
been represented at the talks in Doha. The Doha round
between 900 n1llUon a nd 1000 mjUion tonnes, is 20% higher
was still in progress in 2015 . Its work programme
tha n cw·re nt den1a.n dl. Although r estructu ru:tg has alre?Jdy
covers 20 areas of trade. This round of negotiation is
occurred, n1ore is bound to happen both m the USA and in
al so known as the Doha Develop1nent Agenda, as a
other parts of the wodd
major objective is to improve the trading prospects of
The reaction of An1el'ic a~s trading partne rs [Link] not
LI Cs.
difficult to p redict. Trade unionists w arn ~d that the 11fW
The most important recent development has been trade arricrs could re u)t in 5000 jro b Jo ses in the K
the creation of the World Trade Organization (WTO) in and t OOO in d c ~s I whofo. Th c, uurit: · affc.:!-ct d
1995. Unlike its predecessor; the loosely organised. by the new tariffs argue d that thc USA ,va in b:r ach of
GATT, the WTO was set up as a permanent organisation \VfO ruJes. They also announ ced lhat they \vou]d clen1and
urith. far gre ater powers to arbitrate trade disputes.
con1pensa tion from the USA fo r the effect of the tariffs.
Figure 13.13 shows the benefits of the global trading
H owevet\ as h couJd take up co t [Link] years for the WTO to
syst em according to the WTO.
reach a judgen1et1t, sigru fic ant d a n1age cou ld be don e in the
intet"Vening period to the steeJ industries o f those nations
affected. To its credit the EU stated that any retal iatory
l Th e system helps pron1ote peace.
action wou]d be Vlithin WTO rules. Overan this dispute
7 Di "pUt~s ru:e han dled con truc:tiv~ly.
was tht: last thing that the glo bal ~ted industry, worth a n
Rul~~ make lU easit::r fo,r aU.
stiinatt!d i -oo illion, want~d .
Frut:r uad~ cu the oo t of Hvin .
lt provid , mo~ chokt! of products and quaBti "'s. Figure 13.14 lirade war in the WfO
6 Trade· raise·· incomes.
1 Trade stin1ubtte.s econ,on1.1c- growth.
Relations b etween the USA and th.e EU were soured
Th e bask pr-ku:-ipJes tnake Jife inore efftdent.
in the eelrly 2000s by the SOeCalied 'bel:nana. WaI and by 1
,
Gove-rntnents are sh ielded fron1 lobbyin g.
disagreements over hormon e -tre ated bee{ GM fo ods and
u The syste.n1 encourages good govem n1ent.
steel (Figure 13.14) . Leading agri~ltural exporte~s sue~
as the USA, Australia and Argentina want a con siderable
Source: WTO
redu ction in baniers to trade for agricultural products.
Figure 13-.13 lihe ten benefits of the WTO tradi1ng system Although t he EU is committed in plinciple to reducing

II 13 Global interd epend e nce

agricultural support, it wants to move slowly, arguing Crttics of th e WTO al so ask why it is t hat HI Cs
that farming merits special treatment b ecause it is a have been given decades to adjust their economies
'multifunctional activity, that fulfils important social t o imports of textiles and agricultural products from.
and environmental roles. Many MI Cs and LICs have LICs, when the latter [Link] pressurised to open. their
criticised th.e WTO for being too heavily influenced by borders imm·e diately to banks, telecommunications
the interest s of the USA and the EU. companies and other components of the service
The WTO exists to promote free trade. Most sector in HI Cs. The removal of tariffs can have a
countries in the world are members and most of those significant imp act on a nation ls domestic industries.
countries that are not currently members want to For example, India has been very concerned about
join. The fundamental issue is : does free trade benefit the impact of opening its markets to foreign imports
all those concerned, or is it a. subtle ·way in which (Figure 13 .16).
the rich nations exploit their poorer counterparts?
Most critics of free trade accept that it does generate
wealth but they deny that all countries benefit from Sinco India 'Was forced by a \VTO ruling co accek.·nu th
it. The non-governmental organisation (NGO) Oxfam opening up of its markets, food .i mports have quadrupled.
is a major critic of the way the present trading system Large voJutnes of ch eapt sub.s1dised iilnports have flooded
operates. Figure 13.15 shows the main goals of its in front: countries such a~ the U A MaJ aysia and Thaiiand.
~Make Trade Fair' campaign. Tbe adverse [Link] l1as been considerable and includes the
Supporters of the W TO say that it is scarcely following:
credible to argue that the :poverty of poor countries Prices and ru raJ jncotne.s have fallen sharply. The pt ke
is the result of globalisation since they are all paid for co-conuts has dropped 80 per cent, fo:r coffee
outside the mainstream of free trade and economic 60 per cent ~and pepper 45 per cent.
globalisation. Crttics of the WT0 on the other Forci n hnport , mainJy ,ul idi ccl oya fron, the
1

hand, say that the WTO and other international A and paln1 o U ft-on1 1'1lalay ia1 have un~rc\U ~ocaJ
organis [Link] should b e paying ·more attention to the produc,c rs and have v i:rtuaUy wiped out the production
needs of these countries, ma.k ing it easier for them to of edi bk~ oi].
become more involved in, and gain tangible benefits
from the global economic system . Figure 1 3.1 6 lnd1a - the mmpact oi the removar of agricuJtural t ariffs
1

The new emph [Link] on exports~in order for mdia

to compete in the world market is also threatening
1

End the use of conditions att~ched to IMF-Wodd Bank rural livelihoods. For example, in Andhra Pra desh,
pirogranunes '-Vhich force poor [Link] to open th ejr India, funding from the World. Bank and the ·u K will
n1arkets re aridlei5 of th impact. encourage farm conso}idationJ mechanisation and
"'- hnpr, e n1a:rke;t ace ·s for po r countri and i:mtd th modernisation . In this region, it is expected that the
cyd o f subsidised ag:rku ln..H·al overproduction and proportion of people living on th e land will fall from
ex-port dun1ping by rich countries. 70 per c9nt to 40 per cent by 2020.
Change '\"([Link] rules so d1at developing countries can Farmers, trade unionists and many others are against
protect [Link] food production. these trends, or at least the speed at which they are
1 Create a n ew internationaJ crnnnJodities instjtution to
taking place. They are calling for the reintroduction of
pron:1ote [Link] and end oversuppJy in o rder to import controls, thus challenging the basic principle
raise prices for producers and g tve thetn a t-easona ble of the globalisation process - the lowering of trade
rt and ard of living. baniers.
Chang ;, corponite practice~ so that compan i ~ pay fair Opposition to the VITO comes from a n umber of
•
pnc~ . sources :
6 a~ ta hli h n:-·w inteUc tua l prop rty ru] to ensur _, that
poor countries an; abl to afford new technoio,g i<.:s and many LICs and MICs who feel that their concerns are
1

bask n1C--diidncs. largely ignored

1 Prohibit rules that force govemn1et1ts to UberaBse environmental groups concerned] for example, about
or privatise basic servi.c es that are vital for poverty a "\A/TO ruling that failed to protect dolphins fro1n
reduction. tuna nets
8 Detnoctatise the WTO to give poor counujes a • labour union s in some HlCs, notably the USA 1

stronger voice. concerned about a the threat to their members' jobs as

traditional manufacturing filters down to MICs and LICs
r1 Campa~n
Figure 13.15 Oxfam 's •Make Trade Fai1 and b violation of 'worl{ers' rights' in MICs and LICs.

13.1 Trade f lows and trading patterns II

 Tea~ lliike coffee, bananas and other raw mater~als~exemptifies by process~11g and padl<lng1the tea they grow. Th~s js ma~nly
~he rerattvely smaU prqportion of the ·fi1
naJI price of the product because ~hey wou~d have to compete w~th very powerlul
~hat goes to producers. The great majonity ai the money brands, and they would find irt very dirfficuh to ach~eve the
generated by the tea ~ndusby groes to 1he post~raw material
9
economies of scale of the gfobal tea companies.
stages (processing dl~stnbut~ng and retai'ling} usuaJllly benefitiing
1 1

companies in Hl,C s rather than the producers jn U Cs.

A report by the Dutdh Tea 1
attentton to:
lnstitute in .2006 direw part~cu~ar Labour costs of
cuhivation and pic:ki,ng 3o/o I ...
Other ,plantation costs 4%
f b lk tea
Auction o· , u
n1
1 70

• the prob!ems of famng1prices and nsing input costs / / Exporters' costs 6%

• the consequent pressure to Umlt Jabour costs of tea
productk>n wo~kers
• the urgent need for 1
improvem,ent of ~abour, socraJ'1 eodJogjcai
and econom[c conditions throughout the·tea sector ~n the UCs.
The g!oba~ 1·e a markei 1is dominated by a smaUnumber of Supermarket
companies incJud~ng1Un~[Link] and Sara Lee. About haJf of aU r:etailing
Marketing,
the tea produced ~s traded 1nternatronaUy. Annuall export sales 50%
bagging ,
of tea in its raw ma1erial state are worth atmost $3bimon. distribution
The retail va.~ue ·of the global tea bus~ness is of course 1
much 36o/o
higher. lhe large tea companire s wirefd i1mmense power over
the industry. As many countri,es now produce tea, they have to
compete whh eadh other jn an jncreasingty oompetiitNe 1 market.
G1oball s·up;p!ly is r~sl1ng1at a faster rate than consumiptiont
keeping prices low. Figure 13.17 Tea value chain
Tea producers comp!a~n 1hat the global trad~ng system1
prevents them from moving up the vaJlue chain (Figure 13.17)

D The nature and role of Fairtrade

Many supermarkets and oth er large stores in HICs now
stock some 'fairly tradedJ products. Most are agricultural
products such as bananas orange juice nuts, coffee
and tea {Figure 13 .18) but the market in non-food goods
such as textiles and handicrafts is also increasing. The
N
OF PICCADILLY "
F irtrade system operates as follows:
Small-scale producers group together to form e
cooperative or other democratically run association
with high·social and environmental standards.
These cooperatives deal directly with companies
I
(cutting out middlemen) such as large [Link]
in HICs.
HIC companies {through their customers) pay
significantly over the world market price for the
products traded. The price difference can be as
large as 100per cent. This might mean, for example 7
Figure 13.1B Farrtrade tea
supermarket customers paying a few pence more for
a kilo of b a.n anas.
The higher price achieved by the L]C cooperatives farmers . It is now a global market worth £[Link] a
provides both a better standard of living (often saving year involving over 400 IBC companies and an estimated
1

producers from bankruptcy and absolute poverty) and 500 OOO small farmers and their families in the world!s
some money to reinvest in the farms of producers. poorest countries. Food sales are growing by more than
Advocates oftlle [Link] system argue that it is a 25per cent a year, with Switzerland and the UK being the
model of how world trade can and should be organised. largest markets. Figure 13.19 compares the prices received
to tackle global poveey. This system of trade began in by plantation workers under normar trading conditions
the 1960s with Dutch consumers supporting Nicaraguan \Vith those received by workers in a Fairtrade scheme.

1111 13 Global interdepende nce

 In 1993 a group of f,armers in Gha1na formed a coopera11ive to
seU their own coc,oa1. It wa,s sup1port,ed by SN\/, .a Dutch NGO,
and the UK Department for lnternat~onal Dev,eJopm,ent. The
cooperative ensures fanmers are paJd for what they produce and
are no1 chea1ed by m1 iddlemen. tt 1ndudes:
1
• Kuapa· Kokoo Farmers' Union. Thi·s ~s a na1
1~onal body made
up of 45 OOO cocoa farimers who elect representat ives.
• [Link] Kokoo Farmers' Trust. Th~s ~s responsiibie ior
[Link]~buting money for communrty prqects, generated from
the Fa1irtrade Premium. Projects indude provJding1dean wat,e r
supp1i1es and mobile health d~nics. bui1lding schoo~s a1nd
~mprovin g san~tat1 ion.
In 2008 Kuapa Kokoo sold! 4250 tonnes of c,oc,oa to the fairtrade
1

market Th~s means that the farmers receive a [Link] price.

Foir exarmiple~ even if the world price o,f cocoa fa Us ·to US'$1 OOO
1

per tonne, the [Link] price [Link] at US$1600 per tonne.

The minimum1Fatrtrade price is $1600- if the world price goes
Kuapa Kokoo farmers spread cocoa boons out 1o dry
h~ghe.r far1mers w~H 1r,eceive 1!]he· higher pr~ce~ pius the sodal pre-
m1~um of $1 50 per tonne~ and these pr~ces have been r,evi,ewed chocoiate is sold ln t he UK. the Netheda11ds, Scandinav~a and
and wi Ube i ncrea S:ed. the USA.
In 1998 Kuapa Kokoo came together w~t h the NGO Twin, Uke aH food production., fair trade wrn only work as a so1ution i~ it
supported by The Bod(Y Shop, (hdstian Aid and Comic Relief, ~s sustainiab1e jn the long term. Income,, and therefore food secu&
to found the Div~ne· Choco,late company. As Kuapa Kokoo ~s rny, depends on mainta~ning soil heailrli and water supply through
part owner of D~vine 1it not only gets a fa,rr price for its cocoa good ag1nculitura~ management. In Afokar. a continent riv,en by
but a,so has an influence on how 1he organisatJon 1s run a1nd wa1r. confltc1 and ,corrupt~on, poUt~ca~ stabili1ty ~s ,equaHy ~mportant.
a share in the profits it has helped 10 create. Di\nne Fa~rtrade Fa~ rtrade can contr~bute to thj s..stabi,ilrty by redudn g poverty.

Figure 13.19 Kuapa Kokoo :Fajrtrade Cooperative

country's external debt - both debt outstanding and

debt service - affects a cou:n tryls creditworthiness and
1 Examine the role of the Wornld Trade Organi12:ation.
thus its overall economic vulnerability.
2 V\fny has tl.e WTO been so heaViUy oriti:oised? Many poor countries are currently paying back
3 Describe and exp~~n the nature and ro1·e of Fah1rade. large amounts in debt repayments to banks, lending
4 Comiment on the tea va~e chan presented in Fjgure 13.17. agencies and governments in HICs while at the same
tim~ struggling ta provide basic services for thsir
populations. Sometimes an ever increasing proportion
of new debt is used to service interest payments
1 International de t and on old debts. The dPbt servic ratio of many poor
countries is at a very high level compared to their
interna ional aid ability to pay. The debt service ratio is the proportion
of a country's export earnings that it needs to use
Debt: causes, nature and problems to meet its debt repayments. Some countries need
Experts from a variety of [Link] blame the rules to put aside .20- 30 per cent of their export earnings
of the global economic system for excluding many to meet their debt repayments . A [Link] number of
countries fromits potential [Link]. Many single countries have a debt service ratio of between 10 [Link]
out debt as the major pro ble·m for the world's poorer 20per cent. These figures would be very significant
nations. Here, debt is considered ::it the national for affluent countri~s, but can prove to be a erippling
scale rather than the personal level. The term tdebf burden for nations ·w ith very low incomes. Figure
generally refers to xternal debt (fo eign debtli 13.20 is a Christian Aid newspaper advertisement
which is that part of the total debt in a country owed illustrating the plight of Haiti~one of the worldJs
to creditors outside the country. Unpayable debt poorest countries, after the devastating earthquake
is a term used to describe external debt when the of January 2010. Other organisations such as Oxfam,
interest on the debt is beyond the means of a country, CAFOD and Islamic Relief mounted similar campaigns
thus preventing the debt from ever being repaid. A to cancel debt.

13.2 lnternational d ebt and international aid II

 % 25
20
1'5
,o
5
a _.__,~~~~~~~~~~~~~~

1995 2000 2005 2006 2007 2008 2009 2010

Year

Figure 13.21 Debt seMce-to-export rati.o, 1995--2010

Although external debt is still a ,major global problem,

LICs and MICs improved the sustainability of therr
external debt between.2000 and. 2010 (Figure 13.21). The
average debt-service ratio for all dev2loping countries
in 2010 was 9.8per cent. The higher figure for MICs such
as Chlna compared to LICs largely reflects the greater
economic strength of the former group of countries.
The debt-service ratio of the LICs fell fro·m 17.2per
cent in 1995 to 4.8per cent in 2010 {Figure 13.21). Tw'o
significant reasons for such a considerable change
have been:
• increased export earnings
THE aNLY THING STILL STAMlDJC!I IS THE DEBT. debt restructuring and outright debt relief from official
n. ......."[Link].~. .,... . . . . . . IIMII..Mlavl*lda.S - ~ and private creditors through the HIPC and MD·RI (both
ft. llridldl~l'IMll---onralllaco a r.-: IIO,.«~_. .. u.. peopl!t~
onthap,imd ,...-11~~.. discussed below).
hi ~IM--ltilM"J 1-,.aa.M '4t!IDS_,..tiw ~ I I . [Link] ltlillll&Aa Wll liUI filCII H upl1~

...,..~.;91~--
&rw» HIN lm.l'ilbl:a CK Wll aeDClnL. lkl ~ a:>11 Of 11111 ppp>W:°" 1--m p!IIIMrty. Ae Jllll't 411
- ~ ~ -pallmtt... ~ tW JliMsi ptqlla ~ . CJuvti,aa ""'.. ~ ClharimUlr While supporters of globalisation argue that
.u..}r D&illag ~ IJX-. ~ m lM tUl1) ID ud Gllwudd Ill J,!'JIUml1 lllhll llllll 111 at
~ economic growth. through trade is the only answer,
Sip tbtpedtton ocun.10 dl0p111edlb.l, critics say that HICs should still do more to help the
[Link]![Link] LI Cs through d bt relief and by opening their markets
to exports from LICs.
The USA owes more money to the rest of the world
than any other countzy. Some other rich countries such
Figure 13. 20 Chr~stian Ajd Hait~ campaign as the UK an.d Prance also owe substantial amounts.
However, t_hese countries have huge assets against
Table 13.3 shows the key debt mdicators for developing which they can borrow] so their debts are thought to be
countries by region, while Figure 13.21 illusmtes the debt manageable, although the recent global financial crisis
service~to-exports ratio for both LICs and MICs between has called this into question. However, in general, debt
1995 and 2010. repayment by rich countries is very different from the
immense struggle that poor countries have mtrying to
Table 13.3 Debt indli:cators for IUCs _pay their debts.
--
According to the World Bank, the total external debt
I
~ -
Debt
outstanding/
GNI, 2010
I Debt outstanding/
exports,2010
stocks owed by LICs increased by $437billion over 12
months, to reach $4trillion at the end of 2010. When a
,East As la &Pacific 13.5 37.0 LIC has to use a high proportion of its income to service
Europe & Ce:mtral Asia 43.0 121. .6 debt, this takes money away from. what could have
Latin Amer,lca & carlb'bean 21.7 102. i been spent on education, health, housm.g, transport and
Middle East & North Afr1ca ,,4. i 42 .5 other social and economic priorities. Multilateral debts
South Asia 19.2 94.3 are obligations to international financial institutions
Sub-Saharan MMca 20.0 54.0 such as the World Bank the International Monetary
1

Top 1O bonnwers "1'8.4 67.9 fund and regional development banks. Multilateral debt
othterLJCs 27.9 70.0 service takes priority over private and bil ateral debt
S·ervice.
Source: U?orld Bank Dehto,r Reporti,ig Systetn and /11,temational In 20121 the IMF highlighted countries it said were at
MornetaryP11nd quoted in Gl bal \' lopm nt Financ 2012 risk of not being able to pay their debts: Afghanistan~

II 13 Global interdependence
Burkina Faso~ D.R. Congo, Djibouti~ Gambia~ Grenada~ In order to receive independence from France, Haiti
.Kiribati, Laos~ Maldives, Sao Tome and Principe, vtas required to pay France 150 [Link] .
Tajikistan, Tonga and Yemen. In recent years, much of the debt has been
How did the international debt crisis come about? ~rescheduled' and new loans have been issued .
.Development economists have pointed to a sequence However, new loans have frequently been granted
of events that began in the early 1970s as the main only when LICs agreed to very strict conditions under
reason for the debt problems of many LICs. It began ·structural adjustment programmes', which have
with the Arab-Israeli war of 1973-7 4, which resulted included:
m a sharp increase, in oil prices. Govemments and
individuals in the oil-producing countrtes invested agreeing to free-trade ·m easures, which have opened up
so .. called petrodollars (profits from oil sales) in the their markets to intense foreign competition
banks of affluent countries. Eager to profit from such a severe cuts in spending on public services. such as
high ]evel of [Link], these banks offered relatively education and health
low-interest loans to poorer countries to fund their the [Link] of public companies.
development. Th9se countries were encouraged to
exploit raw materials and grow cash crops so that they D Debt relief
could pay back their loans with profits made from Restructuring debt to LICs began in a limited way
exports. However, periods of recession in the l980s and in the 1950s. Th.e UN (Figure 13 .22) and its related
1990s led to rising [Link] and i11terest rates in Western organisations have been fundamental in this process
countries. At the same time, crop surpluses led to a fall from the start. In 19S6 Argentina. ,~las the first
in ·prices. As a result, the demand for exports from LICs country to renegotiate the repaym~nt of its debt
fell and export earnings declined significantly. These with bilateral creditors within the frame"work of the
factors, together with oil prtce increases left mainy LICs Paris Club (set up for this purpose). Attempts were
unable to pay the interest on their debts. made by creditor nations to tackle the ~Third World
Loans can help countries to expand their economic debt crisis' through th,e 1980s and 1990s. Ho~"'everl
activities and set up an up\vard spiral of development these efforts were viewed a.s limited in nature
if used Vlisely. However, many of the loans that burden and often self-serving. The overall debt of poorer
the world's poorest countries were given under dubious countries continued to rise. The rescheduling of debt
circumstances and at very high rates of interest. repayments often brought temporary relief, but with
Critics argue that banks frequently lent irresponsibly interest added over a longer time period the overall
to governments that were known to be corrupt. The debt simply in creased. It was not until the mid-1990s
term diou debt has been used to describe debt that a more comprehensive global plan to tackle
incurred as HI Cs loaned to dictators or other corrupt the debt of the poorest countries was formulated
leaders when it was known that the money would (Figure 13.23) .
be [Link]. For [Link], shortly after freedom from
apartheid South Africa had to pay debts incurred by the
apartheid regime. Often such loans led to little tangible
improvement in the quality of life for the majority for
the population~ but instead saddled them 'With long-term
debt. If such countries had been companies they would
have been declared bankrupt. However international law
1

offers no afresh start' to countries in such a situation.

Many development economists also focus on the
legacy of co101 ialis 1, argui'ng that the colonising
powers left their former colonies \\Tith high and
unfair levels of debt when they became independent.
Such debts were often at very high interest rates. For
example:
In 1949, In.d onesia, as a condition of independence,
was required to assume the Dutch colonial
governmenfs debt much of which had been acquired
1

:fighting pro-independence rebels in the previous four

Figure 13.22 lhe UN bu~diing1, Manhattan, New York
years.

13.2 lnternational debt and international aid II

I·.[Link]: ·weaknesses -: stabili~ have prepared an interim Poverty Reduction
Stra tegj Paper (PRSP) and cleared any outstan ding
• AUO\i\f a country's loans • Often accompan1ed by a
to be rescheduled in shift from1domestic food
arrears. Completing these requirements mean.s that
order to make them1more cutt1vati on to producti·on of the country can now· receive full and irrevocable
manageable cash crops or commoditres reduction in debt available under the HIPC Initiative
for export and MDRI. To reach completion point, a country must
• Make ·the country's • Reduce govennment maintain macro~economic stability under an lMF's
econom1
y mor,e expend~ture by outti1ng sodal Poverty Reduction and Growth Facility (PRGF)-supported
competlbve programmes, -e.g. health and programme carry out key structural and social reforms
1

education, and abo!i,shing as agreed upon at the decision point and implement a
·food and agr1icu1tural PRSP satisfactorily for on.e year.
subsidi:es Figure 13 .24 shows the status of HlPC countries. AE of
• !mprove foreign • Privatisation of state April 2015 36 nations were classed a.s jpost-completlon-
investment po1entraJ by enterprises to cut point countries' and three as l)re-dedsion-point
removing trade andl/or government e~penditure countries'. Of the former group of countries, thirty are in
inves1ment restnictk,ns results in assets be~ng so~dl Africa, as are all three countries in the latter groupl In
to liNICs terms of the former group, the HIPC initiative is providing
• Boost icr-ei gn exchange • Increase pressure on $76billion in debt-se1vice relief over [Link] 44per
by [Link]~ng1exports countries to generate cent of the funding comes from the IMF and other
exports 1o pay off debt multilateral institutions and the rest comes from bilateral
rs
1

lhris ljkety to in crease creditors.

deforestat~on, land
degradati1on and other
env,ronmentai damage
Afghanistan Ethiopia Mauritania
• Reduce governmem • Some M~Cs accused .of
Ba,ln The Gambia Mozambique
defi arts. through cuts in protecting the1r own interests
spend~ng 8oltvla. Ghana Nicaragua
Burkina Faso Guinea Nfger
Figure 13.23 Strengths and weaknesses of debt-reduction
schem,es
Burundl Gulnea-Blssau Rwanda
Cameroon Guyana sao Tome & Pr1lnclpe
The Heavily Indebted Poor Countries (HIPC) Central African Republic Haiti Senegall
Initiative Ot1ad Honduras Sierra Leone
The Heavily Indebted Poor Countries {HIPC) Initiative Comoros Uberfa 111nzanla
was first established in 1996 by the International Republic of Congo J Madagascar Togo
-
Monetary Fund (1MF) and the World Bank. Its aim was Demooratlc Republic of Mafawr Uganda
to provide a [Link] approach to debt reduction Congo
for heavily indebted poor countries so that no poor C6te d',lvorre Mall Zambla
country faced a debt burden it could not manage. To
qualify for assistance, countries have to pursue IMF
and World Bank supported adju.s tment and reform
programmes. In 1999, a comprehensive review of the Figure 13.24 H~PC countdes
Initiative allowed the fund to provide faster deeper 1

and broader debt relief and strengthened the links Debt relief frees up resources for social spending
between debt relief, poverty red'U ction and social
Debt relief is part of a much larger process, which includes
policies. In 2006, the MultJ:lateral Debt Relief Initiative international aid1 designed to address the developrne·nt
(MDRn was launched to provide additional support to
needs of LICs. For debt reduction to have a. m9aningful
HIPCs to reach the [Link] Goals.
impact on poverty; th@ a:.dditiona.l funds made [Link]:ilable
In 2007, the Inter-American Development Bank also
need to be spent on programmes that are of real benefit to
decided to provide debt relief to the five HIPCs in the
the poor.
western hemisphere. According to a recent World
Before the HIPC Initiative, eligible countries spent on
Bank-11vIT reportJ debt relief provided under both
average more on debt serving than on education and
initiatives has substantially a]leviated debt burdens in
health combined. Now these countries have significantly
recipient countries.
increased their spending on education, health and other
To be considered eligible for HIPC Initiative assistance,
a country should have a track record of [Link] social services. On average such spending is around five
1

times the amount of debt-service payments.

II 13 Global interdependence
Conclusion Aid is assistance in the form of grants or loans at below
There can be little doubt that the HIPC Initiativ·e and market rates. Most lICs have been keen to accept foreign
MDRI have been more comprahensive debt-relief aid because of the:
structures than anything that [Link] before. However, • 'foreign exchange gap' whereby many LI Cs lack
1
the initiatives have drawn criticism both in terms of the
1
the hard currency to pay for imports such as oil and
limitednrunber of countries involved and the total extent machinery that are vital to develop1nent
of debt reduction. Even if all of the external debts of these • 'savings gap' where population pressures and other
1

countries were cancelled, most would still depend on drains on expenditure prevent the accumulation of
significant levels of concessiona] external assistancej since enough capital to invest [Link] and infrastructure
their receipts of such assistance have been much larger • ~technical gap' caused by a sho1tage of skills needed for
than their debt-setvice payments for many years. development
Since 1990, L]Cs have inc11=ased their buffer for external
debt [Link] service. Total debt services have decreased Many LICs rely on a very small range of exports for
significantly since 1999, due larg~ly to debt -relief foreign currency: The prices of such products are often
initiativ~s by multilateral and bilatera.l donors. low compared with the goods and services they need to
import and the prices for such raw materials can. also
1

be very·[Link].
But why do richer nations give aid? Is it down to
1 Define a debt and b debt-service ratio. altruism or self-interest? Much of the evidence suggests
1

2 V\lhat do you understand by the 1erm odious debt? the latter. Contrary to popular belief, most foreign aid is
3 How has the legacy of cof,onia1i1sm con1ributed 1o the debts not in the form of a grant, nor is famine relief a major
of a considerabl:e number of LICs·? component. A significant proportion offoreign aid is
4 Drscuss the sequence of events that are generaJlty accepted Etied' to the purchase of goods and services from the
to have led to,tl1e debt crisis. donor country and often given for use on jointly-agreed
5 a What ~s debt rel~ef? projects. Howeve~ the proportion of ti aid in relation
b Comment on the nature and effecnveness of the HIPC to total international aid has been falling in recent
Initiative and the MORI. decades.
Figure 13~26 shows how·these factors combine to form
D International aid the cycle of poverty.

Th·e origins of foreign aid date back to the Marshall

The different types of international aid
Plan of the late 1940s. This wa.s when th.e USA set out t o
reconstruct the warm torn economies of Western Europe Figure 13.27 shows the different types of intPmational id.
and Japan as a means of containing the international The basic division is between official government aid and
spread of communism. By the mid-19 50s, the battle voluntazy aid:
for influence between West and East in the developing Official government aid is where the amount of
world began to h ave a marked effect on the geography aid given. and who it is given to is decided by the
of aid. Even today, bilateral aid is strongly influenced by government of an individual country. The Department
ties of colonialism and neo~colonialism and by strategic for International Development (DFID) runs the UK's
considerations. Hov1eve~ it would be wrong to deny [Link] aid programme.
that aid is also given for humanitarian and economic Voluntary aid is run by NGOs or charities such as
reason-5 (Figure 13 .2 S}. Oxfam ActionAid and CAFo·o . NGOs collect money from
1

individuals and organisations. However, an increasing

[Link] of [Link] money goes to NGOs because
of their special expertise mrunning aid programmes
efficiently.
Official government aid can be divided into:
• bilateral aid, which is given directly from one country
t o another- a significant proportion of bilateral aid is
1
tiedJ
rnultilateral · di which is provided by many countries
and organised by an mternational body such as
the UN.
Figure 13.25 A school iin No~h Africa- education is O·ften a
focus of international aid

13.2 lnternational debt and international aid II

 -
Poverty ..
II,.
Malnutrition
...
!I"
Decreased resistance
to disease
.h.
,..
High death rate
for chrldren
L ll!t.
~
... r 11
Outmjgratio-n to urban areas to
se~k work- often young males
Decreased
energy
... Decreased abiHty
to learn
...
·r-
Decreased ab ill'ty
to wor.k
..... Shorten-ed
[Link] ~xpectancy
""
ft - ~
feedback ~oop Decreased ability to farm,
work and pro\l'ide food

Source: Edex'6/ A2 Geogf8(Jl)y by C. Dunn et al. (Ph illio Allan Updates. 2009), p.14Qi
Figure 13.26 The cycl!e of poverty

C lntemiltional aid
Aid suppli~d to poorer countries is of nuo types:
• Short-term emergency aid, often termed ·relief aid is 1

/ 1

~ ffidal government aid I Voluntary aidl provided to help cope with unexpected disasters such as
earthquakes volcanic eruptions and tropical cyclones.
1

• Long-term develo 1nent aid is directed towards the

/ continuous improvement [Link] quality of life in a
fM urti latera1 [ 8ii atera~ poorer country.
~ aid a~d
Figure 13.28 shows the types of bilateral aid provided
Long,. .ter:m
by DFID. As Figure 13.28 show·s, bilateral aid covers a
devel'opmen·t aid number of different categories of assistance.
Figure 13.29 shows how DFID can provide emergency
Figure 13.27 The dirfferent types of jn1:ernational eEd aid to countries in need.

Financial Aid - Poverty Reduotlon Budget Support (PRBS) p·r ogratnmes) and employment of 'other Personnel'
- Funds provide-d to d!eveloplng countries for them to spend (non-DFID experu on fixed-term commcts). Thi.~ latter
m support of a govemment poJtq· and thaJrr expenditure category is becoming less si.gnifica11t·over thne as extsung
[Link] whose .tons-sterm objectwe u ro reduce contracted staff read, the end of their :.'llssignments.
poverty; funds are speru usln the overseas [Link] n ments~ Humanitarian A sistance - Provides rood ald and other
O'\\"n fina:ncJal management, procur,ement and accountablllty hu manitartan tance, induding she11te~ medtc al care and
system-s ro increa ovmel'.sh!p and long-term sustainabnlty. advice in ernetjency situations and their aftermath. Work of
PRBS can take the fonu of a genera] contdbuUon ·ro ilie tbe ronf'Uct pools iS also included.
overaU budget - general budg,e t support - or support:
with a more restricted focus whlch i5 eemuirked for a DFID Debt Relief - Cndudes sums for debt re1fef on
specific sector - sector budget support. old DFID aid loons and canceUaUon of debt under the
Co1nmonwe~dth Debt lnitlaUve (CD]). The non-CD] DIFD
other Ymancial Aid - FundJng of projects and progran1mes debt re}tef ts reported on the basis of the rbenent to the
such as Sector Wide ProgcJmme-s not dassified as PRBS. recipient country'. This means drat figure-,g .shown represent
FinanciaJ aid! in its broader .sense covers aU bHateral
the money [Link] to the country in the yeM ln question
:)id expendjture> other than techrucaJ cooJ>etaUon and that would othenvise mtve been spent on debt se1vlelng.
3/dministrattve costs, but in [D -we separately categorise The CDl debt cancenadon is reported on a 'lump sum· basis
Htunamtafian tstance, DFlO De Relief and 'other "'·h re aU outstanding amounts on a loan at"e. shown ac the
[Link] aid• as it is a r3pidJy declining fl~·. time th agreeme:nt co cancel i n1ade.
Technical Cooperation - Ac1lviitfes designed to enhance Other Bilateral Aid - Covers support to the oowlopm~n[
the koowledge, i:meUectua] skills teduuca] expertise or the "'urk of UK and jntemational Clv:U Society OrgantsaUons
producUve capabHity of people in recipient countrle.s. It also ([Link] through partnership agreements with CSOs).
covers fu m:Ung of services that [Link] to the design or
U include.s bilateral ald deHvered through multilateral
impiementacion of development prolects or [Link]. organlsaUons :in dudtng aid delivered rhrough muiti donor
This assistance fs fflainfy delivered through r~earch and funds such as th.e Educatlon Fast Track lnitiative. jOther
devefop,ment, the llSe of consultants, [Link] (generaUy [Link] ~id' alro includes any akll not elsewhere classified
oveJSeas partners vis1ting the UK or ebewhere for training such as DFID's Devslbpment Avtaranes.s Fund.

Source: Statistics of lntemational Develcpment 2008,. Department for 'lnler,nattonaJ Development

Fi gu r-e 13.28 UK Department for International Development - types of blfaterall aid

• 13 Global interdependence
 4D 1ber 2007
aid may delay the introduction of reforms, for example
the substitution of food aid for land reform
On 1- and 16 N M ,nbe;.1·. south<.~n Ban lade!Sh w as hit
international aid can create a culture of dependency
by Cyd.o nc idr. "o far~ over 6 miUion pcopk have been
that can be difficult to break.
affected and 2997 people have been confinncd dead. T\.1any
nlo t·e have been injured, and the death to.U could reach Arguments put forward by the political right ewing
10 OOO (the death toll [Link] the cydone in 1991. was economists aga:inst aid are as folloiys:
140000). [Link]); around 300 OOO houses hav,e been destroyed ,
• Aid encourages the growth of a larger than necessary
as have many crops and large u~acts of agricu~tural land.
public sector.
FoUowing an initial DFID contdburtjon of £2.5 n:ri]Uon.
• Toe private sector is crowded ouf by aid funds.
1

which is being channeUed through the UN for :[Link]~te

• Aid distorts the [Link] of prices and incentives.
rdief effort , a further .£2 .S m iJ Uon ''h ll pl-ed ed on
Afd is often wasted on grandiose projects of little or no
23 Nov mb r. O n 2 No v n1 e r, a n ad clitionaJ E2 miJliion
benefit to the majority of the population.
was committed to help :s-u rvivors Eo r,ebuHd their hom s and
• The West did not need aid to develop.
live lihoods. DFID has also provided 12 Bghttweight boats
to reach inaccessibie parts of Bangladesh) and despatched Many development economists argue there ar-e two
ovet· 100 OOO blankets for peopJe 1nade hon1eless. issues more important to development th an aid:
Already DFID 1uoney is helping to rebuild nlore than
• changing the terms of trade so that LICs get a fairer
16 OOO hotnes , pt·ovide foo~ to 70 OOO fan1Uie.s and dean
share of the benefits of world trade
water to 26,0 OOO famiHes . The UK's disaster relief aid m
• vn:iting off the debts of the poorest countries.
Banglades h now totals ahnost i.t.12 n1illion (US 24 n1illion)
for £his ye ar, with £4.7 1niUion having been provided in Figure 13.30 sho,vs the average official development
:re p on se to d1e ~evt:t-t> f1 a ds that occurr~ in Augu ·t. assistance (ODA) received by the economic status of
Secr~tary of tate for Int rnatio n:d DL-~v~Jopm~nt, D0 ugh1s countries between 1970 and, 2012. One-quarter of all
Alex:andi:.:r~said ycst rday: ODA during this period was allocated to the LICs.
·[Link] cine:rgency relief suppJics get to vktin1s it is an Tuble 13 .4 shows the top ten recipients of ODA in
too Uke1y that mare pe ople will dle nee<l]essly. That m .s why 2012-13, with the largest amounts of mon~y destined for
the UK continues to pt''OYide funds to get tnore food, dean Afghanistan, Myanmar Vietnam and India.
1

water, basic sheker and other en1ergency supplies to tens of

thousands of s urvivors. \Vjth. half a miUion anin1a]s kiUed,
MADCTs (more
ne ady two nlilBon acres of crops and more d1an a n1illion advanced developing Other UCs
homes destroyed, the ne.>..1: chaUenge is to help peopl~ couintri es & (Iow-income
rebuild thcir homes and Jivt:lihood"'. TK support is nieeting territories) 5 o/o co untries) 2 %
i1"nmt:d'iat~ and longe r term n~~d. a w eU. I continue to
I
a miring of the resiH n ee and d e te rmination o f th
Bang la deshi p opl · as th "l face thcs,c ch allenges." LMICs (low
Source; UK Depi!rtment for lnternatlonal Develo,pment (DflD)
llJ M IC:s (upper middle~income
middle~income - - cou ntries) 31 %
1
counuies) 14 %
Figure 1 3.29 IDFIO pro~des emrergency aid towards Bang lade-sh
cydlone
Source: OECD. September 2014

There is no doubt that .many countries have Figure 13.30 Average ODA by the econom,ic status of countries]
benefited from international aid. All the countries that 197~2012
have developed into MICs from LICs have received Table 13.4 Top ·ten recipients of gross ODA (US$)~ 20112-13 average
international aid. However, their development has been
due to other reasons too. It is difficult to be precise about Rank: •
the contnbution of international aid to the development 1 Afg han lstan
of each country. According to some left -wing ~conomists, .2 Myanmar
aid does not do its intended job becau se: 3 Vietnam
4 lndla
• too often aid fails to reach the very poorest people and
6 Indonesia
when it does the benefits are frequently short lived
6 Kenya
• a significant proportion of foreign aid is itied' to the
7 Tanzania
purchase of goods and services from the donor country
and often given for use only on jointly-agreed projects 8 cote d'IVOlrG
the use of aid on lerge capital-intensive projects may 9 Ethlopla
actually worsen the conditions of the poorest people 1·0 Pa~lstan

13.2 lnternational d ebt and international aid II

 b ODA, US$ bHlion (2014)
keland
[Link],iia
Sleva k Republic
Czec:h Rep ub Irie
Greece
Portugal
Luxembourg
Poland
New Zealand
Ireland
Austria
F·in'land
Korea
Spain
Belg:ium
Denmark
~ta ly.
Switzerland
Canada
Austr,ia
Norway • •
Nethedands
Sweden •
Ja:pan
-==~
France

0.25 0.5 0.75 1 1.25

Germany

UK·------·
USA
0 5 15
1

20 25 30 35
Sourci: WMv.o:[Link]
Figure 13.31 a ODA as a percentage of GNl1 20141 b ODA in $biU1
ion1 2014

The ODA provided by the more affluent countries As one of the four Asian ~tigers' , it was a member of
of the world varies widely. Figure 3.31 shows the two the first generation ofNICs along with Singapore, Hong
standard ways in which. ODA is measured. Figure Kong and Taiwan. South Korea became a donor country
13 .31a is the favoured method which shows ODA as a
1
in 1987 . The amount of ODA provided by South Korea
percentage of gross national income {GNI) for 2014. In reached approximately $200million in 1998 $800million 1

this yearj only five countries met the UN target of 0. 7 per in 2008 and $1200million in 2010.
cent of GNI. Figure 13.31b shows total ODA by country:
Here, the USA is by far the largest donor, although it is The effectiveness of aid: topsdown and bottom~up
only in 19th place as a percentage of GNI. approaches
Over the last 30 years or so, some countries have over the yea:rs. most debate about aid has focused on the
changed [Link] recipients of ODA to donor amount of aid made availabJE. Ho·wever, in recent years
countries. South Korea is a case in point. Betvleen 1945 the focus has shifted more towards the effectiveness
and the late 1990s, Korea. received about $12.7 billion in of aid. This has involved increasing criticis.m of the
aidJ which assisted economic development and helped traditional top-down approach to aid.
to alleviate poverty. This aid was mainly provided by The financing of the Pergau Dam in Malaysia with
the USA, Japan and Western Europe. The economic UK government aidl is an example of a capital-intensive
[Link] of South Korea has been astounding. government-led aid program·m.e, set up without consulting
the local people. Work began in 1991 and around the same
time Malaysia bought £1billion-worth of arms from the
UK, leading many people to believe that the £234 million in.
aid was [tied' to the [Link] deal
The Hunger Project is one of a.. number of
[Link] tha.t have adopted a radically different
approach (Figure 13.33). The Hun.g er Project has
worked in partnership with grassroots organisations in
Africa Asia and Latin America to develop effective
1
ttom-
up trategies. The key strands in this approach have been:
• mobilising local people for self-reliant action
intervening for gender equality
Figure 1 a.32 A Japanese a,d project in MongoUa strengthening local democracy.

• 13 Global interdependence
 The conventional top-down, service-delivery model The Hunger Projec1's bottom- up empowerment model
Who a,re hungry Beneficiaries whose bask neceds must be met Principal authors and actors in development - harrdworking,
people? creative indiv1id uals who lack opportun tties.
1

What must be Provide services througn government o.r charities. Mobilis-e and empower peop:l~ s: self-reJliant action. and s'[Link]
1

done? in solidarity with them for their success.

What's the primary Money and the expertise of consultants and programme People: therr vision_ mobi:lisaition, entrepreneurta1 spir,it and
resource f o,r managers. comrdence.
develop men1:1
Who i.s in d1a,rge7 Donors, who prov1ide the money and no'ld imp lementers Loe a I peo pie: through erected lo ea I leaders whom they hold to
to account. account.
What are the ma,in Bureaucracy: the i'neffkrency of the [Link],ivery system. Social conditions: res1gnation, d iscrim1,nation (particufartry
constra.ints7 gende~, lack of local leadership, lack of rights.
What is ~he role of Vulnerable group wno must be espedally targeted Key producers who must have a voice in decis,ionamaking.
women? be nefi oia 'rtes.
Wha,t about soc ia1I Immutable conditions tha.t must be compensated for. Conditions that peopte can transform.
and cu iltural' i,ssues7
How snouJd we Carefully target benefidaries on an objective-needs bars1s. Mobilise everyone ais broadly aiS possjb:le. build spi1it aon<l
focus our work] momentum of accompltshment
What ~s the role of Operate centraUy managed s-erv-ice-de,livery progra,mmes . Decentralise resources and decision making to 1local levet; build
ce;ntra 'I gove.m ment7 local ca,pacrty; set standards; 1protect ri:ghts.
What ~s the role of Implementing arm of central, programmes. Autonomous l,eadersh~p di,rectty accountable to people .
1loca l! government?
What 1s the role of Imp le me nti ng arm of centra I'IPro g,ram,mes. Catalyst to mobilise peopl,e; fignt for their rights; empower
civH society, peo:p Ie to keep 9overnm ent a<:co untab'le.
1

ing top.. down and bottom,..up aid models

Figure 13.33 Conitrast1 S01.n-ce: The H·u nge,· Project

Non-governmental organisations: leading agencies. The selective nature of such aid has
sustainable development targeted the poorest communities using appropriate
NGOs have often been much better at directing aid technology and involving local people in decision-
towards sustainable development than government making.

WaterAi d was estaljl1 ished in 198 i. Its first project was in

Zambia but its operations spread quickl~ to other countriies.
MalE ~s one of the countries in whrrdh Wa1erAid currently
N
WESTE RN
SAH ARA ,
J ALGERIA
operaies.
IMaJ~I in West Afdca, ~ one of the worJd's poorest nat~ons
T 400
1
SA HA 18A: D E ~ E R T

(Flgure 3 .34). The natural enViironiment is harsh , and ~s o km MAURITANIA MALI

detedoratring. Rainfalll teveis, already low, are fatting further
Atlantic ~
and desertirflcation is spreading. Curren~yt ,65 per cent of the Ocean
country i1s desert or semi-desert, and 11 m1(l!ion people sd~l ilack SE NEGAl
access to safe water. [Link] has been act~ve in the country GAM B~A:
s~nce 2001.
lts mai'n concern is that the fuHy privatrsedl water industry
GUINEA
BISSAU
frequendy raifs to provide seMces to the· poo:rest urban and
rural areas. [Link] ~s runrning a pilot scheme ~n the stums
1
surroundi11g1Mali s caprtat Bamako, provriding dean water
and sanitat~on s [Link] to the p oores1 peopf,e. ns objective
rrs 1:o demonstrate to botll g:overnment and other donors Figure 13.34 Mali
that proiecis ~n stu1ms can be suooessfulJ bo11h socfally and
econom~oaU~.

13.2 lnternatio na l debt a nd internatio nal aid II

 WaterAid has firnancedl ~he constructfon of 1he area's water
Sanitati,on Hyg1ene
network. tt ~s ·trraining ~oca~ peopte to manage and ma~ntaijn the [ Safewater + + education
system, and to raise the money needed to keep it operational.
Encouraging the community to invest ~11 its own ~nfrastructura + /
is an important part of the philosophy of the project. According, [M-a-x-jmi
- .s--e-s-health benefit; J
to ldrissa Ooucoure, WaterAid's Wast Amca Reg~onall Manag1er,
~we are now putting o'Ur energ1y into ·educat~on prog1rammes +
and empowering1the com1
miunEties to cont~rnue their own Wrthout disease commun·lti,es are stronger
deve~opment imo the future. This will anow WaterA1d to move
on and help others.'
Afready there have been significant i1mprovem,ents 1 in the More people can wo~k and attend schoo~
ov,er~l lh eaIth of the oommun ity. The general v,iew is that It • Peopl,e are able to save the money·they spend on medicines
takes a g,eneration for health and sanjtation to be properly • The time saved co·ll·ecti ng water ea n be used productively
embedded into people's day-to-day lives.
WaterAid Js the UK's onlry m,ajor charity dedicated
exdus~vely to the provtsion of safe domestic water! sain1taticn
+
The economy grows and deveJops
and hygiene·,education to the worlid 's poorest peop~e. These
three crucial etemen1s provide the bui~d~ng1blacks for aH otl1er Figure 13.36 Wat,erA~d's build~ng1 bl!ocks of deve1opmre nt
devefopm1ent Without them 1 comimunities rama,n stuck in a
cycle of dtseas e and poverty. The combination of safe water,
sanitation and hyg1lene educa1ron mwdm~ses heallth benefits £
and pr,o:m otes devefopment {Fi1gures 13.35m 13..36 and 13.37). 600
The combined benefits of safe wate~ sanrtation and hygiene Pays fo.r the complet1on of a
l Smetre hand-dug well in Zambiar
education can reduce incidences of chiitdhood dianhoea by up 500
to 95,per cent. A chi1 d di1es every 15 seconds irom1diseases
1

Pays for a public water pojnt in

assodated wth a !lack of access to safe water and adequat,e 400 an urban slum.,in Bang~adesti,
sani1:a·tio111. used by up to 100 fa mHies
300
Pays for [Link] sanitation
200 block for 1150 pupiis :in lndi~

100 Buy,s a hand pump to serve

100-·150 fJeOple in Madagasc;ar

A B C D
Figure 13~37 [Link] cost exampfies

In the longer ·term~ communities are abfe to p1an and bumtd

infrastructure that ena.b!les them t,o cope better mn ·times of
hardship. In areas wrth WaterAid projects, life in t~m,es of
drought ts eased because:
• pr6'[Link]~ in times of droug h1 women 1n partiiou~r would
1

spend hours ~n seardh of water; ieav~ng rittfe time to find food

• chiidren would a~so m~ss out on education jn ~he search for
Figure 13.35 Water supp:ly ~s very basic ,n rmany poor countnies water
• cattle can be watered. rather than sotd or teft to die
beeause o,f water shortage
dur~ng1famines, with santtatton, water and hyg~ene people
are less s~ck and so are better aljle to fend off disease.

Microcred it and social business tiny loans and financial services to poor people to start
The development of the Grameen Bank in Bangladesh their own businesses. Women are the beneficiaries of most
illustrates the pov1er of microcredit in the battle against of these loans. A typical loan might be used to buy a cow
poverty. The Grameen Foundation uses microfinance and and sell milk to fellow villagers or to purchase a piece of
iri-novative technology to fight global poverty and bring machinery that can be hired out to other people in the
opportunities to the poorest people. The bank provides community.

Ill 13 Global interdepende nce

 The concept has spread beyond Bangladesh to reach Under one method of economic measurement~ tourism
3.6rnillion families in 25 countries. Muhammad Yunus is the world s major service industry. Tourism has an
1

highlights oc..· 1 bu, i ~ as the next phase in the economic, social and environmental impact on virtually
battle against poverty in his book Creating a World Wzthou t every country [Link] world. In some countries, it is a
Poverty. He presents a vision of a new business model that considerable political issue. Without doubt, it is one of the
combines the operation of the free market with the quest major elements in the process of globalisation.
for a more humane world International tourist arri 1als reached a record of
1.13Sbillion in 2014 (Figure 13.39} This was the fifth
consecutive year of above-average growth since the
2009 economic crisis. In the same year, international
1 Define intematlonal aid.
tou ist rec ipts amounted to a record $1.245billion. An
2 Exp~ain tihe difference between offidall government ~d and additional $221 billion was generated from international
votuntary aid. passenger transport, bringing total exports from
3 Produce a ·flow diag1ram to show how aid can speed up international tourism up to $1.S trillion. Other figures
devefopment. for 2014 highlighted by th9 United Nations World.
4 Ojscuss t\No possibfe disadvantages of ~n1erna1fronaJI atd. Tourism Organization (UNWTO) include tourism
5 Look at Figure 13.36. accounting for:
a, What do you understand by the foll!ow~ng terms:
i safe wat~ ii sanitation, iii hygiene education? • over 9:per cent of global GDP
b Why rs ~t so important to combine these three factors to • 1 in 11 of all jobs globally (over 275million people)
ma:x1mi se the health benefits to a community?
1 6 per cent of global exports
6 Explain why heallthier ·communJt~es are 1more likely to be abl!e 30per cent of global services exports.
to improve thek i1iV1ing1standards.
7 l~ p1ain a microcredit and b social business.
Africa Actual Forecasts
"' -~ 1800
'iii 1.8 biUion
Middle East
> ~~~ 1600
13.3 The evelopment of
·c
~
't-
e 1400
Americas
Asfaa & Pa dfic 1.4billion
"i: '1J 1200 Europe
international tourism ::,
,S "
.! 1OOO
~
1ij u j940mimon l
C f 800
D Reasons for and trends in the growth 0
.:;
,g
600
of international tourism E 400
Over the last 50 years, ton ism has developed into a major
global industry that is still expanding rapidly. Tourism is
-f 200
0-i-~---~---~--~---~---~--~------;
1950 1960 1970 1980 1990 2000 2010 2020 2030
defined as travel away [Link] home environment a for Vear
leisure, recraation and holidays (Figure 13.38), b to visit Source: UNWTO Trurism l-llghlights. 1014 Fdition
friends and relatives and c for business and professional
Figure 13.39 Growth in1world tourism and forecast to 2030
reasons.

In regional tenns the highest rates of growth in

1

the previous year were achieved by the Americas (up

7 per c:ent) and Asia and the Pacific {up 5 per cent) . In
contrast, Europe and the Middle East (up 4per cent)
and Africa (up 2per cent) grew at a slightly more
modest pace. Looking in more detail at sub-regions,
North America (up Bper cent) had the highest growth
rate followed by North-East .Asia, South Asia., Southern
1

and Mediterranean Eurape Northern Europe and the

1

Caribbean, all increasin.g by 7 per cent.

Europe still attracts more than half of all
international tourists (Figure 13 .40) a total of 1

588million in 2014. The number of tourists visiting

the other regions of the world were in descending 1

order: Asia and the Pacific {263million) , the Americas

Fi gur-e 13. 38 A remote isrand in Indonesiia - a destJnat~on for a (181 rnHlion) ~ Africa (56 million) and the Middle East
smaH expedition orui8e ship (5Omillion) .

13.3 The development of international tourism •

 Africa 5 o/o Tab le 13.5 Top ten countdes - ~nternattonaJI tourism arrivals~2013
!Middle East 5 % \

1 Franc~ 83,0
Americas
16 o/o
1
2 USA 69.B
3 Spain 60.7
4 China 55.7
Europe
52% 5 litaly 47.7
6 Turkey 37.8
Asla Bi Pacific
23 o/o 7 Germany 3i,.5
B UK 31.2
g Russian Federation 28.4
10 Tnalla,nd 20.5

Figure 13.40 Regjonal shar.e of worJd tourist arnivats, 2014

Table 13 .5 shows international tourism arrivals by Table 13.6 Top ten countdes- irnternat~nal tourism receip1s, 2013
the 1nain individual countries. Here four countries 1

recorded a. total of over 50 million arrivals in 2013.

In order of importance, these were France (Figure
13.41), Spain the USA and China. Table 13 .6 shows 1 USA 139.6
international tourism receipts by country for the 2 SpaJn 60.4
same year. Th e trend is similar to that for tourism 3 France 56:1
arrivals. However, it is not an exact relationship 4 China Si .7
because: 5 Macao (China) 5i .6
the average number of days spent in some destinations 6 ~taly 43.9
is longer than in others 7 Thalland 42:1'
visitors spent more money in some destinations than
8 Germany 41.2
others.
9 UK 40.S
10 Hong :Kong (Ohlna) 38.9

Sout--ce.• Uf,lWTO

The countries recording a total of over $50billion in

order of importance were: the USA, Spain, France and
China.
Tourism is an increasingly important contributor
to economic growth and employinent in a significant
number of countries. A range of factors have been
responsible for the growth of global tourism .
Figure 13 .42 subdivides these factors into economic~
social and political reasons, and also includes factors
that can reduce levels of tourism, at lea.s t in the short
ter.m . Some of these factors have been active for a
long~r tim~ period than others .

Figure 13~41 The fast 6urostar trafr"'IS have been popldar with
tourists ~ismng1France

• 13 Global interdepende nce

 Stead fly rising rea I in comes - to uri,sm grows o,n ave ra g,e 1.3 times The annual holiday for the masses, away from work,
faster tha,n GOP was a product of the Industrial Revolution, which
The decreasing rea 1costs (wit ~ inf Iation ta ken into account) of
1
brought big social and economic changes. However,
holidays until the latter part of the nineteenth century only
The w ide.n ~rng: rang e of destinations w it:f1,in t he mrddie-in come the very rich could afford to take a holiday [Link] from
range h om ·e .
The heavy marketLng of shorter forejgn1holiidays .aim,ed at those The first package to1us were arranged by Thomas
w ho have the ti,me and d:tsposable ,income to [Link], :3n additi,onail Cook in 1841. These took t r avellers from Leicest er to
break
Lou ghborou gh {UK), 19kilometres away. At th e time, it
The ex;pansio n1of budg et airlines
was the n ewly laid railway network that provided the
'Air miles' and other retaiit [Link] schemes a1imed at traver and transport infrastructure for Cook to expand his tour
....u to urism
operations. Of equal importance W"as the e·mergence of
e0 1
·Gl'oba1isatton' has increased b usiiness travel, considerably
a significant middle class who had the time and money
§ Periods of econom ic recession ca n red uce l'evels of tourism
to spare for extended recreation.
J:I considerably
By far the greatest developments have occurred
An· increase in the average number of days of pa,id leave 1

since the end of th,e Sec:on d World War, arising from

An, increasing desire·to expe,rience [Link] cuttures and
la:ndsca,pes
the subst an tial growth in leisure time, affluence and
Raised expectations of international travell wtt t:l increasing media
mobility enjoyed in. HICs. However, it took the jet plane
coverage of holidays; trave1and nature to h erald the era of international mass t ou ris·m. In
19701 when Pan Am flew t h e first Boeing 747 from New
-·;:;
f'lll
H·igh leve ls of rnte rnat fonal migration over the last decade or so
means that more people have relati,ves and friends living abroad
1
York to Lon don, scheduled planes carried 307million
0 passengers. By 2013, the number had reached
- 1111 More people are avo iding certa,in destinations for ethi cal reasons
Ma,ny governments have invested heavily to encourage tau rism
- 3.1 billion according to the International Air Transport
Gove-rnment backing for major international events such as the Association (IATA) .
Olympic Games and the World Cup T vel 1no · tors are the reasons that people [Link]
The [Link]' greater ilikel,ihood of terrorist attac:ks in c~rtafn the .m ajor tourism organisations recognise three major
destiri atlo ns categories (Figure 13.44).
-mu Government restrictions on inboUind/outbound tourism

0·-
".;::i
Calls by non,agovernmental organisatiions to boycott countries
a. such as Burma
Figure 13.42 Factors affecting global tou1r1sm1 Tertiary
Prime Secondary desti nation
The ·medical profession was largely responsible for the reasons subd ivisions preferences EKte rnal i ties
growth in people taldng holidays away from home. During
Holiday
the seventeenth century, doctors [Link] began to
recommend th.e benefits of mineral waters, and by the end Sport or Climate
cultural event
of the eighteenth century there were hundreds of spas LeJsure
mexistence in the UK. Bath (Figu re 13.43) and Tunbridge Educational
trip Destination
Wells were amon g the m ost famou s. The second stage in -security
th e development of holiday locations was th e emergence Pi tg ri ma9·e Attracti ons
of the seaside resort. Sea bathing is usually said to h ave
begun at Scarborough in about 1730. Confenmce/
e·xh ibitio n
Fesdvals
Business - ·-
and even:ts
Individual
meertings

Accommodation/
rest.a urants/ Exchange
Stay with bars rate
famjfy
Visrhng
fri ends and
lranspo rt (to
re-~at ives
t:h e destirn1t1on
M eet
and withfo vt)
friends

Figure 13.43 The historioaJI 1mineral waters ~nthe spa town of Bath Figure 1 :3.44 Key trave~ m,otivators

13.3 The develo pment of inte rnatio na l to urism II

 Many LICs and MICs have become more open to FDI Political uncertainties - governments may advise their
in tourism than they were two or three decades ago. citizens not to travel to certain countries if the political
In general, there [Link] now fewer restrictions on foreign situation is tense.
investment [Link] in LICs and MICs than for many International image- e 2006 US-made film called
other economic activities. In fact, many governments in m
Turistas has [Link] major concern Brazil; it depicts 8
LICs and MICs have very actively promoted a range of: group of US backpackers whose holiday in a Brazilian
resort turns into a nightmare when they are drugged
'soft' measures such as t ourism internet sites and
and kidnapped and then their organs are removed by
support for trade fairs
organ traffickers.
11ard' measures such as providing incentives for foreign
• Increasing competition - as new, jmore exciting'
investors.
destinations increase their market share, more
Recent data from the World Tourism Organization traditional destinations may see visitor numbers fall
(VITO) shows that touris·m is one of the top :five export considerably:
categories for as many as 83per cent of countries and is
The World Travel and Tourism Council (WITC), in its
the main source of foreign ~chang9 for at least 38per
assessment of the global performance of tourism in 2014.,
cent of countries.
[Link] particular note of the Ukrain~Russia conflict ,
Ebola in West Africa, political instability :in Thailand] the
continuation of major instability :in Syria and Libya and
terror attacks in Nigeria and Kenya. Since thenj the terror
1 Define tourism. attacks in Tunisia and Shann el-Sheikh, Egypt have also
2 EqJ!la1n ~e terms a international tourism arrivals and affected touiism mthose regions.
b intemational tourism receipts.
3 Descdbe itjhe changes shown ~n F~gure 13.39.
4 Sug:gest reasons for the globaf share of toudst amva!s
shown rin F~gure 13. 40. The impacts of tourism
Social and cultural impact
Variations in the level of tourism over time and space Many communities in LICs and MICs have suffered
Unfortunately, more than 1nany other industries] tourism considerable adverse cultural changes, some of them
is vulnerable to external hocks. Periods of economic through the imposition of the worst of Western values.
recession characterised by high unemployment modest The result has been in varying degrees:
1
1

vlage rises and high interest rates affect the demand for the less of locally owned land as tourism companies
tourism in most parts of the world. Because holidays buy up large tracts in the most scenic and accessible
are a. high-cost purchase for most people, the tourist locations
industry suffers when times are hard. • the abandonment of traditional values and practices
Tourism in individua] countries and regions can be • displac:em~nt af psoplE? to ma.k~ way for tourist
affected by considerable fluctuations caused by a variety developments
of factors: • abuse of human rights by governments and companies
Natural disasters-earthquakes, volcanic eruptions, in the quest to maximise profits
floods and other natural events can have a :m ajor • alcoholism and drug abuse
:impact on tourism where they occur. • crime and prostitution, sometim·e s involving children
Natural processes - coastal erosion and rising sea levels visitor congestion at key locations, hindering the
are threatening important tourist locations around the movement of local people
world. denying local people access to beaches to provide
Terrorism - terrorist attacks, or the fear ofthe·m~ can 'exclusivity' for visitors
d9t~r visitors from going to certain countries, mthe - the loss of housing for local people as more visitors buy
short term at least. second homes in popular tourist areas.
Health scares - for example the severe acute respiratory Figures 13 .45 and 13.46 show how the attitudes to
syndrome (SARS) epidemic mMarch 2003 had a touris:m of host countries and destination communities
considerable short-term impact on tourism in China in :particular can change over time. An industry that is
and other countries in South East Asia. usually seen as very beneficial initially can eventually
Exchange-rate fluctuations - for example if the value of become the source of considerable irritation, particularly
the dollar falls against the euro and the poun~ it makes where there is a big clash of cultures. Parents in particular
it more expensive for Americans to [Link] in Europe, are often fearlul of the impact 'outside' cultures may [Link]
but less expensive for Europeans to visit the USA. on their [Link].

• 13 Global interdepende nce

 The tourist ind ustty and the various scales
of government in host countries have become
increasingly aware of these problems [Link] are
[Link] using a. :range of managem,ent techniques in
an attempt to mitigate such effects. Education is
~
~
the most important element so that visitors are
S1erras de made aware of the m ost sensitive aspects of the
11 jeda host culture.
~lmlJara · At its very worst, the impact of tourism amounts
"' ama to gross abuse of human rights. For examplej the
actions of the ·militazy regime in Burma - forcing
people from their homes to make way for tourism
developments, and using forced labour to construct
tourist facillties - have brought condemnation from
all over th~ world. The tourist industry h as a h ug~
appetite for basic resources, which often impinge
heavily on the needs of local people. Alonge term
protest against tourism in Goa highlighted how one
five-star hotel consumes as much ·w ater as five local
villagesj with the average hotel resident using 28 times
m ore electricity per day than a local person. In such
situations, tourts t numbers may exceed the carrying
cap city of a destination by placing too much of a
Figure 13.45 Entrance to a natrona! park ~n Anda~uda1 Spaiin - burden on local resouices. The concept of canying
the graffiti refers to the nu1mber of foreigners buylng up houses in capacity has sometimes been taken beyond just the
the nea~by vi1llege of FMig~tiana ability of the physical environment to accommodate
tourists/ visitors without resultant deterioration and
degradation. One classification has identified four
- Euphoria elements of the concept:
Enthusiasn1 for tourist deve lo prne-nt
• Physical - the overall impact on the physical
Mutua] feeling of [Link] n
environment, for example footpath erosion
O p portuniti~s for !ocaJ panid p-atio n
Ecological - the number of tourists that can be
F]ows of 1noney and int~resting contacts
accommodated without sigruficant impact on the flora
- Apathy and fauna
[ndu try expands Economic - the number of tourists a destination
Tourism ta kem-, fo r grante d can teke without [Link] adverse economic
Mo re i nt:ere s t in pro fit n1~king implications
Pe rson a] [Link] becon1e.s 1n01-e fonnal Perceptual - the attitudes of the local people in tenns of
h ow they view increasing tourist :nrunbers.
Irritation
Industry n e,.adng saturatio n point
Expansion of facilities re quired Changing community structure
En croach:rne nt of the w;ty o,f life Communities that were once very close socially
and economically may be weakened considerably
Anta go11i n1 due to a. major outside influence such as tourism.
Trritadons b conl m overt
The traditional hierarchy of authority \uithin the
Th~ tourist i-s seen a s the harbinger of _U that is bad
community can be altered as those whose incomes
rfutual p o liten ess gives w ay t,o antagonisn1
are enhanced by employment in tourism gain
Final level higher status in the community. The age and sex
Envit"Oncnent has changed in--evers ibly structure may change as young people in particular
The resource base h as changed and the typ e of tourist m ove away t o be closer t o work in tourist enclaves.
h as aJso change d Changing values and attitudes can bring conflict to
[f the d estinatton is large enough to cope with mass previou sly settled comm unities. The close ties of the
·ro u risn1- j r w il i. contiti u e to dtrivt.: extended family often diminish as the economy of
the area changes and material wealth becomes more
Figure 13.46 Ooxeis ~ndex of inritat~on caused by tounism1 important.

13.3 The development of international tourism II

 However, tourtsm can also have positive social and Tourism undoubtedly brtngs valuable foreign currency
cultural impacts: to LICs and M1Cs, and a range of other obvious benefits,
but critics argue that its value is often overrated because:
Tourism development can increase the range of social
• Econon1ic leakages (Figure 1.3.48) from LICs and MICs
facilities for local people.
to HI Cs run at a rate of between 60 and 7S per cent.
It can lead to greater understanding between people of
With cheap package holidays, by far the greater part
different cultures.
of the money paid stays in the country where the
Family ties may be strengthened by visits to relatives
holiday was purchased.
living in [Link] and countries.
• Tourism is labour. .intensive 1 providing a range of jobs
It can h elp develop foreign.- language skills in host
communities. especially for women and young pE!Ople. However ·most
1

1t may encourage migration to major tourist-generating local jobs created are menial, low paid. and seasonal.
countries. Overseas labour may be brought in to fill middle and
senior management positions.
~ multit:-ide of cultures congregating together for major
mtemahonal events such as the Olympic Games can Maney borrowed to invest in the necessary
infrastructure for tourism increases the national debt.
heve a very positive global impact.
• At some destinations tourists spend most of their
money in their hotels, with minimum benefit to the
,vider community.
1 Ojscus.s three negative sociaJl/ou1l'tural aspects of toudsm. • Tourism might not be the best use for local resources
2 Comrm ent on Doxey's ~nd ex (Figure 13. 46). that could in the future create a larger multiplier effect
(see below) if used by a different economic sector.
Locations can become overdependent on tourism.
Economic impact Intern ationa.l trade agreements, such a.s the General
It is east to underestimate the economic impact of Agreement on 'Trade in Services (GATS), are a major
tourism. What is commonly thought of as the tourist impetus to [Link] end aUow the global hotel
mdustry is only the tip of the iceberg. Figure 13 .47 shows [Link] to set up in most countries. Even if governments
both the direct and indirect economic impacts of tourism. favour local investors there is little they can do.
1

Mllchi
llillMqllii nttt
p.- f«.

........

Flgure 13.47 The eoono,m~c impact of toudsm,

II 13 Global interdepende nce

 UC tourist destinations
Total money spent on tourism to this destination

Trans:port costs paid Payrn~nts to foreign

to airlin~s al'\d other owners of hote,ls .;m d
carriers other fa ci Ht1es
The cost of goods
Remittances sent home
and services ~mported
for the tourist
by foreign workers
,industry

Foreign debt re1ating Payments to foreign

to to·urism companies to build
to ur1ist infrastructure

Leakages
Figure 13.50 Beach artist, Agadii~ !M orocco - an examp!le of
Figure 13 .48 Economic Ieakages i1nformal-sector empiloyment

However supporters of the development potential of

1 Environmental impact
tourism argue that: The type of tourism that does not destroy what it sets
tourism benefits other sectors of the economy; out to explore has come to be kno,vn as fsustainable'
providing jobs and income through the supply chain; (Figure 13.51). The tenn comes from the 1987 UN
this is called the ulti lier effect (Figure 13 .49} Report on the Environment, which advocated the kind
because jobs and money multiply as a result of of development that meets present needs without
tourism development compromising the prospects of future generations.
it is an important fa..ctor in the balance of paym~nts of Following the 1992 Earth Summit in Rio de Janerrom the
many nations 1NTTC and the Earth Council dr~w up an environmental
it provides govem1nents with considerable tax checklist for tourist development, which included waste
revenues minimisation, reuse and. recycling] energy efficiency and
by providing employment in rural areas) it can help to water management. The WTTC has since establish ed a
reduce rural-urban migration more detailed programme called 'Green Globe~ designed1

a major tourism dlevelopm.e nt can act as a. growth pole, to act as an environmental blueprint for its members.
stimulating the ec.onon1y of the larger region
it can create openings for small businesses :in which
start-up costs [Link] baniers to entry are generally low
it can support many jobs in the informal sector where 1

money goes directly to local people (:Figure 13.50).

--
~ stab lishment of
if- ---.....L hote[5 and other
I
Ex;pa nsi on of loca Ii
tourist f [Link] l'iti:es

I hnprovement of l
job opportunities
and population L physical and cultura l
infra stuctu res

~
Irnfl ow of business
Wigner busi n,ess
and ca-p j,t aI to a,nd persona·! tax
satisfy inc re ~:se d base increases
~ocal government
tocal demand Figure 13.51 Eco-frriendty reusab1e water bottle introduced by the
spending power
expedition ct,urse shiip Catedonian Sky

Subst:mtia~ rise
.1n per person The pressure group Tourist Concern defines sustainable
5
incomes tourism as Tourlsm and associated infrastructures
that: operate within capacities for the regeneration and
Figure 13.49 llhe multipUer effect of tourtsm future [Link]; of natural resources, recognise the

13. 3 The development of international tourism Ill

contribution of local people and their cultures~ accept Positive environmental impacts
that these people must have an equitable share in the The environmental impact of tourism is not always
economic benefits of tourism and [Link] guided by the negative. Landscaping and sensitive improvements to
wishes of local people and communities in the destination the built environment have significantly improved the
[Link]. This definition emphasises the important issues of overall quality of [Link] areas. On a larger scale tourist 1

equity and local control which [Link] difficult to achieve for

1 revenues can fund the designation and. management
a number of reasons: of protected areas such as national parks and national
forests.
Govemments are reluctant to limit the number of
tourist anivals because of the often desperate need for
foreign currency. D The life cycle model of tourism
Local people cannot compete with foreign Butler's model of the evolution of tourtst areas (Figure
multinationals on price and marketing. 13 .53) attempts to illustrate how touris'm develops and
It is difficult to force developers to consult local people. changes over time. In the first stage, the location is
explored independently by a small number of visitors.
Negative environmental impacts ].f visitor impressions are good an.d local people perceive
In so many LICs and MICs, newly·laid golf courses have that real benefits are to be gained, then the number of
taken land away from local communities while consuming visitors "Will increase as the local community becomes
large amounts of scarce freshwater. It has been estimated actively involved in the promotion of tourism. In the
that the water required by a new golf course can supply development stage, holiday companies from HlCs take
a village of '5000 people. In both Belize and Costa Rica, contra] of organisation and management, ,qith package
coral reefs have [Link] to allow for unhindered holidays becoming the norm. Eventuall~ growth ceases
watersports. Like fishing and grazing rights, access to such as the [Link] loses some of its fonner attraction. At
common goods as beach front and scenically desirable this stage, local people have become all too aware [Link]
locations does :not naturally limit itself. AE with overfishing problems created by tourism. Finally; decline sets in, but
and overgrazing, the solution to ~overtouristing' \Vlll because of the perc€?ived economic importanc~ of the
often be to estalblish ownership and charge for use. The industry efforts will be made to re-package the location,
optimists argue that because environmental goods such ~llhich if successful, may either stabilise the situation or
as clean ,vater and beautiful scenery are fundamental to
1

result in renewed growth ('rejuvenation]) .

the tourist experience] both tourists and the industry have
a vested interest in their preservation. That 'ecotourism'
is a rapidly growing sector of the industry supports tlris Rejuvenation
viewpoint-at least to a certain extent. ..
Education about the environment visited is clearly the Faclnties: saturated
key. Scuba.. divers in the Ras Mohammad National Park in Stag,nation ,,,.,,i Stab111sat1on
• t. t I

•/
I

I I f I I •i I
•j ' '

the Red Sea, who were made to attend a lecture on the ~

ecology of the local reefs, were found to be eight times less

•• .. ,~
I.D~clrn~
I

likely to bump into coral (th.e [Link] of two-thrrds -o f all Fa sh~onab re Con solidati·on
facilities;
damage to the reef) let alone dehberately to pick a piece.
i
g,row~ng'
Howev~ there is huge concern about the future of many
coral reefs; no more so than the Great Barrier Ree( vihich
receives 2nilllion visitors a year (Figure 13.52}.
~nvolvem em:
Exp to ration
1

Time
Source: Advanced Geography: ConcE)l)ts & Cases
l:)y." RGul nnes-s & G. Nag le (Hodder Educat1on. 1999), p..217

Figure 13.53 Butler's mode~ of ~he evolution of 1ounism i1n a reg:i,on

The model provides a useful summary of the stages

that a number of holiday resorts, particularly in the
Mediterranean, have been through. For example, it has
been applied to the Costa [Link] Sol and the Co·s ta Brava
in Spam. However~research has shown that it does not
apply well to all locations. Prosser (1995) summarised
Figure 13.52 The Great 18arrter IReef the criticisms of the modet

II 13 Global interdependence
 Doubts on there being a. single model of tourism,
development
Limitations on the capacity issue
Lack of empirical support for the concept
[Link] use of the model.
Also, it does not tnclude the possible role of local and
national governments in the destination country or
the impact of, say; a low-cost airline choosing to add a
destination to its network.

Figure 13.55 [Link] with a locall guide v•siting a First World War
cemetery at Ypres, Be1gium

• wilderness and ecotourism

• cultural/historic al interest (Figure 13.S5)
• medical and therapy travel
conflicVdark tourism
• religious tourtsm
working holidays
sports tourism.
Same aspects of special-interest tourism have now
Figure 13 .5 4 Hurgada on the Aed Sea coast of Egypt reached a very significant size. For example, one in every
twelve package holidays booked in early 2009 was for a
cnns·e .

Ecotourism
As the 1evel of global tourism increases rapidly; it is
1 Discuss 1he indirect econo'm~c benefits of tounisrn. becoming more and more important for the industry
2 Suggest how; by oaretut pfanning; you could min;11
mis e the to be responsibly planned, managed and monitored.
economic ~ eaJkage of a fore~gn ho~fday.
3 Rnd an example of the appUcation of ·the Bud er model to a
Tourism operates in a world of finite resources where its
particular destination1. Wr~e a bnef summary of the example impact is becoming of increasing concern to a growing
as a case study. number of people. At present, just over 5 per cent of the
world's population have ever travelled by plan~. However,
this is undoubtedly going to increase substantially:
e D Recent developments in international
tourism
Leo Hickman, in his book The Final can claims:
'The net result of a widespread lack of government
1

recognition is that tourism is currently one of the m ost

unregulated industries in the \Vorld, largely controlled
The growth of special interest (niche) tourism by a relatively small number of Western corporations
In the last 20 years, more specialised types of touris'm such as hotel groups and tour opeiators. Are they really
have become increasingly popular. An important the best guardians of this evidently important but
factor seems to be a general re-assessment of the supremely fragile global industry?' Hickman argues that
work-life [Link]:~t An in [Link] numb9r of people mast countries only have a junior m.inist9r responsibl9
are determined not t o let work dominate their lives. for tourism rather than. a secretary of state for tourism,
One result of this has been the development of niche which is what the size of the industry in most countries
tourisn1. Niche market tour operators have increased would justify.
in number to satisfy the rising demand for specialist Environmental groups are keen to make travellers aware
holidays, which include : of their destination footprint. They are urging people t o:
theme parks and holiday village enclaves ·t1y- less and stay longet
cruising carbon-offset their flights
heritage [Link] urban tourism consider slow travel, .
I

13. 3 The development of international tourism Ill

 Supporters of slow travel suggest that tourtsts shou1d touri 111. An example of ecotourism in Ecuador is
consider the impact of their activities both on individual considered below.
holidays and in the longer term too. For example, they A new form of ecotourism is developing in which
may decide that .evezy second holiday will be in their volunteers help in cultural and environmental
own country (not using air transport) . It could also conservation and research. An example is the Earthwatch
mvolve using locally run guesthouses and small hotels scientific research projects, which invite members of
as opposed to hotels run by international chains. This the general public ta join the experts as fully fledged
enables more money to remain mlocal communities. expedition members- on a paying basis, of course. Several
'Virtually ·e very aspect of the industry now recognises Earthwatch projects in Australia have helped Aboriginal
that touris·m must become more sustainable. people to locate and document their prehistoric rock art
Ecotoutism is at the leading edge of su tai 1able and to prese1Ve ancient rituals directly.

y : 8coto·unsrrr .iti'·, E·cuad.'cri(·

~c as-Ef·:Stu~_ '-'-. - .

1
Ecuador s trav~ and tounism indlus1r.y directly contr11buted in many other countries. The country's tourism strategy has
1.9 per cen1 to GOP in 2014i wrth the tota, travel! and tour~sm,
1
been to avad beccm1~ng1a mass-market destjrn ation and to
economy (djrecl and i1 ndirect) contnibuting S..3 per cent The market cqual'ity' and 1exclus~v~ty' instead, in as eco-fr~end~y a
latter amounted to $4702m~U1ion. The 118000 diirectjobs 1in way as possible. Touriist industry leaders were all too aware
the ~ndustry accounted for 1. 7 per cent of 101a, emp!oym ent, that a very l arge iirillux of v~sitors cou1 d damage 1he country's
wh,1e the total number of jobs iin the wrder traveil and tourism most attractive ecosystems and harm .ts ~m,age as a •green~
economy (338000) made up [Link] cent of totall e:mpl:Oy,ment. destiiri1ati on for environmentally conscious ~isrtors.
International tounism is Ecuador's third fairgest source
1
Ecotoudsm has he~ped to bring needed ~ncom,e to so:me of
of fo:reign ~ncome~ after the export of oill and bananas. The the poorest parts of the country. It has prov1ded ~oca~ peopte
number of viS1tors has ,ncreased [Link] i'n recent years r wJth a new alternative way of making a ~iving. As such, It has
bo1h to ·the mainland and to the Gafapagos Istands where reduc-ed human pressure on ecofogi:caUy sensitive areas.
Darwin conducted researdh on evo~ution. The m·aio:rity of The main geographical foclls of ,e cotoulliism has been ~n
tcunists .are drawr1 1:o Ecuador by its g1reat dirversity of flora and tile Amazon raiinfo:rest around Tena, whroh, has become the
1
fauna. The country conta~ns 10per cent of ·U1e world s plant main access po~nt. lhe ecotourism schemes in 1he :region are
species. Much oi the country is protected by natiionaJI parks usuaHy run by smaU groups oi indi1genous Outchua ~nd~ans
and nature reserves. (Egure 13. 5 6). The k1rdi genous movement in Ecuador is one of
As Vis;tor numbers began to rise, Ecuador was anxious not the sirongest jn South AmerEca.
to suffer the negabve exter11al1tues of mass touris1m evident

The Ou ich ua people 1Exch an ges of clo·~h ing or other Avoi1d any displays of When walktng in the rainforest
in sist 1hat all visitors persona,!· items with community aiffection. even wirth dose • do not touch any branches without
must abide by certain members [Link] 1not aHowed. Nor fr~ends. In, this community it [Link] carefulily first - they may carr,;
rules and regulations ar~ corn mu niity ·members is considered rude to hol'd ·thorns; dangerous ·insects or even snaltes
altlowe d to accept g~fu. nan ds or kiss i,n p ubJ ic:. • do not p u111 on bran eh es: or vines - they
may fall. on top of you.

If you need to go to the

toflet. and facilitles are
not immediately j'jr-,~

avail:able. go to the s1de tors should never

of the .tainforest track; off for a walk
never m or near a alone. It is easy to get
stream or Iake. [Link] in the ra [Link].

Always check ffrst before to"Uching

All rubbish, e.g. Do not enter peoples houses without pfalnts or an ima Is. They may cause a
empty bottles and b ei1ng invit~d in. Do not malk~ promi,s2s rash. or sting you. Do rnot co II ect pIarrts,
1

tube-s must be taken

1
you may not be able to keep. e.g . to insects or an,ima Is un~[Link] you have
away by visitors. se:nd back photos after the visit. perm 1ss1on.

Figure 13.56 Examiple of ecotounism1

II 13 Global interdependence
Galapagos islands at risk illlegial fishing of sharks and sea cucumbers ~s befieved to be
Illegal fishing, non-na we species and the demands of more than at an all-time hlgh.
160 ODO tourists each year threaten this irreplaceable ecosystem • The number of vistting cruise sh~p.s continues to ri1se.
and the people ·who depend on it for their food and livelihoods. • Therce are grrO\tVing concerns over the ~ncrease ~n non-native
species on the ~s1andls.
Source: INWF • There are i1nternal arguments wW11n the management
ln earlry 2007 the g·overnm,ent of Ecuador dedared the
I structure oi the national park.
Gallapagos lsfands at nisk, warning that ~sl1tor permits and • Controvers~alty, a hote1 opened on the islands 1n 2006.
flfghts to, ·the [Link] could be suspended. The Galapagos • In mid-2007 a UN delegation vjsited the is,a;nds to
1

~stands stradd~e the equa1or 1OOO krlometres off the coast of detenm1ine whether they should be dedared ~.n danger'.
Ecuador. AU but 3 per cent of the islands are a nattonal park. It woufd seem that the tourism carrying capadty of 1he
Rve of the thirteen 1is~ands are ~nhabited. Visitor numbers are
Galtapagos isllands has been reached or even exceeded. Yet
currendy 1·60 OOO a year and rising.
many more people wiH want to 'visrt tn~s uniique envkonment
The votcanrc 1slands can be visited an year round, but the ~11 the future. The ma1nag em ent of tou1
rists in the ~s~ands has
pertod bet'Jveen Ncve1mber and June is the most popul!ar. 8oat
evclved Wlth the ~ncreas,ng pressure of numbers. Howaver,
trips g eneraUy cost from £7 00 to over £2000. An addi~ona~
s-om-e rad~cal approaches are ~ikelly to be reql!llired in the
na1i:onal park entrance fee of £66 ts payab~e on [Link]~. Among1
~uture.
tl.e many attractions are giant torto:ises, rnaJnine iguanas and
bllu e-footed boobies.
iln signijng the e.m ergency decree to pro1ect the irs~ands, the
President .of Eouador stated: 'We are pushing for a senes of
actions to overcome the huge 1nsiitutionaJ1 envi1ron1 mental and 1 Wrae a ten bulJet-poJnt list on ecotourism in Ecuador.
soda! cr~s,s fn the isJlands'. 2 Why is 1here so much concern about tt)e threat from
The 1denttfrred prob1ems indude the fo~lowing: toudsm on the G~apag,os !stands?
The population has been increasing rapidiy, doubiin,g every
11 years. The total popu,ation was estimated at 40 OOO
in 2014. This ~s putting i1
1 ncreasrng pressure on 1
natural
resources and the dtsposal of domesti.c waste.

13. Them ag men of a

tourist des ina ion
. - . . ..

C~se _St~,dy.~. . .JarDeliC~=f:-

Jlamaica is the third fargest of the Caribbean 1
islands, and season, ·the numberr of forai,g n touns1s hes exceeded 1 mmi:on a
the largest Engl[ish-speak[ng ts~and in the Canlbbean Sea. It year, partly as a result 01 the s~gnit1ficant [Link] iin the amivats
i1s situated 145 k~ ometres souidh of Cuba a.n.d 965 kif:ometres of cruiise-ship passengers.
south af Rlorida.1 USA. Tourism in Jamaica (Figure 1'3..57} In 20141 Jamaica welcOITiled 2.081
millli,on stopover 'Viisitors!
orig1i1nated in the latter [Link] of 1he nineteenth century when along w~th 1 423 797 oruise visitors. Thrs gave a total of
1
a limited number of affl uent peopr1e many with medicall
1
1 3.5milllion vrsitors for the· year: Tourism s direct oontr~bufaon
condiUans, came to Jamamca to avo·id the cold W4rners in the to GDP in 2013 amounted 1o,JM$109 .3b1lltion, or 7.7per
1

UK and North America. Fig ure 13,.58 mustrates "the attractions

1
cent o·f the na.t,onal tota.1 (rab1e 13.7). Addingi andie i1ndl1rect
of Jaimaicats o1imate. The first tounst hote,ls were buUt in economJc lbenefms increased ~h•s figure to JM $364.8billion.
1

Monteg:o Bay and Port Antonio. The industry expanded after Direct employtiment rin the indust~ amounted to 82 OOO f1 per
the F~rst Wori d War ~th advances in transportation, although cent of total emp1oyment} but the overaU figurei which includes
it has been [Link] 1hat only a. iew thousand fo1reign tounists indirect employment, ~s over three times as ~arge {23.45per
Visited Jama.1ica each year ~n the 1920s. By 1938, the figure cent of total employment). For example"famners suppJy i ood to
had rnisen to '64 OOO, and by 11952 rt: had reached 104 OOO. the hotets and caJ~penters make furniture for the industry. ln the
Growth cont~nued i1n 1he foOowing1decadesr with 345000 most popular tourjst areas, the· level of re~rance on ·the jndus1ry
v~sitors irn 1966 and over 800000 ~n 1'982. S~nce 1he 19'87-88 ~s extre·mely high ;ndeed. c:{)

13.4 The management of a tourist destination II

 Montego Bay Car;bbean Sea
Marine Park
Negri/ Ocho Rios
Marine Marine Park
[Link]<

JAMAICA Port Antonio

Marine Park

Caribbean Sea

0
t 30km
Caribbean Sea

Source: IGCSE Geogf.¥)hy lnd ecfition. P. Gui nness 8i G. Nagle (Hodder Education. 1900) p.105

Figure [Link] Marine [Link] and natronal parks ~n Jam arrca 1

0~ d) 60.0

___ -,,,--_ ~------------------~~ 78jil

:ii

'i,
tn
a so.o
~ 40.0
ii
.!! n. 30.0
761.
20.0
10.0
74
0.0 ~ ~ w ~ oo rn c - N m ,tj-
· ,tj-
c o o a a o ~ - - - - ~

72 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0
N
Year
10 70 Source : WTTC T~vel & Tourism [conomic Impact 2014

Figure 13.59 Jamaica - foreign Viisltor ·e ~orts as a

5 -68 percentage of total expo:rts

Jail/'II Feb Mar Apr May Jun1 Ju~ Aug 5~ Ckt Nov Dec:
Month a5i
ii 18.0~
1-6.0
14.0
- Mjni temp(°() - Maxtempfq t:! 12.0
- Average temp fq - Predpkarioo (cm) &, 1OJ}
- Wet days t>0.11mmJ Avera,ge sunlrght 8.0
- Average wind speed {Beaufort) houlf'Slday
Daysw~thwost
6.0
- Rerative humid~ty {%1 4.0
2.0
Figure 13.58 Jamaica's climate

Table 13~7 The 1

importanoe of the travel and tourism industry to
~ i..o
LI'! co a,, 0 ..- N M
8N 8N 8N 8N 8N 8N
I',
,....
0
N
-- --
0.0-------------------------------------------------
0
N
0
N
0
N
~
0
N
~
~
N

the Jamarcan economy, 2013 Vear

Source: WTTC [Link] & Tourism ~conomic Impact 2014

e.r9r_::r:___J;~{~"E::j
I ~

~~-ty
I I

my
i

Figure 13~60 Jamatca -tourism as a percentage of ~he whole

economy ,GDP
GDP % of total 7.7 25.6
Employment 82000 275000
46.4per cent in 2013, but has rreadhed 50per cent in1he last
S'ource: From WJTC data
decade. IFlg,ure 13.60 shows the oontribution of the industry
Rgure 13.59 ill ustrates 1he 1mpo'rtance of forei:gn
1
to the who1e economy {GOP) for the same time period. The
vJsitor exports as a percentage of tota, exports fo:r the tourism industry aooouinted for over 11 per cent of total
period 2004-141 albng w~h the fore cast for 2024. It was in Jamaica ~n 2013.
investment 1

II 13 Global interdepende nce

 Jam,atca is an examp1e of a tourist area where 1here
1
About two-thirds of visitors to ~he is~and arrive by air.
has been dear ·evtdenoe of groMh and developm,ent. Jamaica is seNed by two kttemationali ai~ports: Nomnan Manley
The term growth refers to the 1 incirease in numbers! whi~e ~ntemationa1 in Kjngston and Sangster tntemational in Montego
1

devel pment refers to the expans~on of tounsm1acbvities IBay. There ts a p~vate jet centre in Montego Bay and four
such as the deveiopmenit of adventure 1'.ouri,sm and a.;erodromes seNing small earners for ~nter-i,srandl travet Oruise
ecotourism. As the tou11ist industry has expandedi ~ts iinkages passenger terminaJs are ~ocated in Odho IRklS, Montego Bay 1

with other industries have deve1 aped as welt But as 1ourrsm1 Port Antonio and Kingston.
develops rt also has an impact on the environment 1 and 1he While sun and sand are the main attractions of a ho1iday in
question of 1its sustainability comes 1o the fore. The careful Jamaica, "the isfand also has other attnbutesi induding1 dolphin
manag1ement of touris m can do much 1o mitigate the ~im pact.
1
parksl nature resentes , museums and gallferies. There 1s a
IManagem,ent techniques ~hat Jamai:ca has used iindude: w1ide variety of flora and fauna] with 252 species .of birds {27
are endem1ic)1 200 native speoJes of orchids, 500 speci:es of
t~ing to avoid the pltfaUs of mass 1ourism, such as the
true ferns and about 50 speoJes of oorall. There are excelJent
const1ruction of hi,gh-lriis e hotels
faoitities for a range of sports induding1tennis, go1f [Link] equestrfan
• creating nanonal parks, manine pa1nks and other protected actilVitires. JaJmaica's cuisine is an attraction for many VlSttors.
areas
There are many festivals and entertainment events during the
• promoting ecotaunsm and other envi1ronmentaUy [Link]
year oft:en ·featu ting Jama.~cas native mustc, irer:g:gae.
1
forms of tourism.
Among the ~s1and s protacted areas are ine Cockpit Country,
• enoourag1~[Link] touri1
sm1 1
HeUshfre Hills and Litchfiefrd Foresi Reserves. In 199'2, Ja:mafca s
• linlking the iprofrt:s of toutiism to sodal deve~op'men1: ~n the
first manne park, oovering115km~I was estabi!Shed in Montego
country.
Bay. The following1yearl the B1ue and .John Crow Mounta~ns
Jlarnatca 's north coast, ~th its pleasant weather and white- INat~ancd Park was estaJbrished on 780 kn,2 of ~ llderness that
sand beaches, is the centre of the island's tounist industry supports thousands of tree and fern ~eoies, rare ani1 ma1s
(F1igure 13.61 ). The mSJin resorts are Montego Bay, Geho Rk>s and 1insects, suoh as the Homerus S\NaUo\/1/taJI, tlie western
and Port Antonio~ although many tour1 ists also vis1t the capJtai hemisphere's ,arg:est butterfly. The Negr~ Marine Pamk was
dty~ Ki:ngston. Accom1modation vari:es between mode·m high- estal,lished in 1·998. Th,ese dectslons have been essentiia1 for the
1rise hotels, elegant d id -world st~e bumdi1ngs~vi1ltasl [Link] sustainability of the en!Vi ronm ent and the tourist ~ndustry itself.
and guesthouses. The 1 numb er of irooms avat'[Link] 1in Jamaica Jamaica wants to increase rts toui,jst business, but more poopte
1is approximately 30 OOO. Jamaica has a relatwely g,o od road wiill only vjsiit if the ph¥Sical ·environment retains its attraciions and
ne1work with Hjghway 2000 l1
1 i n~ng setUen, ents in the south dirverse attdbutes.
and the North Coasit Hrghway serving the north of the ~sland. The industry has brought cons~deralJle opportunitres 1o
Jlamai,ca's popullation although i1t has also had its probfen1:S.
1

Dur~ng1the 1 97Os] the Jamaican government i1ntroduced

'Jamai:canisat~n' pdides designed to attract n1uch-needed
foreign 1investrnent in toudsm. Polrdes inolu:ded co'mparative1ly
h~gh wages and spectal industry taxes ~hat went di1rectty ~nto
s·ociiall development, heafdtoare and ·education. These sectors
1
are often referred to by eoonom~ts as soft infrastructure'.
l~ owever, taunism has spunred the devetapment of vital ~ hard
1
iinfrastructure too, such as roads, tefecom1 munricat~ons, water
supp1y and a~rports. Jamaica has been dleterrn1i1ned to l,eanni
from the ~m,staJkes! of other countries and ensure tlhat the
populai~on wm g:ain real benefrt:s from 1he groMh of tourism.
Touri1sm11
is the largest source of foreign exchange for
Jamaica. The·revenue from1tounsm p]ays a [Link] part
in helpJng oentraJ and tocaJI g1overnment fund econom1rc and
social]pdjciies. Atso, as attitudes wi1
thin tl'le industry itself ere
changjng1, larger hote1s and other aspects .of the industry have
become more soc,allly consCiious. ·Cfassic examples are the
fund1ng of local soda! projects.
A paper on tourism1by the People's Nai~onal Party (PNP)
s1ated tiiat 'lhe m·oJmen1:um generated by the cunrent round
of iinvestmen1 in resort devetopmen1 has created an enormous
puU factor ~n tenms of [nvestor -conmdence. This has set the
stage for an even more pO\!\rerfull wave of investment ~n the
next 10 years.·
The Jamaica Toudst Board {JTB) js responsibfe for
marketing 1he country abroad. ~t has used Jamaica's status
Figure 13.61 A beach fringed w~th palm trees in Runaway 18ay
as one of the host countries for the 2007 Cr,cket World s)

13.4 The management of a tourist destination Ill

 Cup to g:ood effeot. Tihe J118 also promotes the posmve
aspects of Jarmaican cuhure. and the Bob Marley Museum rin
Kiingston has become a popular attract~on. Su1ch attracbons N 1,ll:\ Negri I
tI:1 Aerodrome
are an important a~dl 1n supporHng Jaima~ ea 's objective of
1redudng seaso:n,altity.
The high or 'w1interi season runs from1n1i d ~December to
f
O km 1
Bloody Bay
~

m~d-Apr~I. when hotel pr,ices are h~ghest The raEny season )JI{
extends from May to November. It has been est~mated that San dais i
25 per cent of hotel workers are ~aid off dur~n g the off-
season.
!~ )1/{

0
Jamaica's government is working to reduce the co
environmentaJ impact of toudsm. Fjgure 13.57 shows the Beaches ~
ioca1i1on of Jam,a~ca;s na·dona~ and rmar•ne parl<s. A fur1her
sio< sites have been identified for future protection. The
Long Bay Coupres I
I ).l.l/ )!J(
J1amaican governm1ent sees ·~ e desig1nation of the parks
Seasplash
bout ique hotel I Time Square-
as a posrtirve envi1ronm ental i1
m pact of tounsm. Entry fees
to the nationaj parks pay for conservat1ion. The des~re of
tourists 1o vis~t 1hese areas and the need to conserve the
envirot1ment to attract future tourisrtn drives the designation
Small-scale -
developme,nt ' Visitor Centre

~
~~

)!Li
and management process.
The m,a dne parks are attempting to, conserve the cora~ Great
~ Morass
reef envi1ro11m ems off the coast of Jama~ca. They are at
1
risk from1damage from overfish~ng~~ndustdaJ poUuti:on and
mass tourr:s,m. The Jam,ajca Conservadon and Development
1
Trust is responsible fo:r d1e 1
manag1ement of the nat~ona,
pari<sj wh~le the Natitonall Envi1ronmental Planning Agency I ~'c,S\ ENO RO~~
has overseen ~he govem1m1ent's sustainabte dlevelopm1ent NegriI
strategy s1i1nce 2001 . Centre
Rec:,la imed Iand
Negri I
Negd~ is a large beach resort town focated on ~he west coast
of Jamaica.. lihe towns deve'lopment as a res,o rt focatton
Figure 13.62 Map of INegnil
began duriing1the late 1 950s, atthough access to the area
proved difficult as ferries were required 't o, drop off passengers
in Negr~I Bay. forcing them 1o wade to sho:re. When 1he road
between Montego Bay and Neg1ril was improved in the early
1970s, it helped to increase Negril's position as a new resort of the shore lies a swamp called the Great Morass. amtdst
locat~on. A small airport was bunt for N!o:rth Arnerr,can winter which is ~e Royal Palm Reserve, with we~ands ~at are
toudsts. l=uropeans also cam,e ta INegnt and several hoteJJs protected. 11111990, the, Negri~ Coral Heef Preservation Sodety
were built to cater d~rect~y to those guests. F~gure 3.B2 shows (Egure 13. 63) was iormed a.s an NGO to address ongoing
some of the !largest hotells and the transport infrastructure of degradatton of the coral-reef ecosystem1. Th is was the
Negrill. precursor of the Negrill Marin,e Park, whrch was established
This stretch of coastfine arg;uab1y has the rsland s best in 19r98. Educat~ng peop1e about the -fragi'lity of coral reefs
beaches. Negr1rs beach has been rated as one of the top ten (Hgure 113. 84) and other endangered env~ronments i:s a oru:oial
beaches i1n the wodd by many travel mag~ines. To the asst aspect of sustainabrlity.

Figure 13.63 Negri! Cora~ Reef Preservation Society

II 13 Global interd epe nde nce

 Community tourism should 1involve tocai people in
dedston making and ownership.
The foca ll community sho,uld receive a fak sha,m of the
profits from tourism ventures.
lbu ir corn panies shou Id try to work with com,m un rti~s.
rather than ~nd~v~duals to avo:id creat,ng div~stons.
Tourism shouM he enviionmentaHy suS1ainable and not
put ex,oess pressure on nat ura~ resources .
Tourism should support tra~ltfona~ cultures. It shou~d
encourage people to value and respect the~r cultural
her~taige.
Where pos·i~bl e, tour operators. should keep groups
1

smaH to minimjse cultural and environmental impacts.

Toulf guides should brief to~r~sts on what 10 e·>QPect
and on appropriate behaviour before arriv~ng in a
commun~ty.
Local people should have the right to, say no to tourism1.

Source: Geography Review, J'anuary ;;mo'S. Phlliip Al[an updates

Figure 13.65 Prindptes of comimunlty-based tourism

Chal lenges ahead
However1 tounism has had its p robiem,s too. The behavjour
of some tounists dashes with the is~nd 's tradiitioina1 morals;
people have a negatirve image of Jamaica because of ~ts
!levels of v~olent crime and harassment; and despite the
Figure 1 3.64 Ca:ral rreef protecbon soeiiety si,gn recent ~nitia1ives of the Jamatcan government to pro1ect the
envkonment! much va~uab~e b1odriversny has akeady been
~ost. On a posroive note, Jamaica is one of the few Caribbean
Ecotourism and community tourism
tourist destiinattons tha1 has done r,ela1irverry well during itihe
1Ecotour1ism is a deve1qpjng sector of ~he industry wroh~ recent recession that has led to a decrease in vJsitor arrivaJls
for example; raft tr~ps on ~he Riio Grande nver increasing for the Caribbean reg1~on.
in popu1~arity. Tourists are taken downstream ~n very smam1 Wru~e Jamalca has ,undertaken severar inttiatives with
groups. The rafts~whtoh rety so!eiy on manpower, leave s~ng1ly regard to the sustainable developm,enit of tou1rism, the
wrth a s~gnirficant 1t~me gap between them1to m~1nimis,e any success of sudh ~n1itiat~ves has been m1iD<ed. A bodk entided
dtstorbance to ·t he peace of the forest . Ecotounsm fs seen as Barriers to Sustainable Tourism Development in Jamaica
the most susta~na.b,e form of tounis1 actwity on die ~s~and . published ~n 2007 no1ed ·t hat initjatives often ~acked adequate
[Link] e efforts are being1made to promote m,anag:em,ent and cohesion, and often had to work under
c ommunity tourism so tliat more money fi1lters down to significant finar1aiaJI constJrain1s.
the local 1peop~e and sman co:mmunibes. The Sustainable
Communities Foundation through To'Urism (SCF) prog1ramme
has been parti oufaldy active in centraf and south -west
Jama1ca. Co:mmun1ty 1ourism1(Figure 13.65) is seen as an 1 Wi~h tlie a~d of an at,as, describe the ~ooa:t~on of
~mportant aspect of pto.. poor o uri ~ m . Jarnaica.
The Astra Country llnn ~n Mandevi111e has been recognised 2 Produce a buUet-point analys~s of [Link] 13.58.
as a ptoneer hotel ,n community touidsm. Its work wi~h .9 Explain the location of the isjand's main resorts.
surround~ng communttlies has ~nduded: 4 Describe the transport i1nfrastrudure ,o f Jamarca. Why
ris thirs such an i1
m portant factor in ~e deve~opment of
• promoting bed and breakfast aecommoda.t~oni in private
touri1sm,?
homes
5 D~souss ~he i1mportance of tourism to ~he economy o,f
• training local g1uides.
Ja1ma~ca.
• deve!oping comimunity-based tourist attractions
6 What m,e asures have been taken to advance t he
• encouraging the devefo;pment of ~ocal suppliers.
sustak1abmty of touris,m on 1he ~s~and?
7 Br[efly discuss 1he development ofi eooto,udsm and
oomm1tn1ity tourrism in J1am1aica.

13.4 The management of a tourist destination II