Development Issues

Development Issues

1. Trade vs Aid

   • Aid
     • Bilateral - given directly by gov of one country to another - most dominant atleast 75%
       • debt relief - reduces debt burden of countries that are repaying loans - used in Pakistan/Indonesia in 2005
     • Multilateral - given by gov to international orgs (world bank and UNESCO)
     • NGOs - charities (Oxfam/Red Cross/Water Aid)) which raise money for development projects
     • can be distributed in different ways: 1)short term -given in response to natural disasters 2) investment to help agriculture/ energy /infrastructure/ education/ medical facilities 3)top down - responsible body direscts operation from top (eg building dams) 4)bottom up - funded by NGOs work closely with communities
     • Weaknesses: aid doesn't reach places most in need or used effectively because of corruption/inefficient governance. some countries lack basic infrastructure (difficult to invest in medical programmes in Africa that lack transport systems and power resources. can lead to aid dependency if its substantial proportion of national income. in the past bilateral aid has been tied to donor country - recipient has to agree to stringent conditions set by donor - eg using resources from donor country
     • aid can be sustainable at a local scale due to sustainable development projects/appropriate tech - improves lives
   • Trade
     • countries in the south that have industrialised can benefit from trade as there are more manufactured goods to export. this leads to increased revenues promoting wealth & living standards. trade will be only successful if they adopt neoliberalism/free market policies (no protectionism), western style capitalism. certain NICs have experienced rapid economic growth by applying protectionist policies. trade mainly benefits BRICs. about 75% of world trade takes place in manufactured goods/services between developed economies. trade from sub Saharan Africa is 1.3% of world trade
     • weaknesses - countries can't develop due to barriers to economic growth/trade
       • countries cant be competitive in global markets because of difference in wealth - cant invest in technological development at same level as rich nations. many countries are in debt - difficult to finance imports therefore have to cut spending on health and education
       • wealth from trade not distributed evenly - only confined to rich members of society - widening gap between rich and poor. many countries are primary product dependant - cannot make as much profits as richer countries subsidise their farmers through policies such as CAP/price fluctuations/TNCs also terms of trade negotiated by WTO. trade can be viewed as form of neo-colonialism - richer nations are accused of using natural resources and people of poor nations to their own advantage
       • obstacles to greater trade in Africa - tariffs on goods - poor human infrastructure - underinvestment in physical infrastructure - high transport costs for landlocked states (55% higher than coastal countries)
       • free trade is not always fair trade - ie trading blocks (EU) use trade barriers to protect industries - damages ability to trade

2. Economic vs Environmentally sustainability

   • Environmental sustainability - process by which environment is used and managed to supply people on long term basis while preserving genetic diversity and maintaining ecological processes.
     • link - global economy depends on natural environment as a source of resources and sink for emmisions. ability of environment to fulfil the role determines how far population can increase and economy can expand
   • Economic sustainability - how countries /companies use resources optimally to achieve responsible long term economic growth