Assisstance To Developing Economies

Question 1

Food aid

Answer 1

• only a short term solution
  
  • can cause a culture of dependence
• reduces food prices
• reduces local farmers’ income

Question 2

Technical Assistance

Answer 2

• in the form of advice on how best to run a government

- eg the development of legal institutions to improve land ownership rights

Question 3

Educational Support

Answer 3

• focus on training of teachers
  
  • improve quality of education delivered
• improved education will lead to people escaping poverty
  
  • increase economic growth

Question 4

Tied Aid

Answer 4

• Aid is given to the country but have to buy equipment from donor country
• the developing economy is having to buy equipment at a higher cost than if they were able to buy from other suppliers

Question 5

Soft Loans

Answer 5

• this loan has a low interest rate
• money could be invested wisely
• making a larger return means that not as much interest has to be paid back

Question 6

Military Aid

Answer 6

• training a team or military equipment
• security is vital so that people can focus on growing the business
  
  • provides a safe investment environment
• military aid can mean that the government has more control over its people and they can abuse this power
  
  • weapons and equipment can fall into the wrong hands, so conflict can become worse

Question 7

Assistance With Capital Projects

Answer 7

• a donor country can provide aid to assist with capital projects
  
  • eg building hospitals and transport infrastructure
• some countries can not afford the maintenance required of large capital projects

Question 8

Liberal Trade Policies

Answer 8

• this is the reduction of barriers to trade

- this will allow exporters in developing countries the ability to sell their products without having to pay tariffs

Question 9

Debt Relief

Answer 9

• allows developing countries to use the money spent on paying back debt, or in some cases paying just the interest, to invest in education and healthcare that will create economic growth
• if a country has its debt written off, then it might think it can build up debt again and it will be written off

Question 10

Medical Assistance

Answer 10

• developed economies provide developing countries with the means to ensure a health population
• in the form of medicines (tonight disease, such as Ebola), health care and access to health care workers