Debt, aid and development

Question 1

What is a colony?

Answer 1

a territory that is controlled by a foreign power

Question 2

What are 3 reasons why European countries colonised Asian, African and American territories?

Answer 2

1. they could source raw materials to help with their development
2. building an empire gave countries power
3. saw it as a way of ‘civilising’ native people, as they saw their cultures as inferior

Question 3

How has colonialism harmed LEDCs to this day?

Answer 3

1. HICs used them to produce cash crops e.g cotton, coffee, using slaves and low paid labour, and selling the crops for high prices therefore exploiting them
2. former colonies are under-industrialised as they were only used for primary sectors industries
3. former colonies still rely on raw products so their whole countries economy relies on demand in HICs

Question 4

Why do LEDCs have to borrow money from rich nations?

Answer 4

1. for survival

2. for development projects e.g schools, hospitals

Question 5

Why do dependency theorists blame colonialism for the debt crisis?

Answer 5

1. colonialism restricted their economic dev
2. countries that gained independence had to borrow money to fund dev
3. aid doesn’t go to the right places - corrupt gov embezzlement or bad investment e.g weapons
4. HICs charged high interest on loans which helped made more money for them, and ensured LEDCs would stay dependent

Question 6

How can international trade help dev?

Answer 6

1. Fair trade - set price for cash crops so not relying on demand in HICs
2. WTO sets rule so all countries are treated fairly

Question 7

Why do neoliberalists argue that fair trade doesn’t actually help dev?

Answer 7

it doesn’t encourage producers to be efficient and enterprising

Question 8

What are the advantages and disadvantages of using TNCs to help dev countries?

Answer 8

• TNCs provide investment in LEDCs e.g roads, railway
• TNCs provide jobs, increasing spending and consumerism
  HOWEVER
• growth can be too fast for the host nations infrastructure to deal with
• people who define dev by quality of life may have concerns about working conditions

Question 9

What are the 3 types of aid?

Answer 9

1. bilateral aid - gov giving direct support to another gov
2. multilateral aid - grants and loans from IMF and world bank
3. NGOs - logistical support and donations from the publci e.g Oxfam, christian aid

Question 10

What do modernisation theorists argue about aid?

Answer 10

1. believe HICs should give aid to LICs that are prepared to accept western development
2. aid has a ‘trickle-down effect’ - aid goes to the elite in LEDCs who start businesses, who employ people etc

Question 11

What do dependency theorists argue about aid?

Answer 11

1. aid often has conditions attatched e.g have to let TNCs operate in their countries, which allows for exploitation
2. bilateral aid is tied - LEDCs have to spend the money in MEDCs e.g buying goods from them, which helps MEDCS more
3. Hayter - sees it as a tool for political influence
4. to get a loan from the IMF or world bank, LEDCs have to agree to make changes e.g SAPs (structural adjustment programmes)

Question 12

What are the criticisms of SAPs?

Answer 12

1. ethnocentric

2. what works the the north doesn’t always work in the south

Question 13

What do new right theorists argue about aid?

Answer 13

1. agree with dependency theorists that it ensures LEDCs stay dependent

Question 14

What do neoliberals argue about aid?

Answer 14

1. LEDCs need to join the free market to dev