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:
“I complacently accepted the social order in which I was brought up. I probably would have continued in my complacency if the happy necessity of self-support had not fallen to my lot; if self-support had not deepened and widened my contacts and my experience.”
—Mary Barnett Gilson (1877–?)
“Undoubtedly if we were to reform this outward life truly and thoroughly, we should find no duty of the inner omitted. It would be employment for our whole nature.... But a moral reform must take place first, and then the necessity of the other will be superseded, and we shall sail and plow by its force alone.”
—Henry David Thoreau (1817–1862)