8. How developed countries try to help developing countries Flashcards
What is the IMF?
The International Monetary Fund is a global organisation founded in 1944. It aims was to help stabilise exchange rates and provide loans to countries in need.
- International Monetary Cooperation
- Promote exchange Rate stability
- To help deal with Balance of Payments adjustment
- Help Deal With Economic Crisis by providing international coordination
What is the World Bank?
The World Bank is an international organisation that fights poverty by offering developmental assistance to middle-income and low-income countries.
By giving loans and offering advice and training in both the private and public sectors, the World Bank aims to eliminate poverty by helping people help themselves.
What is GPI?
GPI stands for GENUINE PROGRESS INDICATORS.
The GPI measures the improvement in economic welfare – costs associated with growth.
- Value of voluntary work and unpaid work.
- Value of leisure time
- Distribution of income
- Impact on environment
- Environmental standards
- Cost of crime
What are the differences between GDP and GPI?
GDP doesn’t take into account negative externalities of growth.
GPI focuses on a wider measure of economic indicators, it encourages policy makers to think in broader terms of economic welfare and not just crude GDP statistics.
GPI encourages long term planning
GDP only measures output – not how it actually effects people’s living standards and how it is used in society.
What are the disadvantages to GPI?
Many non-economic variables such as value of leisure time / environment are very subjective and it can be difficult to assign an economic value. GDP is simpler and gives less normative results.
Not useful for judging state of business cycle.
What are the differences between HDI and GPI?
GPI takes into account environmental factors which HDI does not.
However, HDI still much more widely used and recognised despite its many flaws.
What is ODA?
ODA: Official Development Assistance is commonly known as Overseas Aid or Foreign Aid.
What are the 3 types of aid?
Bilateral: e.g. UK government granting money directly to projects in developing countries.
NGO: Non Government Aid e.g. charities like Oxfam
Multilateral Aid: Assistance by the government to international organisations like the UN who use the money to help poorer countries.
What do the levels of aid depend on?
The extent of poverty in the country- obviously poorer countries should receive more aid.
Short term/emergency needs-e.g earthquake famine or war relief.
Cultural and Trading links- e.g. UK has historical links with these countries and all are in the Commonwealth.
ODA good?
Another camp believes that aid levels have been too low, and that large increases would help reduce poverty. They also argue that we need a rethinking on the way in which aid is provided In particular, specific interventions, such as anti-malaria programmes, should be emphasised.
ODA bad?
One believes that official assistance is ineffective, and has harmed poor countries throughout the years. This views official aid as creating dependency, fostering corruption, preventing countries from taking advantage of the opportunities provided by the global economy.
