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Hamilton College

Publication Date

Fall 2009

Program Name

Nepal: Social Entrepreneurship in the Himalayas


The discipline of Development studies has gone through an evolution of changes in its relatively short time in existence. It has, among other things, left a legacy of vocabulary that is used to define many international interactions. Ideas of the colonizing first world juxtaposed against the colonized third world have given way to notions of an industrialized West and North comprised of developed nations and a backwards East and South made up of developing countries. Colonialism in the age of Imperialism left power and economic disparities across the world. The trends of colonial empires where the colonizer benefited from the exploited labors of the colonized did not vanish when imperialistic governments left their respective countries. The remains of this system of exploitation can be seen in modern global economics.

It is reductive to say that these are the only roles played by the groups but as it stands, the North and “West” portions of the world tend to do most of the consuming, while the South and the “East,” while consumers themselves, are overwhelmingly more involved in the production of goods than the North and “West.” China, Ecuador, Malaysia, India, and Puerto Rico are only a few of the many nations the tags on my clothes sport right now. Although I grew up reading those tags and then running to the globe to see where my clothes had come from, it is not often that the West really considers the manner in which the many things that fuel our culture of consumerism are made.

As a reaction to this trend, an idea called alternative trade appeared in the 1940’s. It was a different way to look at the relationship between the industrialized North and West, and the exploited the South and the East. It saw a need for the redistribution of wealth, a balance across the globe, and sought to create such a balance through a different type of producer/consumer relationship that did not depend on exploitation to make it run. In the ensuing years, this idea took on a practical application, now better known as fair trade (WFTO, 12 November 2009).

Since 1946 when the first crafts were brought from Puerto Rico to the United States to be sold in the name of this new producer/consumer relationship giving market access to those who otherwise would not have it, thousands of organizations have sprung up to become part of this trend of conscious consumerism. In 1989, the need for a global organizational body was recognized and the International Fair Trade Association (IFAT) formed to serve as a body for coordination between producers, consumers, support organizations and regional or local coordinating organizations. With over 350 member organizations, IFAT, or as it was renamed in 2009, the World Fair Trade Organization (WFTO), boasts the largest international membership of any fair trade group in the world and has become a leader in fair trade promotion and visibility (World Fair Trade Organization, 13 November 2009).

Though many organizations have definitions of fair trade, the WFTO definition has become the most recognizable. It says that fair trade is “trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers—especially in the South. Fair Trade Organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.” The ten standards of Fair Trade, with which each member organization must comply, provide definition for these ideals. This list includes stipulations about labor conditions, gender equity, environmental considerations, and transparency to name a few. These same ten standards also serve as the monitoring system for membership in the WFTO (World Fair Trade Organization, 10 November 2009).

As well as its international network, the WFTO also has regional and local member networks. Nepal is a member of networks on both of those levels, the regional WFTO-Asia forum and its own national Fair Trade organization called Fair Trade Group Nepal, or FTG Nepal. Both of these networks have been helpful in the growth of fair trade in Nepal, and recently FTG Nepal has been recognized for its outstanding work in cooperation between member groups for the promotion of Fair Trade here (Sainju). This paper aims to frame a part of the situation of Fair Trade in Nepal, looking at its impact on culture and national development. Nepal as a country is rich in cultural tradition, but because of rampant political instability has been unable to provide basic necessities of life for many of its citizens. Fair trade could be helpful in addressing some of these needs. But what does fair trade really mean? How can it be sustainable? Is it doing everything it is intended to do in a good and “culturally appropriate” way? Are all of its intentions what they should be? As with all programs meant to aid in development, fair trade has flaws, and a critical analysis of fair trade and its impact on and in Nepal is needed to address them along with the positive progress it has made in the cultural context of Nepal.


Economic Policy | Economics | Growth and Development | International Economics


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