Structural Learning Week 1 - Global Inequality and Trade Injustice

Global Inequality and Trade Injustice by Beth Milburn:

Structural learning sessions are a feature of the ICS programme whereby one member of the team shares with the rest of the team about an issue to do with development that they are interested in.

I chose to do my session about global inequality and trade injustice because it is an issue I’m really passionate about and feel that it is not often spoken about, let alone explained.

I began the session by asking the team to play a game of higher and lower where they had to guess the answers the questions:

1. How much is international trade worth every minute?

- £5.9 million

2. The world’s poorest 3 billion people have the same amount of wealth as how many of the world’s richest people?

- 300

3.If African countries increased their share of world trade by 1% how much more money would they gain every year?

- £40 billion. (5 times the amount they receive in aid)

I chose these statistics because they illustrate the fact that: "Well-managed trade has the potential to lift millions of people out of poverty.”

BUT

There are many obstacles preventing this.

This short video clearly explains the issue of inequality and why disparities between countries continue to widen rather than decrease despite vast amounts of foreign aid being transferred.

(If you don’t have time to watch the video then this diagram shows the main point, which is what I love about the video.)

This is a clear illustration of the inbalance of the transfer of money across the nations.

There are three issues that rob developing countries of approximately £1170 billion every year: debt, tax avoidance and unjust trade rules. Although this diagrams differentiation into ‘developed’ and ‘developing’ country is rather crude – the diagram makes me angry and passionate, because if these issues could be resolved then developing countries would see massive development without the help of foreign aid. It’s not all about aid; these issues need to be tackled in order for millions of people to be lifted out of poverty.

For example, £3000 is lost from Africa every second due to corruption. We discussed to what extent governments vs Western companies can be blamed for this. Tearfund’s Unearth the Truth campaign contributed towards the European Union passing new transparency laws in June 2013 which means that European extractive companies have to publish what they pay. “This will make corruption harder, so poor communities have more chance of sharing in the wealth” (Tearfund, 2013).

We discussed Tearfund’s current campaign called ‘Secrets Out’ which is calling on world leaders to push for an end to corruption and increased transparency at the G20 this November. You can sign the campaign and find out more at: http://secretsout.tearfund.org/

We then discussed issues to do with trade. It was hard to fit this massive topic into a short space of time but I tried to give a brief overview of the main issues through looking at global value chains, tariffs, subsidies and dumping.

Firstly we looked at some of the reasons why those producers at the bottom of global value chains get such a small amount of money for their produce compared to those at the top such as retailers.

Secondly we looked at tariffs and subsidies: Tariffs are a form of tax paid on imports and exports. Subsidies are grants given by governments to help industries keep their prices low. This means that developed countries where governments can afford to give high subsidies can then export their farm crops at prices a third lower than the cost of production.

Tariffs and subsidies cost developing countries approximately £70 billion a year – which is twice as much as they receive in aid (Oxfam).

High subsidies lead to dumping which is when the subsidised products are exported to developing countries and sold at a lower price which out-competes the local industries and therefore is harmful to the development of that local economy.

Trade liberalisation and free trade are forcing the removal of protective tariffs which has led to an increase of dumping and damage to local economies. This is a current issue that needs addressing.

To end with we read some of Isiah 58 which is a biblical call to fight for justice to emphasise that we have a role to play in these issues too. We explored what we can do in response to this and these are:

1. Campaign

2. Pray

3. Shop ethically

This video then demonstrated to us that justice really is worth it...

So although this seemed like a really heavy topic from the outset, it was really good to break it down and explain  it briefly. I am passionate about these topics because trade has a huge potential to lift millions of people out of poverty, as does improvement in economic issues such as debt and tax avoidance. Although these are huge structural issues and inequalities in the world system, there is also hope. 

We all have a role to play in fighting for change, justice and  a fairer world.