Unit 3 - 4 Flashcards
1
Q
What are the reasons for giving countries aid?
A
- Humanitarian - help those in need
- Political - to win political friends
- Economic - if he developing world becomes more productive they will contribute to the work economy more and provide markets for other countries
2
Q
What are the types of aid?
A
- Humanitarian aid - food water etc
- Writing off debt
- Tied aid - money is given to country but had to be spend on goods and services from the donor country
- Loans - WB, IMF, UN
- Technological aid - modern tech
- Education and training - teachers supplied
- FDI - foreign firms setting up factories
3
Q
What are the disadvantages of aid?
A
- Food aid can destroy local agriculture by driving down prices
- Aid may not reach those in need
- Tied-aid may force demanding country into buying equipment etc when it may not have been cheapest option
- Can lead to dependency on rich countries
4
Q
What is the world trade organisation?
A
- To ensure trade flows as smoothly, predictably and freely as possible
- Increased standards of living as aim
- 159 members
- Promote free trade by persuading countries to abolish barriers
5
Q
What is the world bank?
A
- Aims to lend money to governments mainly in developing countries to supports specific capital projects
- It’s financial assistance takes fork of long term loans
- Most of the money it lends is obtained by borrowing on the worlds capital markets
6
Q
What is the International Monetary Fund?
A
- Specialist international lending org that supports countries with BoP difficulties
- Lends money to help finance BoP deficits
- Aims to
- encourage the growth of world trade
- offer assistance on matters of economic policy
7
Q
What are the characteristics of developing countries?
A
- Poverty - banks have no savings so unable to grant loans
- High population growth - GDP per capita will fall
- High dependence on one or two X
- Poor infrastructure as unable to invest
- Low levels of EG
- High proportion of agriculture
- Unemployment - seasonal
