9.3 Sustainably managing uneven development Flashcards
What is the International aid and what forms does it come in?
International aid:
International aid is assistance to countries in need in the form of grants or cheap loans. Most developing countries have been keen to accept foreign aid because many 1) lack the hard currency to pay for vital imports, 2) have insufficient savings to invest in industry and infrastructure, and 3) lack important technical skills.
Aid given from one international government or organisation to another country. This could be in the form of money or goods
Official government aid is where the amount of aid given and who it is given to is decided by the government of the country/countries giving the aid. Official government aid can be divided into:
- Bilateral aid, which is given directly from one country to another - a significant proportion of bilateral aid is ‘tied’ despite continual efforts to end this process.
- Multilateral aid, which is provided by many countries and organised by an international body such as the UN.
Voluntary aid is run by NGOs or charities such ActionAid, Oxfam and CAFOD. NGOs raise money in various ways from individuals and organisations. However, an increasing amount of government money goes to NGOs because of their special expertise in running aid programmes efficiently. (NGOs have often been much better at directing aid towards sustainable development than government agencies. The selective nature of such aid has targeted the poorest communities using intermediate technology)
Aid supplied to poor countries is of two types:
- short-term emergency aid, often called ‘relief aid’, is provided to help cope with unexpected disasters such as earthquakes, volcanic eruptions and tropical cyclones
- long-term development aid is directed towards the continuous improvement in the quality of life in a poor country.
What are the advantages and disadvantages of aid?
Advantages:
- Help move people out of poverty and also save lives by providing food to those who are severely malnourished.
- Aid for infrastructure or investment support for growing industries like fintech enables an increase in jobs. This can stimulate the economic recovery and development of a nation which in turn boosts the quality of life of those within the country and gets the nation back on their feet
- Through growth in jobs and the economy this should enable countries to no longer require aid as they economy is self-sufficient - this would show economic development.
- Provision of funding for the maintenance health care and keeping nurses/doctors working which not only supports the health of population suffering from malnutrition but also provides income and maintains jobs within the health care sector.
- Invested in organisations that are looking at immediate issues of food and healthcare and by investing in those organisation you can support longer term progress.
- Can help reduce the chance of mass emigration to bordering countries which would otherwise have to support desperate people and this may increase the strain on the economies/services of host countries.
- Tied aid can also benefit the country involved in giving the aid
- Aid does not create the same economic burden as loans which if they cannot be paid back create a debt burden
Disadvantages:
- If aid goes to corrupt groups they can siphon this off instead of using it to help the intended people. This may further increase inequality.
- It may make a corrupt country look better if the economy is growing and health of population is improving resentment towards the groups such as the Talibam may decrease.
- May be politically contentious to give aid to a country where the leadership can be considered terrorists or highly abusive towards women - policies that are draconian/oppressive towards women - do not want to be seen as supporting the Taliban.
- Aid often fails to reach the poorest people who need it the most
- A significant portion of Aid is tied aid meaning the recipient doesn’t benefit in the long term
- The use of aid on large capital intensive projects may worsen local poverty
- Aid may delay the introduction of reforms
- Aid can create a culture of dependency. This can increase a reliance on aid in LICs and donated money from other countries. Particularly if this aid is short term aid e.g. food and where the root problem is not being solved.
What intergovernmental agreements have their been in relation to development?
- WTO - dealing with the rules of trade between nations, aiming to ensure trade flows smoothly, predictably, and freely, while also providing a forum for trade negotiations and resolving trade disputes
- International Monetary Fund - The IMF has three critical missions: furthering international monetary cooperation, encouraging the expansion of trade and economic growth, and discouraging policies that would harm prosperity. To fulfill these missions, IMF member countries work collaboratively with each other and with other international bodies.
- World bank - providing financial and technical assistance to developing countries, aiming to reduce poverty and promote sustainable economic growth and improve living standards
- The World Health Organization (WHO), founded in 1948. It is responsible for international public health. Its constitution states its main objective as ‘the attainment by all peoples of the highest possible level of health’. It directs and co-ordinates the world’s response to health emergencies such as the recent COVID-19 pandemic.
- The Food and Agriculture Organization (FAO) leads international efforts to combat hunger and improve nutrition and food security. The FAO states that it ‘Acts as a neutral forum where all nations meet as equals to negotiate agreements and debate policy’.
- The World Food Programme (WFP) is the food assistance branch of the UN. It is the world’s largest humanitarian organisation. It is focused on hunger and food security, and is the world’s largest provider of school meals.
- The United Nations Conference on Trade and Development (UNCTAD) was established in 1964 to promote the interests of developing countries in world trade. There is a strong relationship between trade and development. UNCTAD has stated that even small changes in agricultural employment opportunities, or farm prices, can have major socio-economic effects in developing countries.
What are the different views on tackling development gap
- Some countires contribute a much higher proportion of their GDP to international development than others
- The political character of a government can influence its attitude to international development
- The strength of global civil society in a country can be a big factor in shaping development policy
- The respective benefits of prioritising trade or aid have long been debated
Reforming the WTO/Free trade:
Organisations such as the World Trade Organization (WTO) aim to make trade available and accessible to all countries. Serves to remove barriers of trade such as tariffs
Critics of the WTO complain it is dominated by the largest economies in the world, with little regard to the trade difficulties faced by many developing countires.
- agricultural subsidies and other trade barriers in the USA, EU and other rich countries prevent poor countries from gaining proper access to the most important markets in the world
- at the same time, poorer nations have been expected to open up their markets to competition from more advanced nations
- trade is heavily dominated by TNCs, which often benefit the most from new trade rules.
- In the past the most developed countries benefited the most as trade between them accounted for over half of all trade. However in recent years the trade between developing countries has increased from less than a tenth in 1995 to almost 25% in 2022
- Informal traders which many livelihoods rely on. When countries attempt to integrate this into formal trade it can disrupt this and in turn disrupt the livelihoods of many.
Giving developing countries greater access to markets in developed coumtires would be a mjor boost to the incomes of poorer countries
Debt relief:
Debt affects a country’s credit rating and therefore its overall economic vulnerability. The debt service ratio (the proportion of a country’s export earnings that it needs to use to meet its debt repayments) of many poor countries is at a very high level compared to their ability to pay.
Debt relief is part of a much larger process, which includes international aid, designed to address the development needs of poor countries. Unfortunately, indebtedness has been growing across many regions since the start of the pandemic. Debt burdens are too high and export revenues too low in many parts of the developing world.
Fair trade:
- Fair trade is a system in place to guarantee small scale farmers equal pay for their produce. It helps to establish stable and fair trade relationships. It provides a premium for these products.
- This it provides farmers with more income meaning they can have a better standard of living as well as investing in their work to create more produce
- This benefits children as it reduces poverty for farmers and allows children to not be forced into work and instead can be educated and therefore obtain higher skilled jobs in their future
- However, the cost and complexity involved in certification can reduce some benefits. Not all farmers are fair trade which can exacerbate the problem of uneven development as about 1% of global produce in fair trade.
Microcredit and social business:
The Grameen Foundation advocates microfinance and innovative technology to fight global poverty and bring opportunities to the poorest people. The bank provides tiny loans and financial services to poor people to start their own businesses. Women are the beneficiaries of most of these loans. A typical loan might be used to buy a cow in order to sell milk to fellow villagers or to purchase a piece of machinery that can be hired out to other people in the community. The concept has spread well beyond Bangladesh to reach millions of families in over 25 countries.
However, microcredit has come under increasing criticism in recent years because:
- interest rates are often very high
- recipients often use loans to finance consumption. As a result they do not generate any new income that they can use to repay their loan.
What was the HIPCs initiative and its advantages and disadvantages?
38 of the least developed countries with the greatest poverty and debt, 32 of which are in sub saharan Africa gain help from IMF and WB through the HIPCs Initiative (1996) with the aim of reducing the debt burden. In 2005 the WB & IMF cancelled all loans owed to them by 18 HIPCs, worth $40bn.
Advantages:
- Countries that have been relieved from the debts burden caused by natural disaster and war can now have a clean slate and opportunity to begin developing and can invest government money into infrastructure instead of paying off debt which halted development.
- The money that would otherwise be spent on paying of the loans is spent on education, healthcare and transport in the long term will facilitate sustainable development.
DIsadvantages:
- Some countries have corrupt governments where the money they are given to alleviate themselves from debt isn’t spent on doing so and is embezzled and benefits the few rich and powerful inside the government and the population of the country continues to live in destitute.
- One of the problems about choosing not to give the money to corrupt government meaning the people inside the countries are still suffering and corruption is still going to be a prevalent issue.
- Debt relief doesn’t mean the economy is in a position to develop and they become over reliant on debt relief without solving the original problem.
What is top-down development and its advantages and disadvantages?
Top-down development:
Usually large-scale. This means they aim to develop a whole country or region, for example building dams that provide electricity for thousands of people. Decisions are made by governments or large companies, not by local people.
Advantages:
- Allows for widespread improvement on a large scale and quick
- Large sums of money given or spent on development allow for larger scale economic development and opportunity. Groups such as the government or (for developing countries) the World Bank are the only groups that would have sufficient funds for large scale development
- Without such investments in areas like infrastructure, many of the small scale projects such as more effective methods of farming, will not be as successful - if farmers cannot get goods to market even if they make more produce it may not be able to be sold to a large enough market.
Disadvantages:
- May only benefit the richest the most
- Potentially short term.
- Many of these projects are funded by loans - this could be from other countries or banks or from the WB - this can be crippling for a country if the interest rates on the loan are high and they struggle to pay it off - evidence of this is the fact that we cancelled the debt of HIPC - showing how loans for development can be a major issue for long term economic growth
- Local views are often overlooked because of wider national focus e.g. dams often displace vulnerable populations leaving them in a worse position
- TNCs often have the aim of maximising profit at the forefront of their decision making and disregard the impact on local people
What is bottom-up development and its advantages and disadvantages?
Bottom-up development:
Local-scale projects that aim to help a community or small area to develop. An example is building a well so that a community has access to safe, clean water. Decisions are made by the local people affected by the project.
Advantages:
- Focuses on those most in need who may otherwise be overlooked by top down development or that the TD developmeny would take a long time to reach
- Helps build long terms roots and sustainable foundations to help development into the future.
- Less likelihood of leaks from corruption.
- Gives greater agency/say to locals who will likely no best what support they need for development.
Disadvantages:
- May be inefficient and not widespread.
- It won’t have the same short term rapid boost to the economy that large scale investment can but offers more sustainable long term growth.
Give an example of top-down development in a developed country?
The UK’s High Speed 2 (HS2):
HS2 is a top down development project in the UK and is a planned high-speed railway linking London to cities in the Midlands and North such as Birmingham and Manchester. The aim is to redice regional economic imbalance by sharing the growth and wealth from London to other cities by connecting them with improved transport.
Successes:
- Would connect cities and distribute economic growth and development so it is not only concentrated in London.
- Will improve infrastructure however it will take a long time to build and see results
- Creating semi-skilled jobs such as construction which provides reasonable income without a degree.
- Will consideranly reduce journey times as training will operate at speeds up to 225mph
- Free up capacity on existing railway lines
Failures:
- £37.5 billion to £71 billion (recent estime put total cost over £90 billion) - cost can be very expensive for top down investment and inefficient as well as slow. Money could be used in other ways such as improving the NHS and education
- Train links already in place
- Large environmental impact
- The consultation process was largely cosmetic (superficial)
Different viewpoints:
- This benefits Northern cities such as Manchester who would be connected to London. (Mayor of Manchester concerned if this project doesn’t go ahead.
- (Transport secretary) There are outside issues such as war and covid meaning the HS2 may not longer be economically viable
- Prime minister has to have the public’s opinions in kind who won’t be easily convinced of the large costs are worth it.
Overall:
Not successful due to external issues such as energy criss and and covid. Also because of surface level planning and research shows that this project may do more bad than good. For many
Give an example of bottom-up development in a emerging country?
WaterAid in Mali:
Aims to provide water in an environment in mali with harsh conditions where there is little and unpredictable rainfall. ~65% of the Country is a desert
Successes:
- The combination of safe water, sanitation and hygiene education has led to a significant improvement in general health of the community.
- Allows people to focus their energy on activities that will stimulate growth such as children going to school for education instead of searching for water.
Failures:
- Potentially short term solution as it relies on finite water sources which could eventually run out.
- Not wide scale such as creating reservoirs for water for all towns and villages. 30% in rural and 20% in urban do not have access to clean water.
- Relies on donations and therefore not fully reliable. Ability to develop and broaden the area that it cn work is entirely dependant on public donation making it fragile.
- Once wells and pumps were built they were not always looked after leading to failure and this may suggest the technology used is not entirely appropriate for the skills of the community.
Differnet viewpoints:
- World bank has the viewpoint that larger infrastructure projects should be carried out for sustainable long term solutions as the groundwater will run out and these projects are small scale.
- Global governments say that this doesn’t solve the route problem and cause and is addressing symptoms. If climate change is addresses than this will lead to less drought and less scarcity of water.
- Some individuals would rather the community be given the money so they may send it on the aspects of development the community needs most..
- Generally supported as it reduces spread of disease and women are particularly benefited as they no longer spend time searching for water.
Overall:
Reasonably successful as it has provided a drastic improvement to before and benefited those who need it the most. However it is not very wide scale and as there are still some places without these facilities and will still suffer.
