aid and debt Flashcards
bilateral aid
given to the government of one country to the government of another
known as ‘official development assistance’
75% of UK aid was bilateral
multilateral aid
governments donate capital to multilateral agencies such as the World bank, IMF, EU and UN
the multilateral agencies then use the money as loans
who are the two biggest international lenders
The World Bank
The International Monetary Fund (IMF)
The world bank
official goal ‘to reduce poverty’
lends to LDC’s
aims to promote foreign investment and international trade
long term loans mainly for infrastructure development, to allow countries to develop economically and repay loans
IMF
steps in to assist with financial crises
short term loans to resolve an immediate problem - but with conditionality (structural adjustment)
structural adjustment
loans may be made to LDC’s if they comply with IMF policies - e.g. reduction in overall government spending
this often means reducing services and benefits for the population
essentially a neoliberal approach to economic development - this meant privitisation, opening markets, and cutting back on government spending
commercial lending
banks and other companies lend to countries at high rates of interest
these lenders are often backed by governement support so can make risky loans knowing that they will be protected
by 2024, low-income countries owed over 40% of their debt to private lenders
non-govermental organisations
charitable organisations e.g. oxfam and save the children
money raised via public donations
tend to focus on small-scale projects, working with voluntary local groups rather than governments of developing countries
4 types of NGO approaches
the welfare approach
the developmental approach
the empowerment approach
the educational/ campaign approach
the welfare approach
provides relief and humanitarian assistance
less likely to be concerned with politics
attractive to public and governments
e.g. red cross
the developmental approach
e.g. water aid
aid for health, housing, educational projects etc.
may involve volunteers or ‘experts’ or just support local groups
the empowerment approach
more radical and political
aims to empower local people and educate with reference to ‘rights’
problematic as dominant groups can be challenged
e.g. amnesty international
the educational/ campaign approach
raising public awareness of broad developmental issues
this approach is often mixed with other forms
e.g. oxfam
Aid is a ‘good thing’
Sachs/ Collier/ Gates
- aid solves the ‘poverty trap’
modernisation theory
- economic investment
- cultural education
aid is a ‘bad thing’
easterly/ Mayo
- aid ‘props up’ corrupt government
- aid doesn’t ‘trickle down’
- aid doesn’t create economic development
Dependency theory
- exploitative (debt)
- creates reliance on donor countries
- Neocolonialism e.g. tied aid
Neoliberalism
- aid creates dependency culture
top 2 countries recieveing Aid from the UK
Ukraine - 250 million
Ethiopia - 164 million
feminist viewpoint on aid
aid focussed on women’s issues
patriarchal control
emergency aid
given in response to a natural disatser, humanitarian crises or conflict
in the UK this is coordinated by the Disasters Emergency committee which brings together NGO’s to focus on a particular problem
Neo-populist (NGO) viewpoint of aid - positive
argue that aid has a crucial role to play in development
but: it needs to be people centred, small scale and appropriate, and focus on the needs of the people rather than large scale aid projects
modernisation theory of aid - positive
official aid is a crucial component required for take off into industrialisation
aid aimed to change cultural attitudes by setting up meritocratic education systems focused on literacy, and family planning programmes targetted from freeing women from the dependency created by the patriarchal family system - aid helps to change values
money would ‘trickle down’ to the poorest but start with the elites in developing countries
countries were advised to spend aid money on western technology and experts to improve agriculture and speed up industrialisation
aid as ‘dependency’ - neoliberalism
low levels of investment in LDC’s due to failure of wealthy to keep money in banks
Moyo - Dead aid - neoliberalism
aid is easy money that fosters corruption and distorts economies, creating a culture of dependency and economic laziness
western aid has been a hinderance for many countries
large levels of corruption in developing countries means that the aid may not reach the people it is intended for
Dichter - neoliberalism
aid should be limited to emergencies and refugee assistance, and maybe some limited technical assistance on the issues of good governance and property rights
otherwise aid will only fuel corruptions as well as inequality, poverty and other issues
