Question

Explain trade problems that developing countries deal with. Please use a example from within the past year which explains the difficulty a nation currently in the development stage would face during the process of becoming a trade partner.

Answer 1

The general problems that face by a developing country are:

1.Distance

2. Transportation

3. Export and import restriction

4. Preference and taste of foreign consumers.

5. Lack of information

6. Study of the foreign market.

Now if we will take some of the problems are a developing country like Ghana who's TDI(Trade Development Index) rank is 96 with a score of  412 in 2006 has to face some of the problems associated with international trade. we can take example of Ghana as a fastest growing country and how its international trade been affected.

Problems faced by developing countries:

1. primary goods export which will not give a good return.

2. Unfavorable terms of trade as it has no weightage in the field of trade.

3. more import the export in the name of development.

4. fast-growing imports and sluggish growth in its exports resulting in a growing deficit in its balance of payments position.

5. Low reserve of foreign exchange

6. Deep depreciation in the value of money

7. High dependency on capital and technology, which is burdensome.