Policies to promote growth

Question 1

State inward looking strategies and 2 disadvantages

Answer 1

import substitution
Protectionism
Restrictions on FDI

Distorts comparative advantage
Inefficiency as competition is restricted

Question 2

Name 3 outward looking strategies

Answer 2

Trade liberalisation
Promotion of FDI
Devaluation of Exchange Rate

Question 3

5 reasons Why tourism is a good policy?

Answer 3

Source of foreign exchange
Investment by tncs - infrastructure
Jobs
tax revenues
income elastic demand

Question 4

Drawbacks of tourism growth

Answer 4

Demand falls during recession
External costs (pollution)
Changes in fashion
Low paid seasonal employment

Question 5

What is tied aid?

Answer 5

Aid with conditions attached

Question 6

What is bilateral aid?

Answer 6

Aid given directly from one country to another

Question 7

What is multilateral aid?

Answer 7

Aid channelled through organisations e.g. WB

Question 8

4 drawbacks of aid

Answer 8

Dependency theory - halts development
Dependent culture
Corruption can lead to aid going to govt officials
It is a form of imperialism to secure influence

Question 9

3 benefits of debt cancellation

Answer 9

Reduces absolute poverty
No interest on debt, so foreign currency to purchase imported capital.
Reduces savings gap

Question 10

Arguments against debt cancellation

Answer 10

Time
Corruption
Many in poverty live in countries with relatively low debt