Trade and Aid

The prices of primary products are less stable than the prices of manufactured goods, which means that LEDCs lose out when prices are low.

MEDCS can help in two ways - by increasing trade with LEDCs or by sending aid. Workers in primary industries in LEDCs are often low paid and have very poor standards of living. Fair trade can help these people towards a better life. A fair trade agreement sets minimum standards for the pay and conditions of workers in LEDCs but unfortunately, the idea is not widely enforced or practised but is slowly increasing. One problem with this is that fair trade goods in MEDCs are often more expensive and consumers will often choose the cheaper versions.

Aid takes many different forms. Emergency aid is money, goods and skilled people sent to a poorer country after a natural disaster. Charitable aid is sent to LEDCs by charities like OXFAM and Comic Relief and is a form of long-term aid (also called development aid). This helps to improve the lives of local communities by providing things like clean water and schools - something that we take for granted in an MEDC. Other long-term aid is delivered by other organisations who raise money from both the public and businesses. Often, this long-term aid is linked to sustainable development.

Conditional aid is also called tied aid. This is aid given to a country but with certain conditions attached. A common example used by geography teachers is the building of the Aswan Dam in Egypt. Russia gave Egypt large sums of money so that they could build the dam, in return, the Russian military was allowed to have unlimited access to Egyptian airfields. Finally, the governments of MEDCs also give sums of money to international organisations like the World Bank and World Health Organisation who decide where to give aid.This type of aid is called multilateral aid.