Aid, Trade & Debt Flashcards
What are the 3 key differing perspectives on trade?
1) Trade as driver of prosperity
2) Trade as poverty alleviation
3) Trade as driver of inequality and uneven development
What are the 3 key points of the neo-classical view of trade?
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
What are Sheppard 2012’s 5 critiques of neo-classical trade from a geographical perspective?
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)
What are the 3 trends in trade and development?
1) Globalisation and growth of global trade
2) Rise in Foreign Direct Investment
3) New zones of free trade: SEZs in China
What are 3 problems with trade and development?
1) Double standards: free trade and protectionism
2) Dumping practices
3) Unfair trade rules and historic power imbalances
US-Brazil cotton dumping dispute, 2002
- 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%.
New geographical spaces of global trade
- 1980s NICs
- G7, G8, G20
- New China-US trade dynamic
- BASIC and Bric(s) Countries
- Geopolitical realignment / rebalancing?
Who coined the BRIC countries?
Jim O’Neill from Goldman Sachs, 2001
What may happen to the BRICS by 2050?
Combined economies could eclipse the economies of the world’s richest countries
How much of the world’s population do the BRIC countries account for?
40%
How much of the world’s land mass do the BRIC countries account for?
¼
What is the BRIC’s combined GDP?
18.486 trillion dollars (18.5 trn)
Who are the BASIC countries?
Brasil, South Africa, India, China
Who are the BRIC countries?
Brasil, Russia, India, China
Name 4 types of aid
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)
What are the 5 trends in development aid?
1) Governance
2) Civil society
3) Partnership
4) Conditionality
5) Sovereignty
What are the origins and causes of world debt?
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
What does HIPC stand for?
Heavily Indebted Poor Country
Name 2 movements against debt
Jubilee 2000
Make Poverty History
Who developed the World Systems Theory
Emmanuel Wallerstein
What are the 5 stages of the Rostow model?
Traditional Society Preconditions for take-off Take off Drive to maturity High mass consumption
Which 2 continents is the Rostow model based upon?
America and Europe
What are 3 negative aspects of the Rostow model?
Generalised
Western-orientated - devalues culture
Reality = very different: merged stages
Who developed the dependency theory?
Raul Prebisch 1959
