Aid, Trade & Debt

Question 1

What are the 3 key differing perspectives on trade?

Answer 1

1) Trade as driver of prosperity
2) Trade as poverty alleviation
3) Trade as driver of inequality and uneven development

Question 2

What are the 3 key points of the neo-classical view of trade?

Answer 2

1) Free-trade is always desirable
2) Between two nations, trade would be beneficial if each had an absolute (Smith) or relative (Ricardo) comparative cost advantage in a different product
3) Individual capitalists, specialising in activities that draw on the locally abundant factor will realise national comparative advantage

Question 3

What are Sheppard 2012’s 5 critiques of neo-classical trade from a geographical perspective?

Answer 3

1) Entanglements of economy: economic interdependence of production, exchange and accumulation
2) Entanglements of space: tend to ignore transport
3) Entanglements with other global flows: trade co-evolves with FDI, networks, migration and movements
4) Entanglements with “more-than-economic”: local initiatives to advance competitiveness, national policies for cross-border flows, global governance regimes (i.e. WB, etc.). Culture, emotions, more-than-human materialities
5) Entanglements with non-capitalist economic logics : other modalities of production and exchange (i.e. care)

Question 4

What are the 3 trends in trade and development?

Answer 4

1) Globalisation and growth of global trade
2) Rise in Foreign Direct Investment
3) New zones of free trade: SEZs in China

Question 5

What are 3 problems with trade and development?

Answer 5

1) Double standards: free trade and protectionism
2) Dumping practices
3) Unfair trade rules and historic power imbalances

Question 6

US-Brazil cotton dumping dispute, 2002

Answer 6

• In 2002 Brazil expressed concern about US cotton subsidies by initiating a WTO dispute settlement.
• Brazil argued that the US had failed to abide by its WTO commitments and dumped cheap cotton on world markets which drive down world cotton prices to the detriment of emerging economy producers.
• The WTO ruled against the United States
• The case showed that the US used loopholes to continue dumping products on developing markets,
• Cotton was exported from the U.S. at 61% below its cost of production. The U.S. share of world cotton exports is currently 42%.

Question 7

New geographical spaces of global trade

Answer 7

• 1980s NICs
• G7, G8, G20
• New China-US trade dynamic
• BASIC and Bric(s) Countries
• Geopolitical realignment / rebalancing?

Question 8

Who coined the BRIC countries?

Answer 8

Jim O’Neill from Goldman Sachs, 2001

Question 9

What may happen to the BRICS by 2050?

Answer 9

Combined economies could eclipse the economies of the world’s richest countries

Question 10

How much of the world’s population do the BRIC countries account for?

Answer 10

40%

Question 11

How much of the world’s land mass do the BRIC countries account for?

Answer 11

¼

Question 12

What is the BRIC’s combined GDP?

Answer 12

18.486 trillion dollars (18.5 trn)

Question 13

Who are the BASIC countries?

Answer 13

Brasil, South Africa, India, China

Question 14

Who are the BRIC countries?

Answer 14

Brasil, Russia, India, China

Question 15

Name 4 types of aid

Answer 15

1) Transfers of finance, commodities and other goods
2) Technical cooperation
3) Debt relief
4) Military assistance

(NB: Development aid is different from disaster relief aid)

Question 16

What are the 5 trends in development aid?

Answer 16

1) Governance
2) Civil society
3) Partnership
4) Conditionality
5) Sovereignty

Question 17

What are the origins and causes of world debt?

Answer 17

1) 1973 quadrupling of oil prices
2) Third world borrowed money to cover rising oil costs
3) Increase in global interest rates slowed down spending in west
4) Reduced demand for third world exports
5) Higher interest rates on third world loans
6) Lower export earnings
7) CRASH
8) Debt defaults
9) IMF loans
10) IMF conditions applied

Question 18

What does HIPC stand for?

Answer 18

Heavily Indebted Poor Country

Question 19

Name 2 movements against debt

Answer 19

Jubilee 2000

Make Poverty History

Question 20

Who developed the World Systems Theory

Answer 20

Emmanuel Wallerstein

Question 21

What are the 5 stages of the Rostow model?

Answer 21

Traditional Society
Preconditions for take-off
Take off
Drive to maturity
High mass consumption

Question 22

Which 2 continents is the Rostow model based upon?

Answer 22

America and Europe

Question 23

What are 3 negative aspects of the Rostow model?

Answer 23

Generalised

Western-orientated - devalues culture

Reality = very different: merged stages

Question 24

Who developed the dependency theory?

Answer 24

Raul Prebisch 1959

Question 25

The works of Bolt and Bezemer 2009 showed…

Answer 25

Variations in colonial education investments within sub-Saharan Africa help to explain human capital levels as far forward as 1995

Question 26

Variations in colonial education investments within sub-Saharan Africa help to explain human capital levels as far forward as 1995

Answer 26

Bolt and Bezemer 2009

Question 27

Bolt and Bezemer 2009

Answer 27

Variations in colonial education investments within sub-Saharan Africa help to explain human capital levels as far forward as 1995

Question 28

Colonial legacies can…

Answer 28

…impact patterns of global poverty

Question 29

Trade as driver of inequality & uneven development

Answer 29

Dependency theory

Exploiting labour, minimum wages & difference in currencies

TNCs find loopholes in different countries to produce at the cheapest price

Countries promote investment from abroad (without taxation) to encourage more TNCs to come to their country

Contrasts with actual rules of companies in their own nation state