Week 9 Journal

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Week 9 Journal

However rough my Economics and

Mathematical background is there were certain ideas presented in class and

readings that I felt to be unrealistic, or at least not fully developed as a

reasonable way of solving economic issues within development. Our week’s focus

was on the world debt crisis and the Canadian International Development Agency

(CIDA), both of which included articles that deal with the role of states and

their management of mismanagement of the world economy.

Stuart

Corbridge explained in “Third World Debt” the timeline of the “debt crisis”

which spiraled out of control for developing countries after Mexico defaulted

in 1982, ensuing “years [where] sums of money have been recycled from low and

middle income countries to their creditors in the North”(Corbridge, 508). The

prevalence of Southern country debt to Northern Countries is a cause for

concern because in many cases the original debts were paid off, what is still

owed is the high interest payments. The suggestion of Northern countries

relinquishing the South from their debt was proposed, without being an economic

expert, I question the instability that might be increased by cancelling this

non-existent money. Further, it begs the question as to who would have their

debts “written-down” (Corbridge, 509), and who would still be forced to pay

theirs, at what point is a country ‘not poor or impoverished enough’ to have

their debt waved? I see this as creating a more complex dilemma for the

international community.

Also

the critique of structural adjustment programs the practices of free trade

being preached from the North was a central focus of this week’s class

discussion, a part which I would like to expand on. Structural adjustment

programs are often a mandatory component of agreements between developing and

developed countries before loans are given, they are “a standard program

[involving] currency devaluation, tax and public spending cuts and incentives

to support expert-led growth”(Corbridge, 509). Although I do agree that this is

more evidence of Northern manipulation of the world economy for their own

benefit, I think it should be considered that it is reasonable for lenders to

require some sort of assurance that economic development will occur so that the

debt being incurred may be able to be paid off. However, the basic critique

that the propagation of free trade to Southern economies is inconsistent with how

Northern economies became strong seems related to Modernization Theory. The

complaint is that “rich countries did not develop on the basis of the policies

and institutions they now recommend” and that “today’s developed nations, which

often practice market-restricting policies despite their sermons of free

trade”(Chang, 13). I think this is a fairly Eurocentric consideration of the

world market which seems to be based in a Modernization Theory idea that for

weaker economies to develop they must follow the same development path as

countries such as the United States and the United Kingdom. The world and

global business look very different from that of the 1800’s and prior when the

USA economy took off. This critique seems to ignore that the political and

social culture of the world is changing at a rapid pace, and this is reflected

in a dynamic world economy.

Finally,

my last critique of the readings and class discussion from this week is of CIDA

and the distaste many had for its incorporation of self-interested development

projects. It was established that “donor governments normally use both

self-interested and selfless arguments when justifying official development

assistance”(Brown, 214). It was difficult to accept that so much of Canadian

Aid had self-serving aims, I think that it is unrealistic to think that a

liberal democracy would support millions of dollars in aid if it could not also

in some way benefit its own citizens. Since Canada is not a socialist state it

is reasonable to think that its main purpose of aid is not to redistribute the

wealth from tax payers to impoverished nations, but rather to offer mutually

benefiting forms of good-will to other states. As well, if they gave

exclusively selfless aid governments would receive the criticism that they are

not supporting development within their own country, something which should be

the main focus of a state before it expands aid efforts beyond their borders. I

accept that not every Canadian aid project has been optimally beneficially for

the recipient country, I think that the principal that aid should be mutually

beneficially and thus self-interested and selfless is a realistic way of

considering foreign affairs and international development.

Works Cited:

Brown, Stephen. “’Creating the world’s best development

agency’? Confusion and

Contradictions in CIDA’s New

Policy Blueprint”. Canadian Journal of

Development Studies 28.02 (2007): 213-228. Print.

Chang, Ha-Joon. “Kicking Away the Ladder: Neoliberals Rewrite

History”. Monthly

Review. 54.08 (2003): 10-16.

Print.

Corbridge, Stuart. "Third

World Debt". The Companion

to Development Studies. Ed.

Vandana Desai and Robert B. Potter. 2 ed. London: Hodder Arnold Group, 2008. 508-511. Print.

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