USJP,SRI LANKA

1. DO DEVELOPING
COUNTRIDS NEED
TRADE
OR AID
GROUP7

2. CONTENT
 What is a Developing
Country ?
 What is Trade ?
 What is Aid ?
 Conclusion .
TRADE OR AID ? 2

3. A country with a relatively low standard of
living, undeveloped industrial base, and
moderate to low Human Development
Index (HDI).
Also called as Third World country.
E.g. Sri Lanka, Cuba, Nepal, India, Brazil .
What is a Developing Country ?
TRADE OR AID ? 3

4. Countries with less than
$1,035 GNI per
capita are classified as
low income countries
Countries with between
$1,036 and $4,085 as lower
middle income countries
Based on Data 2012
Developing
Countries
According to the “WORLD BANK”
TRADE OR AID ? 4

5. 1. Law standard of living.
2. High Dependence on Agriculture.
3. Under utilization of natural Resources.
4. Lack of Capital and Technology.
5. Lack of Basic Infrastructures.
6. Depends on primary exports.
7. Demographic Characteristics
8. Dualistic Economy.
Main characteristics of developing
countries
TRADE OR AID ? 5

6. Source: World Economic Situation and Prospects 2014
TRADE OR AID ? 6

7. “Activity or process of Buying ,Selling
or
exchanging Goods or Services ”.
 Trade is essential for satisfaction of human wants.
 Not only for the sake of earning profit; it also provides
service to the consumers.
 It enhances the standard of living of customers.
 Trade is a key factor influencing prospects for
sustainable and equitable growth among developing
countries .
TRADE
TRADE OR AID ? 7

8. Types of Trade
TRADE OR AID ? 8

9. deals with the exchange
and distribution of
goods and services made
for local consumption
TRADE OR AID ? 9

10.  Wholesale Trade :
Buying in large quantities from
producers or manufacturers and
selling in lots to retailers for resale
to consumers.
Retail Trade :
Buying in smaller lots from
the wholesalers and selling in
very small quantities to the
consumers for personal use.
 Export Trade : When a trader
from home country sells his
goods to a trader located in
another country, it is called
export trade.
 Import Trade : When a trader
in home country obtains or
purchase goods from a trader
located in another country, it
is called import trade.
 Entrepot Trade : When goods
are imported from one
country and then re-exported
after doing some processing,
it is called entrepot trade.
TRADE OR AID ? 10

11. I. Accelerate Economic Growth.
II. Facilitates export diversification.
III. Enhances competitiveness.
IV. Expands Business opportunities.
V. Creates employment opportunities.
VI. Encourages innovations.
VII. Benefits to Consumers.
VIII. support to own country and pay taxes to help own country.
IX. Products are often better quality and last longer in own
country.
X. If a product is made domestically, it doesn't have to be shipped
as far, saving money on shipping.
ADVANTAGES
TRADE OR AID ? 11

12. I. Long Term Process and Blow to Infant Industry.
II. Diversification of Savings.
III. Over Interdependence.
IV. Diversification of Savings.
V. Declining Domestic Employment.
VI. Additional Licensing And Other Taxes,
Regulations.
VII.Exhaustion of Resources.
VIII.Dumping.
Disadvantages of International Trade
TRADE OR AID ? 12

13.  Foreign Aid mean Economic , technical , military
aid given by one nation to another purpose of
relief and rehabilitation for Economic
stabilization or for mutual Defense.
 Aid may be given by individuals, private
organizations, or governments.
 The general aim of foreign aid is to provide in
each Developing Country a positive incentive for
maximum national effort to increase its rate of
growth.
AID
TRADE OR AID ? 13

14. Bilateral aid
Multilateral aid
Tied aid
United aid
Food aid
Technical Assistance
Grants
Soft loan
Hard loan
Project Aid/Assistance loan
Direct foreign investment
TYPES OF AID
TRADE OR AID ? 14

15.  Increase in Tax Revenue.
 To Solve the Problem Of Balance of payment.
 To raise the standard of living.
 Defense Modernization.
 Meeting Emergencies.
 Level of Technological Increases.
 Establishment of Modern Economic and Social
Infrastructure.
ADVANTAGES OF FOREIGN AID
TRADE OR AID ? 15

16. 1. Increase in Foreign Aid's Debt servicing.
2. Increase in Production Cost.
3. Habit of Dependence on Foreign Loan and
Misuse of Aid.
4. Do not pay attention for development of
technology.
5. Exploitation by Donor Countries.
6. Commodity Aid Discourages Domestic
Agriculture Output
7. Foreign Aid Does Not Improve Earning Capacity.
DISADVANTAGES OF AID
TRADE OR AID ? 16

17. “ Developing countries need Trade, not Aid.”
REASONS :
 TRADE is better because that makes a country realize and explore
its own potential.
 Only trade can enhance the economic growth of the country and it
also develops a better understanding between the nation.
 Aid is a short term desire while trade is the long term desire.
 Developing trade boosts the confidence and pride of people with
in the country.
It develops more entrepreneurs and generates opportunities for
job seekers.
Finally trade helps enhancing the productivity
and in turn the growth of the nation.
CONCLUTION
TRADE OR AID ? 17

18. TRADE OR AID ? 18