Aid and Debt - Notes

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Intro

Flow of resources from developed to developing

A financial grant or gift (not paid back)

A loan with interest

Types of Aid

Bilateral Aid

Multilateral Aid

Emergency Aid

Developed world gives aid to developing world (Governments)

UK donates capital to agencies like; the World Bank & IMF

Humanitarian relief raised for specific circumstances

Modernization View

Crucial component required for take-off into industrialisation

View shared by policy makers & World Bank

Argued that poor would benefit in long run - wealth stimulates economy and production

Dependency View

Aid sustains unequal relationships & they question the function of aid

Reject the view that aid assists development

Rather, it functions to sustain underdevelopment to benefit Western wealth & political power

Debt Crisis

1/4 of aid Africa receives will be immediately given back in debt repayments

Dep, theorists say debt crisis bought about by:

Colonialism - developing over dependent on prod. of raw materials & cash crops

Little of money borrowed spent of effective development (oil, and 20% on weapons)

West increased interest rates - developing forced to keep borrowing to pay old debts

Costs of Debt

Oxfam - 100,000+ Ethiopian children die annually, from preventable diseases

Debt repayments are 4x more than health spending

Aid and Debt