Necessity
Countertrade also occurs when countries lack sufficient hard currency, or when other types of market trade are impossible.
In 2000, India and Iraq agreed on an "oil for wheat and rice" barter deal, subject to UN approval under Article 50 of the UN Persian Gulf War sanctions, that would facilitate 300,000 barrels of oil delivered daily to India at a price of $6.85 a barrel while Iraq oil sales into Asia were valued at about $22 a barrel. In 2001, India agreed to swap 1.5 million tonnes of Iraqi crude under the oil-for-food program.
The Security Council noted: "... although locally produced food items have become increasingly available throughout the country, most Iraqis do not have the necessary purchasing power to buy them. Unfortunately, the monthly food rations represent the largest proportion of their household income. They are obliged to either barter or sell items from the food basket in order to meet their other essential needs. This is one of the factors which partly explains why the nutritional situation has not improved in line with the enhanced food basket. Moreover, the absence of normal economic activity has given rise to the spread of deep-seated poverty."
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Famous quotes containing the word necessity:
“Were it not for the corruption and viciousness of degenerate men, there would be no ... necessity that men should separate from this great and natural community, and by positive agreements combine into smaller and divided associations.”
—John Locke (1632–1704)
“A short letter to a distant friend is, in my opinion, an insult like that of a slight bow or cursory salutation—a proof of unwillingness to do much, even where there is a necessity of doing something.”
—Samuel Johnson (1709–1784)
“To expect to increase prices and then to maintain them at a higher level by means of a plan which must of necessity increase production while decreasing consumption is to fly in the face of an economic law as well established as any law of nature.”
—Calvin Coolidge (1872–1933)