Trade, balance of payments & globalisation
No country in the world can produce everything its people need, so countries buy and sell with one another — that is trade. In this lesson we build a clear definition of trade, learn the difference between imports and exports, and see why countries must join the world economy. We then learn to work out the balance of trade with real Namibian numbers, meet the wider balance of payments, and face an uncomfortable truth about the unfair terms of trade that keep many developing countries poor. Finally we define globalisation, weigh its opportunities and dangers, and name the practical strategies a country like Namibia can use to take its place in the global village.
By the end you should be able to (NSSCO Development Studies 9.1):
- Define trade (the buying and selling, or exchange, of goods and services) and distinguish imports from exports
- Describe the reasons for exchange and the need to integrate into the world economy: no country produces everything, specialisation, and earning foreign currency
- Define balance of trade (exports minus imports of goods) and balance of payments (all money flowing into a country against all money flowing out)
- Explain the effects of trade on the balance of payments, including price fluctuations for LEDCs exporting raw materials, balance-of-payment problems such as deficits and debt, and the search for a new, fairer economic order
- Analyse the broad pattern of international trade between developing countries, NICs and developed countries, and the unfair terms of trade
- Define globalisation
- Describe the growing significance of the globalisation of trade and investment, with the opportunities and constraints for LEDCs and MEDCs
- Name and explain strategies an LEDC such as Namibia can use to join the global village: infrastructure, human resource development, international exposure and attracting foreign investment
Miss Catherine and Mike talk through the whole topic — with the figure and working drawn live.