Reasons why developed countries dominate global trade

1. Reasons why developed
countries dominate global
trade If you study world history, you will see that European nations have
had some advantages which helped them to industrialise earlier than
developing countries.
 Through slave trade and colonialism, European countries were able
to get raw materials cheaply from Africa, Asia and South America.
 During slave trade European nations took strong people from Africa
to work in their plantations in South America.
 After harvesting the crops were taken to Europe to be used as raw
materials in their home industries.
 Those large amounts of raw materials helped Europe to achieve
industrial revolution

2. Reasons why developed
countries dominate global
trade cont.
 When slave trade was abolished, European nations
colonised developing countries.
 They took over control of such countries and set up
plantations and mines there to continue to extract raw
materials for their home industries.
 Their industries continued to grow because their
colonies provided ready markets for manufactured goods
as well as cheap raw materials.

3. Reasons why developed
countries dominate global
trade cont. There are clear trade links between countries. Developed
countries trade with other developed countries as well as with
developing countries.
 Developing countries also trade with other developing
countries.
 Developed countries can trade with each other manufactured
goods such as cars, electronic goods and machinery.
 They can also get raw materials not produced at home due to
a number of factors from other developed countries.

4. Reasons why developed
countries dominate global
trade cont.
 Generally speaking, developed countries are much more
successful as they concentrate mainly on manufactured
goods.
 This has a number of benefits that include the following:
 Prices for manufactured goods are high so the economy
grows, meaning that the country becomes wealthier.
 Prices for manufactured goods do not fluctuate because
there is a readily available market for them.

5. Reasons why developed
countries dominate global
trade cont.
 Developing countries can also trade amongst themselves
as mentioned earlier on.
 Developing countries are the main producers of raw
materials (commodities) such as minerals, tea, tobacco,
coffee and sisal.
 Most countries in Africa are well known for one or two
commodities, for instance Tanzania is famous for sisal,
Malawi for maize and tobacco, Botswana for diamonds,
Ghana for cocoa and others.

6. Reasons why developed
countries dominate global
trade cont.
 Developing countries tend to concentrate more on production
of raw materials as opposed to manufacturing.
 They were set by colonial masters to concentrate on raw
materials and it is difficult for them to change the situation.
 They have the climate and soils that favour production of
these raw materials and very few industries for manufacturing.
 Concentrating on production of raw materials alone is not
very healthy for a country's economy as prices of raw
materials fluctuate a lot and prices of raw materials are low.

7. Reasons why developed
countries dominate global
trade cont. Developing countries can also trade amongst themselves.
 Most of the time developing countries buy primary products from other
developing countries such as food and raw materials, which they cannot produce
at home.
 That is, they trade in primary products.Sometimes developing countries buy
manufactured goods from other developing countries, which have started to
industrialise.
 From 1960 some developing countries have started to industrialise, and as such
export manufactured goods to other developing countries that have not yet
industrialised.
 For example, South Africa has made progress towards industrialisation and is
able to manufacture cars and machinery which other developing countries such
as Botswana and other SADC countries buy.