aid and debt Flashcards
define bilateral aid
governments in developed countries giving aid to governments in developing countries, also known as m official development assistance
stat example of bilateral aid(ukraine)
over $660 million in bilateral assistance to ukraine from uk since start of invasion
define multilateral aid
governments donate capital to multilateral agenies such as the world bank, imf and eu
define emergency aid
aid given in response to national disaster, humanitarian crisis or conflict, in uk coordinated by disaster emergency committee (DEC)
what was the issue of emergency aid found in a oxfam survey
aid had tended to got to business and land owners, increasing divide between the in and poor
define commercial lending
commercial banks lend to countries at commercial rates of interest
what is the 0.7% target
in 1969 the UN and its member countries declared that industrialised countries would give 0.7% of there GDP in aid.
which countries reached the 0.7% target in2014(5)
sweden, luxembourg, norway, Denmark, uk
give an example of commercial lending
lloyds lent 165% of its capital by 1984
2007 $8228 million was transferred from the uk to developing countries but in 2008 this went down to just over $1229 million
define NGO
national governmental organisations
examples of NGOS
oxfam, action aid, save the children
what is the role of NGOS
charitable organisations which raise money via public donations , some receive government funding
who argues aid is benifical
NGOS, modernisation
how do NGOS Argue that aid is beneficial
Argue, it has a crucial role to play in development. However, it needs to be “people centred” , small-scale an appropriate and also focus on the needs of the people rather than large scale aid projects
How dose modernisation argue aid as beneficial
say that aid is crucial for “take off”. countries were advised to spend aid money on western technology and experts to improve agriculture and speed up industrialisation . aid is also said to help change values e.g. meritocratic education systems. money would ”trickle down” to the poorest but start with the elites in developing countries
who argues against aid
neo liberalists, dependency theorists
how do neoliberalisms argue aid as “dependency”
low rates of capital in LEDCS due to failure of welll they to dave, therefore aid subsides the expenditure of the wealthy.
aid has no clear impact on poverty, health and mortality rates and i actually supports inefficiency and irresponsible attitude.
neo liberalist bauer(1991) argument against aid
economic achievement depends on peoples attitudes and motivation. another argument is that industrialised nations developed without aid
how can aid be described as inefficient and inappropriate
goes to a variety of different places, not simply poor countries.. aid is often inappropriate-out of date food, drugs ect..
aid often rakes a long time to arrive, if at alll
aid is offered on the base of privatisation, there are too many argue aid organisations operating
aid as imperialism- dependancy (hayter)
aid is the “smooth face of imperialism”. MEDCS continue the domination of LEDCS through the giving or withholding of aid. dependency on foreign investment is created.
MEDCS have political and economic goals for the giving of aid
TNCS gain from aid programmes in developing countries
what was the debt crisis
between 1987/2000 every $1 given to sub-saharan africa in aid, $1.10 was paid back in debt
what caused the debt crisis
the transfer of debt from colonial powers to newley independent states, left a burden of debt before economies could become strong, in addition there were high levels of interest on high levels of debt
what’s the impact of debt
debt repayments mean less money can be spent on development and the basic infrastructure of the country, health , education and services
examples of the impact of debt
Zambia 2004- paid more in debt to imf than its entire education budget
Malawi spends more of debt than health, despite 1in7 Malawians being HIV positive
what does dependancy theory argue the debt crisis was brought about by
-newly independent countries being dependant on cash crops&the failure of free marker policies(falling prices of cash crops)
-rising prices of commodities such s oil&rising interest rates
-inappropriate spending in LEDCS scoured by the west eg”use aid money on our technology”
-corrupt elites pilfering money
susan george “the debt boomerang” 1992
there are six ways in which developing world debt impacts us all:
-environment
-unemployment
-drugs
-immigration
-taxes
-conflict
How does debt impact the environment?
People and countries exploit natural resources in the least profitable and sustainable way. Increasing global warming and loss of biodiversity
How does Debt cause unemployment?
Exports to LEDCs would be higher if it wasn’t for large debts. loss of jobs due to “lost exports”
How does debt lead the drug problems?
Legal drugs are a major source of income in heavily indebted countries. E.g. Colombia and Peru
Social and economic cost of illegal drugs in north are high(est$60billion in US)
How debt lead to immigration problems?
People will flee poverty and move towards wealthy countries. Refugee numbers increased due to the unrest&conflict caused by poverty.
How does debt affect taxes?
Developed countries, governments use taxpayers money to buy allowed banks that lend money to poor countries. Governments picked up the banks, bad debts.
How does debt effect conflict?
debt creates social unrest and war, conflict emerges over lack of resources, creates refugees in demands action from developed world
What are SAPs
Structural, adjustment plans
What’s the aim of SAPs
IMF and World Bank boat plans to rebalance countries economies to help them out of debt. These loans were tied to government spending pounds.
They were essentially a “neoliberal” approach to economic development, meaning privatisation, opening markets And cutting back on government spending(Reduction in money for education, health and welfare )
What do the Jubilee debt campaign argue?
-That much of this debt relief is merely a continuation of tie-aid(aid with conditions).
-They cite the neoliberal agenda behind the IMF, as a key indicator of this to get debt. Relief from IMF countries must meet 30 conditions.
What is the HIPC?
Heavily indebted poor countries initiative,
Set up by the IMF and World Bank in 1996
What are some problems with the HIPC?
There are many criticisms of this initiative
- took too long over six years
-include a few countries
-are very stringent rules for countries to stick to for years before completion.
What are vulture funds?
This is where countries sell debt owed to them by other countries to private firms as part of debt write-off plan.
These firms purchase the debt with the sole intention of recouping the money from LED seas to create profit for their investors.
What’s an example of vulture funds
Zambia borrowed money from Romania for agricultural equipment in 1979 by the 1900s. It could not repay the debt so it now negotiated with Romania to settle the debt for 3 million
donegal international purchased the debt from Romania for 4 million and sued Zambia for 55 million (all costs and interest on the original loan ).
-a court ruled Zambia had to pay donegal international 15.5 million.
