Aid, Trade and Debt Flashcards
why do donors provide aid?
altruism
geo-political interests
economic interests
reparations
questioning/critiqing aid
international aid and trade is uneven
OECD is baso a rich country club that selects the countries that need aid (only uses income as a measurement of how well a country is doing)
SOURCE: critique of neo-colonialism: reality is, state’s economic systems and thus its political party is directed from the outside
nkrumah, 1965
what is the development state hypothesis?
the developed countries did not where they are now through the policies and institutions they recommend, most actively use bad trade/industrial policies
SOURCE: development state hypothesis
ha-joon, 2002
what is an infant industry
where they did not liberalise the economy so they were not ready to compete
OECD definition of aid
resources transferred on concessional terms with the promotion of the economic development and welfare of the developing countries as the main objective
concessional terms
below market rates
grace periods (can be several years)
low interest rates
forms of aid given
grants, soft loans, emergency relief, project loans, food relief, military equipment, commodities, technological cooperation, economic interests
left wing critiques of aid
reproduces unequal power relations between GN/GS and is often motivated by political and economic interests
right wing critiques of aid
ineffective use of taxpayers money
reformist critiques of aid
believe that aid is an essential tool for economic development and an avenue to saving lives (mosquito nets)
types of aid
bilateral, multilateral, non-governmental, private (voluntourism, celebrity)
what is the global trade-debt nexus
trade is unbalanced and therefore people accumulate debt
what is foreign debt
it is in the currency of the loaners (usually USD) which is the strongest and most expensive
it can also be owed to private commercial banks, other countries, and IFIs
IFIs recommend more trade because
a trade surplus allows countries to save and invest in their growing economies
twin deficit theory
when countries consume more than they are producing and they cannot raise taxes high which leads to less money for investment
what is a vulture fund
when counties purchase distressed sovereign debt at low prices and resort to various tactics to increase their value
what are structural adjustment loans (SALs)
IFIs offer them for developing economies (controversial) bc it means a cut back on social spending and an increase of privatisation and deregulation
SOURCE: critique of SALs
SALs means that millions of poor people are being asked to pay American prices (Silvia Federici)
non-traditional donors
south-south cooperation
faith based
diaspora (ppl sending money back home)
China’s Belt and Road Initiative
connective infrastructure that is based on the silk road that connects china to europe
$9.2 B of accumulated trade
aimed at rebalancing economic growth between eastern and western china
means that more countries receive chinease aid
dunford, 2020
SOURCE: looks at south-south cooperation and the reaction from traditional donors
Mawdsley, 2017
