1. Submitted to:
ISBR Faculty
Submitted by:
Yash Bodane

2. TRADE V/S AID
Developing countries are the ones where
economy is in the growing stage. In these
countries people are in need of products
and services and the demand is increasing
day by day. And in the era of globalization,
purchasing power of people has increased
so any new product or service launched
will be in high demand in developing
nations.
Aid has often come with a price of its own
for the developing nations:
Aid is often wasted on conditions that the
recipient must use overpriced goods and
services from donor countries.
Moreover in a nation like India where there is
a huge population with different cultures the
demand s also vary a lot. So any big firm
whether its automobile sector or electronic
sector will certainly have consumers lined up
for there products to get sold.
Most aid does not actually go to the poorest
who would need it the most
Hence trade is certainly necessary not only for
enhancing development of these countries
but also for increasing the living standards of
people. Not only that the firms will also get an
extremely good market to invest which will
also enhance there trade and increase profit
levels.
Aid amounts are dwarfed by rich country
protectionism that denies market access for
poor country products, while rich nations use
aid as a lever to open poor country markets to
their products Because if a country is given aid
the country will never grow, it will never
become a self dependent country it always
need to beg before the other countries for
their needs and after all it will still remain as
developing country.

3. 1.Trade can help boost development
and reduce poverty by generating
growth through increased commercial
opportunities and investment, as well
as broadening the productive base
through private sector development.
4. Trade facilitates export diversification
by allowing developing countries to
access new markets and new materials
which open up new production
possibilities
2. Trade enhances competitiveness by
helping developing countries reduce the
cost of inputs, acquire finance through
investments, increase the value added
of their products and move up the
global value chain
5. Trade openness expands business
opportunities for local companies by
opening up new markets, removing
unnecessary barriers and making it
easier for them to export.
3. Trade encourages innovation by
facilitating exchange of know-how,
technology and investment in research
and development, including through
foreign direct investment.
6. Trade creates employment opportunities
by boosting economic sectors
that create stable jobs and usually
higher incomes, thus improving
Livelihoods.

4. Well, There is a big debate on the
topic “Developing countries need
trade, not aid.” Before coming on a
harsh decision, Firstly, lets see the
inflow and outflow, and benefits of
global trade of the top 5 developing
nations:- China, India, Russia,
Brazil and Indonesia.
Trade is better because that makes a
country realize and explore its own
potential, it gives the country a sort
of Independence which every
country seeks. It brings a
developing country and a developed
country closer, it abridges the gap
between them, which thereby
results in an healthy and peaceful
relation.
FDI In Top 5 Developing
Countries ($ Billions)
32
280
55
71
19
1093
Trade also contributes to economic
development, and other countries
learn to value you.
India
China
Russia
Brazil
Indonesia
Others

5. Official Development Assistance (ODA)
Official development
assistance (ODA) is a term
coined by the Development
Assistance Committee (DAC)
of the Organization for
Economic Co-operation and
Development (OECD) to
measure aid. The DAC first
used the term in 1969. It is
widely used as an indicator of
international aid flow. It
includes some loans.
Net official development assistance (ODA) per capita consists of disbursements
of loans made on concessional terms (net of repayments of principal) and grants
by official agencies of the members of the Development Assistance Committee
(DAC), by multilateral institutions, and by non-DAC countries to promote
economic development and welfare in countries and territories in the DAC list of
ODA recipients.

6. In international relations, aid
(also known as international
aid, overseas aid, or foreign
aid) is – from the perspective of
governments – a voluntary
transfer of resources from one
country to another. Aid may be
given by individuals, private
organizations, or governments.
Standards delimiting exactly
the kinds of transfers that
count as aid vary. Types of
provided to the unprivileged:
1. Emergency Aid
2. Development Aid
As shown in the map, The top 5
countries donating foreign aid
are well-developed and full
fledged in various other trade
activities.

7. Statistical studies have produced widely
differing assessments of the correlation
between aid and economic growth, and
no firm consensus has emerged to
suggest that foreign aid generally does
boost growth. Some studies find a
positive correlation, but others find
either no correlation or a negative
correlation.
Think of it from other perspective.
If you ask someone for help(aid)
he will be ready to help you once
or twice or thrice and then
ultimately he will say no to you.
Similarly we a developing country
can not go to other countries for
help always. However if they
provide us with some sort of
TRADE, then we will not be that
much dependent on other
countries and it will also help us
rise globally and financially.

8. Final View:
Trade is opportunity for growth. Liberates economy. It Earns on Assets, and will
make developers self sufficient and pave way to explore their potential.
Developing countries definitely needs trade from the neighboring and other
developed countries. This helps in increasing the economic conditions and it
develops a good bondage between them. trade is most essential parameter for a
developing country. If we become familiar with the trade of super power then in
future we can develop ourselves by our own and if we inclined towards aid. If
today we hanker after developed countries for aid somehow in the coming future
we would be dominated by them.
In the end concerning the developing countries like India, China, Brazil these
nations need both trade and aid in fair amount. Trade has huge limitations
based on the availability of resources and skilled workforce. And it would take a
long time to generate profit from trade and again all such profit is vulnerable to
function in the market. So trade alone can’t help a nation progress.
The aid is equally necessary, aid for health, military aid and infrastructure
supplements like growth of any developing nation which they could not afford
from the revenue alone.
Thank You.