Need For Trade

Yamal is the fourth of six children of a poor family. There is little work available, but there is talk of big companies from abroad coming to a city near his village that will offer jobs. Yamal wants to travel to the city to see if he can find out more and maybe get a job. It doesn’t really matter what kind of job, as long as he is able to send some money home to his family to support them. His older brothers would also go and if any of them got a job it would be a boon for the family.

Why is there a need for international trade?

For developing nations the incentive that international trade provides for policy makers is the number of jobs that are created. Companies that incorporate or set up supply chains in developing nations bring investment with them. That investment is used to purchase capital goods and hire staff. Some of the capital goods are also acquired in the country further increasing employment.

Prem Textile Industry's garment dyeing factory in Tirupur, Tamilnadu India

Prem Textile Industry’s garment dyeing factory in Tirupur, Tamilnadu India

Through jobs people can earn their way out of poverty. Jobs provide not only money to purchase shelter, food, clothing and other necessities, but also self-esteem. Jobs provide less time to fall into bad habits such as alcoholism and crime, and gives people positive traits such as pride, identity, personal achievement and opportunities for socialising and development. This may seem an obvious and unsophisticated view of the world, but most working-age people in the developing world are looking for just such an opportunity for themselves and their children. It is the way in which international trade manifests itself that can lead to disastrous consequences, not international trade as a concept.

The stories were true and a big Western company did arrive in the city. But not to set up operations. Instead they were looking for a local partner, who would be able to supply them with cheaply made goods. It didn’t matter to Yamal, who just wanted a job, so he took a job with the company’s local partner. He earned enough to send some of the money back to his family hoping it would help them.

A few months later, Yamal went back to his village. He was not able to send a lot of money back to his family as his overheads were high in the city, and the pay was not as good as he thought. He thought it should help his family a little though. To his dismay, once he got home he found his father was drunk and his mother told Yamal that most of the money he sent back was used by his father to buy alcohol.

How can the poor help themselves?

To some extent the poor need to help themselves, which includes longer term thinking. This is easier said than done especially when many of the world’s poverty stricken are very ill-educated, steeped in traditions and superstitions, and have little in the way of reliable advice from trusted sources.

In Tirupur (India), we saw a number of people living in appalling slums. However, when the local government attempted to help by building new buildings so that those people could live in more suitable accommodation unintended consequences made things worse. The people were offered newly built, basic apartments, which they took and lived in for a period. Shortly after they rented out the apartments and returned to the slums using the rental income to feed their alcohol addiction. With the same people living in the same appalling conditions, but now with greater access to alcohol and drugs, it is easy to see why some government officials despair.

It is clear that solutions are not easy to find and oftentimes there is a trial and error process that needs to be followed, as there is no silver bullet and there are few clear indications on how problems that are deep seated, numerous and wide-ranging can be solved. What is clear is that people who find themselves on the wrong side of the poverty line need to be involved with any solution. Communication and education will go hand in hand with any grass-roots solutions that are to be found. Top down approaches, however well-intentioned, still need to be executed considering the realities faced by those implementing policies.

Yamal continued to send money home, but before he left he told his father he was not going to send anymore back, as he was just drinking it away. He hoped his mother would keep the money a secret and save it or use it when necessary for the family. Maybe to help in case of a healthcare emergency.

Yamal’s mother was not able to keep the money secret. In a village very little stays hidden, and people are always gossiping. Yamal’s father found out about the money, and continued his drinking ways. Yamal stopped sending money home because he heard his father was still drinking, but this left him with a dilemma: his father may cut him off from his mother and siblings. In a country where family traditions trump an individual’s ability to transform the family’s fortunes, it would be difficult for Yamal to resist his father’s wishes for long.

What can the government do?

First and foremost the government needs to educate its people. Education not just in the traditional sense of literacy, numeracy, etc. but also in understanding everyday living processes that better educated families take for granted. From basics such as hygiene and the importance of formal education to access-granting issues such as how to use banks, the Internet, etc., poorer citizens need to come a long way to benefit from opportunities that may be available to them.

India, Tamil Nadu, Tirupur , women work in fair trade textile factory, production

India, Tamil Nadu, Tirupur , women work in fair trade textile factory, production

Second we would suggest that governments need to look at policies that break addiction cycles, e.g. alcohol and drug abuse. People in India we have talked to say that a whole generation has been lost to addiction and once better policies are in place it still may take 2-3 generations before abuse can be reduced. Reports regularly cite addiction statistics of between 60% to 80% of the Indian working-age population. Without serious consideration to the uses of funds that are generated from new jobs, the process of creating jobs in itself will not stop poverty.

Finally, we would suggest the government needs to address the distribution of wealth that is created from international trade. This can be done through tackling corruption, increasing minimum wages to a more liveable wage, and reducing the red tape that reduces productivity.

Obviously there are a myriad of other problems that policy makers are faced with such as poor working conditions, slavery, pollution, inadequate infrastructure, etc., and these also need to be solved. We cite the above three issues as inhibitors to the top-down approaches that developing nations take to poverty eradication. Without addressing these inhibitors, the other problems are likely to persist.

Yamal met a social worker in the city and asked him to come to his village to talk with his father, to explain to his father more productive uses of the money Yamal is sending home and the detrimental effects of alcoholism not only on his father, but to the family. The social worker went to the village with Yamal, but Yamal’s father was not in a mood to receive him. The social worker said he would try again another time, but he knew he already had backlog of work in the city let alone trying to expand to the surrounding villages.

Yamal started sending money to his mother again. He knew his father would take the lion’s share for his drinking problem. Some of his brothers also started drinking heavily, as they had no work and there is little to do in the village. When he could, Yamal tried to get the social worker to come out to the village and educate them about how to make more productive use of the money and their lives. Little worked, but Yamal still has hope.

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About the Author

Valentina is passionate in expressing her voice through her writing, which she hopes will have a social impact. She grew up as a third culture kid that always fought for what is right and achieved a BA Hons. in International Business in order to understand the business world more clearly and leave a possible mark on society. Currently she is working for an ethical start-up company called Chanzez. Chanzez has been set up to provide people with chances whether they are people who design clothes, people who work to make clothes or people who want to be able to buy ethically produced clothes.

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