Trade has been one of the most significant factors that have facilitated rapid development and modernization of developing/third world countries. In third world countries, trade started long time ago and has developed significantly since then up to now. Trade has also led to development of improved infrastructures in these countries. Hence, this paper is aimed at analyzing and discussing how development of trade in developing countries and its impact on these countries.
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Trade refers to the ac t buying, selling, or exchanging goods and services at either retail or wholesale within a country or between two or more countries. There are two types of business domestic and foreign trade. Developing countries also referred to as third world countries refers to countries with low economic development levels although this is normally related closely with the social development in terms of life expectancy, education, healthcare, among others. Trade has contributed significantly towards improvement of these social developments in these countries (Buffie, 2001, 88).
Development of trade in developing countries
Page (1994, 42) asserts that in developing countries, trade started long time ago with long distance traders. Traders used to walk long distance exchanging goods for goods. With the arrival of foreigner including Arabs, Portuguese, among others, quality of goods exchanged started to improve with glassware, guns, among other goods being exchanged. With arrival of colonialists, trade developed immensely and currency was invented. With invention of currency, trade developed easily and rapidly since currency was easy to carry and use (Rajapatirana, 2000, 23).
Factors that facilitated trade in developing countries
According to Odell (2006, 110), in developing countries, there are many raw materials and minerals. These are therefore some of the main factors which facilitates trade in this countries. Foreigners come to these countries with an objective of buying raw materials or fields which have these materials. Availability of raw materials also led to develo0pment of industries which are main source of trade (Bown, 2009, 211).
Impacts of trade on developing countries
Trade led to emergency of big trading centers in the developing countries. It also led to emergency of huge urban centers in theses countries. Trade led to improvement of road transports in these countries since trade routes were modified into modern tarmac roads (Kufuor, 2004, 77). On the negative impact, trade led to colonization of third world countries with whites who were looking for minerals and other raw materials. It also led to emergency different social classes with rich trade merchants making upper class.
In general, trade is one of the most significant factors in developing countries. It has facilitated and improved the rate at which these countries are developing. Trade has also facilitated rapid development of other sectors such as transport and communication in developing countries. Hence, all government in developing countries should come up and give trade first priority and implement rules and regulations that will govern trade and trading activities in their respective countries. By doing these, they will be in a good position to develop faster.
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