One of the most powerful benefits of fair trade is its ability to create sustainable economic models that lift developing countries out of the cycle of poverty and dependency on foreign aid and charity. Fair Trade Connect promotes empowerment and not just charity.
By its nature, charity is given at the discretion of the haves. In many cases, those who donate to charity do not know or do not ask whether their charitable donation is actually helping its recipients. Much has been said about the “blessedness of giving” but what does this mean for those who receive? The recipients of charity cannot know from one year or season to the next whether the benevolence of donors will continue. If charity is combined with paternalism and short sighted methods of delivery, the result can be a cycle of dependency where the recipient is never able to become self-sufficient and the root cause of the need for charity is never confronted.
Aid is needed and should be used to address acute poverty as a result of natural disasters, war, or population displacement. International aid is given from governmental agencies as well as non-governmental organizations (NGO’s). While governments have the means to invest significant resources in aid, the funds are often attached to political objectives or provided in the form of loans. In many cases, the recipient country has no real way to repay the loans and falls deeper into debt and poverty. NGO’s are more likely to provide assistance out of more altruistic motivations, but are hobbled by a lack of financial resources and the need for constant fundraising. The lack of oversight of NGO’s can result in misuse of funds or simply misguided attempts to help that yield unintended consequences. For governmental and non-governmental aid to result in sustainable benefits, they must address the cause of poverty and not just the symptoms.
In a global economy, the grim reality is that the disparity between haves and have-nots is growing. This is not to say that globalization and international trade are the causes of poverty, but rather that they alone will not be the cure. In richer countries, economic systems are based on labor specialization and diversified systems of production and consumer spending. For these systems to work, a highly educated work force is needed as well as a legal and political system that protects the rights of individuals and financial capital. In poorer countries, economic systems are often based on subsistence farming or agricultural exports and entire economies have been based on foreign aid. The workforces in poorer countries usually need to compete by providing labor at a lower cost than other developing countries, creating a “race to the bottom”. These countries may also have repressive political and legal systems that discourage business investment.
In a system of international trade, the most economic benefit goes to those who sell finished goods and the least benefit to those who provide the raw materials. Unfortunately for the developing countries, they are most equipped to provide raw materials in the form of labor and commodity agricultural goods. Based on this economic reality, globalization and international trade appear to conspire against poorer countries in the supply chain.
An impasse has been reached with free trade and market economics on one side and charity and aid on the other. The fair trade movement has an opportunity to bridge this divide. By making an ethical decision to pay a premium for fair trade certified products, consumers can help workers and farmers in disadvantaged countries break out of the cycle of poverty and dependency. Certifying organizations provide consumers with confidence that their purchases are having the intended effect of improving the lives of workers and farmers. Fair trade allows collaboration that empowers consumers to move beyond charitable giving and empowers disadvantaged workers to lift themselves out of poverty. The result is the rarest of outcomes: an actual win-win.