Exploitation

Exploitation

Income Gap

• Rich countries dominate world markets

• This makes it difficult for poorer countries to develop economically

• The income Gap– Colonialism– Trade– Debt

1. Colonialism

• Colonialism - Powerful ‘developed’ nations exploit/abuse/control weaker ‘less developed’ nations

• Colony – country controlled by another• Imperial Power – the controlling country• Empire = Controlling country + it’s

colonies

Ireland

• Colony of England

• Exploited by England1. Lost land – Plantations2. Trade profited England

Effects of Plantations

• Land -> English• Food exported to England• Profit -> England• English became rich• Irish remained poor

– Famine – food continued to be sent to England

Effects on Ireland’s Trade

• Ireland sold cash crops/cheap goods to England

• England sold expensive goods back to Ireland

• Trade benefited England• Irish economy depended on England• English Law – discouraged Irish industry

Elsewhere

• 1800 – 1900– Similar effects of colonialism took place in

Africa and South America– Spain = Portugal – S America– England + France - Africa

2. Trade

• South provides cheap/unprocessed and agricultural raw materials (cash crops) for North. (No food crops = food shortage)

• North sells goods to South at great profit

• South - Prices of raw materials keep falling

• South must produce more to earn same amount

CASH CROPS

• Many countries in South depend on only one export

• Ethopia – 71% Cocoa• Nigeria – 94% Oil• Somalia – 73% Cattle• Kenya – 92% Coffee

Coffee Producing Countries of the World

Coffee trade

• Latin America depends on coffee for income– Latin America produces the coffee beans– Exports all coffee beans grown– 1st World produces the coffee– 10% profit –> Latin America– 90% -> Processors + traders in developed

world– Coffee prices rise and fall

Coffee - how the money is divided up

Traders, 28

Processors/wholesalers,

25

Retailers, 20

Growers, 8

Coffee producing

countries, 19

Protectionism

• Gov’ts in North protect industry with tarrifs• Tarrifs make imported goods dearer than

home produced goods• Keeps South poor because many of their

processed goods are unable to penetrate markets in North

• South remains a producer (little profits)• North remains the processor (big profits)

Solution?

• Fair Trade• Export variety• Agreements on prices

Fair trade

Fair trade

Impact of Fair trade

3. Debt

• South in debt to North– Money borrowed for projects eg arms– Corrupt leaders

• South pays interest on debt– Gov’ts have little money for education, health

etc– Worst countries - African

Africa

• Each year per person

– $11- health– $23 - education– $22 – debt

• $40 million a day - debt