Bridging the Development Gap

Key Words

• Development: the way a country tries to improve its economy and therefore the standard of living for its inhabitants.
• Development Gap: the social and economic disparity between the wealthy and the poor. It occurs globally (between countries) and locally (within countries)

Brandt Line

• The North - South Divide between developed and developing countries.
• 1981 (outdated)
• Wealthy North possesses 80% of wealth
• Poorer South possesses 20% of wealth
• Not taking into account the wealth disparity between countries E.g. Saudi Arabia is below the line.

Wealth of Countries

• Depending on GNI per capita: (constantly updating)
• High Income - $12736 or more
• Middle Income
• Upper-Middle Income - $4126 to $12735
• Lower-Middle Income - $1046 to $4125
• Low Income - $1045 or less

Economic Wealth

• Gross Domestic Product (GDP) per capita: dividing the monetary value of all the goods and services provided in a country by its total population.
• Gross National Income (GNI): includes income from overseas investments from organisations and residents.
• + Easy to compare development/wealth between countries (available for majority of countries)
• - Only useful in countries which have many economic transactions i.e. market economies
• - Hides extremes and uneven distribution of income between regions or socio-economic groups
• - No social factors such as freedom, human rights, happiness
• Purchasing Power Parity (PPP): shows what per capita income will purchase when the cost of living is taken into account. A PPP value which exceeds GDP per capita means that prices in the country are cheaper than average.

Social, Cultural and Welfare Criteria

• Human Development Index (HDI): gives a country a score between 0 and 1 and is based on life expectancy, education (literacy and length of schooling) and GDP.
• + Enables anomalies to be spotted and identifies where poverty is greatest
• - No measure of human rights or freedom (is a separate Human Freedom Index in 1991 but has not been done since)
• Other social factors:
• Birth rates
• Death rates
• Infant mortality rate
• Lack of clean water
• % rural population
• Types of employment
• Level of literacy

Modern Measures

• Internet Access/ Mobile Phone Access/ Landline Access:
• + Can indicate economic situation/ level of education
• - May not have internet access and still live a good life
• - Countries may have gone through leapfrogging
• Environmental Measure - CO2 Emissions
• - No indication of wealth/ social factors
• - Difficult to categorise whether they're rich or poor from this

Rostow Model

• Walt Whitman Rostow - American economist published in 1960
• This is based around the economic development that Europe and North America experienced (Linear Approach)
• Criticisms:
• Out of date
• Biased to North American and European societies
• Very simple, used just 15 European countries
• Countries can skip stages E.g. New Zealand skipped manufacturing and its economic growth came from tourism instead
• Doesn't take non-economic factors into account
• Ignores debt repayments which can prevent reaching take-off stage
• Ignores that developed countries exploited developing countries at their expense

Slide 8

• 
• Stage 1: Stagnant & static society, Social stratification, Basic subsistence agriculture, Craft industries
• Stage 2: New social and political elite, Export mining & cash cropping, Investment is about 5% of GDP
• Stage 3: Social, political & institutional change favours dynamic growth, Beginning of manufacturing industries, Investment is about 10% of GDP
• Stage 4: Decreasing social equality, Growth to all sectors of the economy, High investment
• Stage 5: Welfare capitalism, International power, Durable consumer industries, Service industries

Friedmann's Core and Periphery Model

• Argued that beneficial effects can spread from core regions to peripheral regions.
• Stage 1: Pre-industrial - The agricultural society, all places are peripheral, places are isolated, no interaction
• Stage 2: Transitional - The concentration of the economy in the core begins, interaction between places, development of basic technology
• Stage 3: Industrial - Due to the economic growth, other growth centres appear. The main reasons for this are increasing production costs (mainly labour and land) in the core areas.
• Stage 4: Post-industrial - Inequalities reduce, all places are self-sufficient , major interactions between places.
• Criticisms:
• Old (1966)
• Assumes everyone starts at the same stage
• Oversimplified
• Inequality isn't always reduced at stage 4

Slide 10

• Characteristics of Core:
• Rich/developed
• Access to modern infrastructure
• High rates of education/literacy rates
• Lots of good/ top universities E.g. Ivy League, Oxbridge
• High FDI
• High employment/ high wages
• Larger secondary and tertiary economy
• Wide variety of entertainment E.g. museums, cinemas, cultural diversity
• Characteristics of Periphery:
• Poor
• On-the-edge
• Disinvestment
• Net migration loss/ unemployment
• Low levels of literacy and small skills base
• Large primary sector economy
• Water and electricity shortages
• Poor levels of communication

Slide 11

• Core Area
• Physical Factors
• Coastline
• Available resources e.g. coal in Australia
• Close to other developed countries e.g. Europe and North America
• Stable climate (not to hot or to cold) e.g. Western Europe
• Areas of flat land that make construction easy e.g. East coast of US and SE of England
• Human Factors
• Good transport links e.g. International airport (London Heathrow)
• Good education system. Renowned academic and research universities e.g. Cambridge and Oxford in the UK and the Ivy League universities in the US
• Good medical care so that there are low death rates and high life expectancy - free from major diseases
• Good international relations e.g. member of international organisations like NATO and OECD
• Stable democracy free from conflict
• Government policy e.g the development on enterprise zones or export processing zones that encourage FDI
• Periphery Area
• Physical Factors
• Landlocked (no coastline) e.g. Rwanda and Uganda
• Mountainous e.g. Bolivia and Nepal
• Very hot (arid desert environment) e.g. Mali
• Very cold (permafrost)
• Infertile land e.g. The Sahel
• No resources
• Regular suffer from devastating natural disasters e.g. Bangladesh and flooding or famine in East Africa
• Human Factors
• Poor education system often resulting in high levels of illiteracy.
• Poor healthcare leading to high death rates and low life expectancy. Possibly high rates of diseases like HIV and malaria.
• Lack of democracy and kleptocratic government. No accountability for government officials
• Large levels of debt
• Frequent conflicts e.g. Somalia
• Possible exploitation from previous colonial power

Frank's Dependency Theory (1960's)

• Views world as having an economically developed core and an underdeveloped periphery.
• The capitalist core deliberately keeps the periphery in a state of under-development by exploiting its cheap resources, taking its most skilled workers and selling it manufactured goods.
• The developing world helps the developed world to become wealthier.
• 'The development of underdevelopment'
• Argues the developing world is placed in a position of selling its resources to the developed world for very little, while buying from it costly manufactured goods, technology and credit (loans)
• As the periphery remains underdeveloped, its most skilled people move to the developed world, further draining it of chances to develop (brain drain)
• Aid to the developing world could be seen as a way of preventing it from becoming too restless.

Slide 13

• 
• The rise of NICs such as the Asian Tigers seems to argue against dependency theory, as they're examples of countries that have developed.
• However, Taiwan, South Korea, Singapore and Japan all received huge economic support and aid from the USA,as it was felt that strong capitalist economies in Asia were a way of containing communist China.

World Systems Theory (1970s)

• 
• Wallerstein's world systems theory attempts to overcome the problem of a two-tier core and periphery world by introducing a three-tier world.
• More dynamic model as it allows for change to take place, with some countries entering the semi-periphery and even emerging to be part of the core.
• Frank's theory is much more static.

Key Player - The World Bank

• 4 Key internation institutions in development: IBRD, IDA, IFC, MIGA
• Since 1950 the World Bank has lent monies to governments of developing nations and is currently the major source of finance for development in the Third World, financing over 1900 projects.
• The IBRD lends money over 15-20 year periods and the loans are subject to interest. It provides no interest loans to the poorest countries, those with per capita incomes of less than US$1,305.

World Bank

• Successes:
• Maldives: received $37.21 million from the IDA, $45 million from the IFC. In 1980, was one of the world's 20 poorest countreis and in 2012, was an MIC with incoe per capita of over $6300 with literacy rates of 98.4%. Program focused on fisheries, tourism and their related infrastructure, education, building goverment capacity and post-tsunami recovery.
• From 2000, started delivering vaccines for HIV/AIDS. Over 13 years, AIDS drugs dropped in cost from $10,000 per person annually to $100. Prevented 3 million cases in India. 22% decrease in West Africa.
• $5 billion spent on education projects in 2010. Accomplished training for 3 million teachers, renovating/building 2 million classrooms all affecting an improved education for 105 million children.
• Failures:
• NT2 Hydropower Project in Laos. 95% of its power is exported to Thailand. Despite guarantees that revenue would be used for development programs, the World Bank admits that half of revenues are unaccounted for. The dam caused major impacts downstream for 120,000 people, suffering declining rice yields and dramatic reductons in fish catch.
• The Sardar Sarovar dam project in India displaced 240,000 Indians and was later condemned by the World Bank's own panel of investigators - World Bank withdrew from funding it.

The UN

• The United Nations is an international organisation founded in 1945. It's currently made up of 193 member states.
• The main organs of the UN are the General Assembly, the Security Council, the Economic and Social Council, the Trusteeship Council, the International Court of Justice and the UN Secretariat.
• The UN and its values: spreading democracy, promoting peace, combating world hunger etc.

The UN

• Successes:
• Worldwide, fewer people died in conflict in the noughties than in any decade of the 20th century.
• Eradicating smallpox. The WHO, led by the UN eradicated the disease in 1980.
• UNICEF, the number of deaths for children under 5 has declined from 12 million in 1990 to 6.9 million in 2011.
• In 1961 the UN created the World Food Programme. Provides food to 90 million people. The number of starving people in the world has dropped by 100 million in the last decade.
• In 2010 and 2011, during the earthquake disasters in Haiti and Japan, the UN stepped in and provided aid in food supplies and other necessities.
• Failures:
• Rwandan Genocide: the UN had an Assistance Mission for Rwanda in 1994, which knew about the impending genocide, but its peacekeepers failed to stop the majority Hutus killing almost a million members of the Tutsi minority.

World Trade Organisation

• The WTO is an intergovernmental organisation which regulates international trade.
• Officially commenced in 1995 under the Marrakesh Agreement, signed by 123 nations on 1994.
• Deals with the regulation of trade between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants adherence to WTO agreements.
• Its main function is to ensure the smooth and free flow of global trade.

WTO

• Successes:
• Helped eradicate trade barriers
• A lot of international trade tension is reduced because countries can turn to the WTO to settle the trade disputes
• Least developed countries receive extra attention - in 2002, the WTO organisation adopted a work programme for the least developed countries. It consists of improved market access, more technical assistance, support for agencies working on the diversification of their economies.
• Failures:
• Politicians can negotiate for regulations that wouldn't be possible or accepted in a democratic process in their own nations.
• Highly biased to developed nations - rich countries can maintain high import duties, blocking imports from developing countries, can also maintain heavy subsidies in agriculture.
• In developing countries, 4/5 of people make their living from the land but the leading principle in the WTOs agreement on agriculture is that market forces should control agricultural policies.
• Failure of Doha round partially caused by WTO not fully endorsing multilateral agreements.

Non-Governmental Organisations

• An NGO is a not-for-profit organisation that's independent from states and international governmental organisations.
• Usually funded by donations but some avoid funding and are run primarily by volunteers.
• They're highly diverse groups of organisations engaged in a wide range of activities, and take different forms in different parts of the world.
• Some may have charitable status, while others may be registered for tax exemption based on recognition of social purposes.
• Others may be fronts for political, religious or other interests.
• Estimated to be 3.7 million NGOs worldwide.

Water Aid (NGO)

• Successes:
• Rope pump in Ghana: Produced with local materials. Can be operated and maintained at a village level. If produced and installed well, is sustainable, can last for 20 years or more. 120,000 used worldwide. A survey among 5025 rural families in Nicaragua indicates that a rope pump increases family income. Can be 3-5 times cheaper than foreign imports. Rope pumps in Northern Ghana supported by Water Aid were successful and after improvements, some 1600 were installed.
• 2015, in Ghana, they reached: 70,000 people with safe water, 49,000 people with improved sanitation.
• Failures:
• 2009 in Tanzania: 54% of 65,000 water points nationwide were operational. 46% of public improved water points in rural areas were not functioning. Up to 7.5 million rural Tanzanians lack access to clean and safe water due to functionality problems.
• In 2013, 35% of 30,182 water points surveyed were non-functional.

Governments

• A government is the system by which a state or community is controlled.
• Normally consists of legislators, administrators and arbitrators.
• Government is the means by which the state policy is enforced, as well as mechanism for determining the policy of the state.

Governments

• Successes:
• Many richer nations provide funds to the global fund to fight HIV, AIDS, TB and Malaria.
• US foreign aid in Israel since 1985.
• Many developed countries provide benefits to those in their own countries.
• Failures:
• AID and other donors have encouraged developing countries governments to rely on handouts instead of themselves for development
• AID often goes to corrupt governments
• In Indonesia, the government confiscated subsistence farmers plots for aid-financed irrigation canals.
• In Mali, farmers were forced to sell their crops at giveaway prices to a joint project of aid and the Mali government.
• In Egypt, Haiti and elsewhere, farmers have seen the prices for their own crops go down dramatically when US free food has been given to other countries.

Trade and Investment

• Trade Surplus: exports exceed imports
• Trade Deficit: imports exceed exports (may lead to debt trap)
• Trade Blocs: countries that group together and have special terms on trade
• Terms of Trade: is the ratio between currencies earned from its exports (a unit price index is normally used) and the prices of imports

Trade flows narrow development gap?

• TNC investment means more jobs (also more manufactured goods) - more disposable income - multiplier effect (however very low wages are often paid and workers made to work long hours)
• FDI can mean schools/infrastructure is set up = more educated population
• Trade can create long-term employment = stable wage = multiplier effect
• Compared to short-term aid after natural disasters (eg Asian tsunami, Haiti earthquake) trade provides long-term employment and a basis to create a multiplier effect.
• In 1981, many wealthy countries committed to giving 0.7% of their GDP to international aid - by 2008 only 5 countries had done this - Norway, Sweden, Denmark, Luxembourg and the Netherlands.

Extreme Poverty in Africa

• Climate - drought, desertification, soil erosion
• Landlocked countries
• Civil War
• Corruption
• Lack of investment - left behind by globalisation
• Cycle of poverty (see flowchart)
• Raw materials sold cheaply to developed countries/ low value goods traded
• The area that has remained the place with the highest percentage of the population living on less than $1 a day is sub-saharan Africa who from around 1985 to 2003 have had roughly 45% of the population living on less than $1 a day.

Development differences within countries

• Caste System - India
• Race - Apartheid
• Religion - Bahai in Iran
• Urban vs rural areas (urban has multiplier effect/ rural has cycle of poverty)
• Within urban areas - slums in megacities
• Women

Indian Caste System

• 
• Outcasts: rural/ illiterate people in the modern day
• Sudras: soldiers in the modern day
• Vaisyas: professional/ trained people in the modern day
• Kshatriyas: bureaucrats, government jobs in the modern day
• Brahmins: politicians, industrialists in the modern day
• Can't intermingle/ intermarry between groups

Women

• China, during one child policy - favoured boys
• More likely to be unpaid family workers or occupy low-status jobs and have lower earnings
• Mother - cooking, cleaning, collecting water, looking after home
• Lack of education - not earning money
• Limited participation in politics and government, which makes it difficult for them to influence policy
• In developing countries, 1 in 61 women die during pregnancy or childbirth. In LEDCs, the figure is 1 in 17
• 64% of illiterate adults are women
• 57% of children who receive no primary education are girls

Poverty in Megacities

• Megacity: population of more than 10 million people.
• Differences in population growth:
• Tokyo - 37M in 2011, 39M in 2025 (+5%)
• Dhaka - 15M in 2011, 23M in 2025 (+53%)
• Beijing - 16M in 2011, 33M in 2025 (+44%)
• LA - 13M in 2011, 16M in 2025 (+23%)
• Reasons for more of an increase: natural increase (lack of contraception in LICs), rural-urban migration (push/pull factors), outsourcing/investment
• Reasons for less of an increase: counter-urbanisation, pollution, less inequality between rural and urban areas, expensive in the city, less traffic in rural areas

Housing in Developing Megacities

• As cities grow, the cost of meeting basic needs increases (housing, infrastructure and services - also pressure on the environment).
• New migrants to a city often have little money, so they can't rent a home or borrow money to buy one.
• Land and housing regulations add extra difficulty.
• New migrants either: move in with friends or relatives, sleep on the street or build a makeshift home on unused land.
• The temporary settlements tend to occur on land that is: steep/ marshy/polluted, alongside transport routes/ on former abandoned farmland.
• Most urban poor don't have tenure security because their dwellings are illegal.
• Many people also rent in slums without formal contracts.

Deprivation in Developing Megacities

• Limited access to employment opportunities and income
• Reliance on the informal economy (not paying tax - unstable income)
• Inadequate, overcrowded and insecure housing and services (disease/ illness)
• Violent and unhealthy environments due to the density and hazardous location settlements and exposure to multiple pollutants
• Little or no social protection mechanisms - little support from police/ no legal rights
• Limited access to health and education or infrastructure (telephone and internet services)
• Limited access to credit facilities

Environment in Developing Megacities

• Development and poverty reduction are often at the expense of the environment, unless there is careful management or significant efforts to promote sustainable development
• Cities in developing countries are affected by the 'brown agenda' associated with economic development. 2 components to this:
• Environmental health issues linked to limited availability of good-quality land, shelter and services such as clean water and sanitation.
• Problems resulting from rapid industrialisation, such as toxic or hazardous waste; water, air and noise pollution, and industrial accidents due to poor standards of health and safety.

The Consequences of Development

• Positives:
• More employment
• Higher wages
• More investment
• Better infrastructure
• Higher literacy rate
• More migration - human resources enhanced, labour needs filled, higher pay for skilled workers who then pay taxes, multicultural society.
• Multiplier effect - periphery nations
• Negatives:
• Higher inequality (rich get richer and poor stay the same)
• More money = more cars and industry = more pollution
• Ecological footprint of a country increases (this is the amount of land and water required to provide a person - or society - with the energy, food and resources they consume and to absorb the waste they produce)
• Bad for Core - if periphery develops (not always though)
• More migration - racial and social tensions, 'white flight' of original population, increased pressure on resources unless their contribution to the economy raises living standards, social support if unemployed; educational demands; illegal and/or exploited labour; low pay if unskilled; Areas dominated by a particular group - ghettoisation and segregation.

Reducing the Development Gap

• Internal:
• Political stability
• Government investment in infrastructure, ICT, social services and local communities
• Food security
• Increased resources for healthcare and HIV/AIDS
• Addressing inequalities between regions, male/female, rural/urban
• Legal empowerment of the poor and pro-poor strategies
• External:
• Global economy and economic growth
• Globalisation trends
• Aid and foreign investment
• Trade strategies
• Tourism development
• Debt reduction or cancellation
• Internal cooperation

Reducing the Development Gap

• In 1965, the poorest 20% of the world's population earned 2% of the global income, by 1990 it had fallen to 1.4% and is now about 1.3%.
• The challenge is a 2 stage one:
• The first is to halt the growing difference between rich and poor nations.
• The second is to narrow the development gap and to achieve a more equitable world.
• The widening development gap between rich and poor will only be halted and then closed by a concerted effort on a number of different fronts.

Aid Strategies

• Humanitarian Aid: aims to alleviate suffering in the short term e.g. after natural disasters
• Development Aid: aims to address poverty in the longer term.
• Project Aid: is tied to large-scale schemes such as the construction of major dams.
• Voluntary Aid: tends to come from NGOs that raise money in developed countries for use on small-scale projects e.g. to sponsor a village or build and equip a medical centre.
• Different types of donor:
• Bilateral Aid: involves a one-to-one relationship between donor and recipient country.
• Multilateral Aid: involves donor countries giving to organisations such as the World Bank, a UN agency or Oxfam, which then distribute the aid to needy causes.
• OECD = Organisation for Economic Cooperation and Development. They provide Official Development Assistance (ODA) given via a government to government basis or through international institutions e.g. World Bank, UN, Oxfam

Bilateral Aid

• Positives:
• Provides investment for projects and development
• Aid helps expand infrastructure: roads etc
• Aid which directly supports economic, social or environmental policies can result in successful programmes.
• Negatives:
• Major powers tend to direct their aid to former colonies or countries with which they have significant strategic ties, economic interests or potential markets - often aid money is spent on goods/services from the donor country which are expensive (Tied Aid)
• Inappropriate technology may be given
• Aid can go towards the building of expensive buildings which mainly helps the urban rich
• Large- scale projects, such as dams, may damage the environment
• The unreliability of the flow of aid
• Aid may never reach the people who need it

Multilateral Aid

• Positives:
• Tends to be less tied to the political self-interests of individual donor countries - money/aid more likely to go to where it's needed
• UNICEF (United Nations Children's Fund) aims to build a protective environment for children and provide them with health and education
• FAO (Food and Agriculture Organisation) leads international efforts to eliminate hunger
• Negatives:
• Aid money wasted on countries with corrupt regimes that have misused the funds
• The IMF and the World Bank have a history of making loans to countries on various conditions eg. accept western free-market economic policies, privatising their public services, deregulating investment, and liberalising trade
• Big business reaps the benefits and the poor are left
• Structural Adjustment Programmes (SAPs) are to promote growth and reduce poverty. An IMF 'stabilisation loan' is offered, with conditions. The result, in many cases, has been to force them to reduce spending on health, education and development, while debt repayment and other economic policies have been made the priority.

Non-governmental/ Charity Aid

• Positives:
• Long-term Aid
• Dealing with root causes of poverty
• Health programmes: maintaining basic health facilities, eradicating malaria and other diseases
• Food production, water supplies, education
• Technical assistance eg. training farmers to increase efficiency and prevent soil erosion
• Short-term Aid & Emergency Aid
• Helping refugees to rebuild homes and provide farming equipment in order to enable them to be self-sufficient
• Medical and sanitation supplies
• Negatives:
• Charities may not provide the greatest sources of need. £250M was raised by charities for the tsunami disaster - but areas affected by the tsunami arguably suffered no greater problems than are faced everyday by regions of sub-saharan Africa.
• Up to 30% of revenue remains in the country of origin to cover administration costs.
• As with other kinds of aid, corruption amongst politicians and officials may prevent the aid from reaching the people who need it.

Trade and Investment - Reducing the Gap

• Trade expansion is a key driver of growth.
• Developing countries share of world trade tripled from 12% in 1995 to 36% in 2006.
• South-South trade is becoming increasingly important.
• Developing countries are keen to attract FDI (Foreign Direct Investment) to help development and reduce the gap.
• Managing Trade - removal of barriers/ tariffs/ quotas. Key Player = WTO, Governments setting up SEZs
• Trade Agreements - mainly bilateral between developing and developed countries. Key Players = NAFTA, ASEAN, EU
• Doha Development Agenda - develop better trade conditions, allow access to EU and US agricultural markets in return for opening up more doors for EU and US goods/services. Key Players = EU, WTO, USA

Managing Trade

• Positives:
• In SEZs (which offer incentives for TNCs to locate there such as preferential tax rates), the host country earns foreign income and often increases the skills of its workforce eg. China.
• The rise of emerging economies like India , China and Brazil demonstrates the potential of trade-driven growth to lift millions out of poverty.
• South-South trade has outstripped North-South trade since 2007.
• Trade does tend to reduce poverty, but only in specific settings: in countries where financial sectors are deep, education levels high and governance strong.
• Negatives:
• Terms of free trade are unfair as richer countries gain at the expense of developing countries.
• LDCs and other countries most in need have remained marginalised, as they're often held back by lack of productive capacity, economic diversification and infrastructure and poor governance.
• Increased access to the competitive global marketplace benefits only nations whose industries have something to sell which foreign trade barriers are currently keeping out. Their industries must both be strong enough to be globally competitive and have pent-up potential due to trade barriers abroad - a fairly rare combination.
• Over the last 30 years of greatly expanding free trade, most of the world's poor nations have seen the gap between themselves and the rest of the world increase.

Trade Agreements

• Positives:
• Trade blocs encourage free trade within their boundaries.
• For developing countries: concessions that aren't given to other countries eg. better market access for their products; New trading opportunities eg. increase in Mexican manufacturing exports with NAFTA; More FDI attracted.
• Generally: removal of trade barriers promotes expansion of trade, which increases wealth and benefits everyone; Free trade concentrates production of goods and services where they're cheapest and most efficient, lowering prices to the benefit of consumers.
• Negatives:
• Trade blocs put up barriers to external countries - this gives more protection to rich than poor countries.
• For developing countries: If TNCs based in rich countries gain access to poor-country markets, local producers are put out of business; Local firms have to comply with rules of origin regulations; preference negotiated by 1 poor country with a rich country may be eroded if other agreements are made.
• Generally: Many agreements are biased to rich countries' interests; Subsidies to farmers in rich countries reduce the effect of agreements; Low skilled workers in rich countries lose out as manufacturing is moved abroad.

Doha

• Positives:
• A study by the University of Michigan found that if all trade barriers in agriculture, services and manufactures were reduced by 33% as a result of the Doha Development Agenda, there would be an increase in global welfare of $574 billion.
• Negatives:
• The main issue with the failure of Doha was agricultural trade, especially for the US and the EU that heavily subsidise this sector. Negotiators showed concerns that the severe tariff cuts would affect their economies without any significant gains - couldn't get them to agree to tariff cuts.

Fair Trade

• Fair Trade: expresses a wider vision of development, covering a much wider range of products that can be certified and embracing campaigning and awareness raising activity, as well as trading in food products.
• Fairtrade: is an accreditation, labelling system which certifies that products bearing the Fairtrade mark meet a range of specific criteria.

Fairtrade

• Positives:
• Stable and fair price throughout the year for goods for farmers
• Improves living standards for farmers
• Encourages development in LICs
• Chocolate, coffee, tea etc (sometimes cotton)
• Multiplier effect from more disposable income
• Farmers not allowed to employ children and must have good working conditions for workers
• Fairtrade also invests in the communities - schools, medical care, infrastructure, water supply
• Negatives:
• Products are more expensive for consumers
• Not all money goes to producers, goes to running costs for Fairtrade, companies in HICs still take the raw material and turn it into a more expensive product and sell it for lots more
• Limited range of products that carry the mark
• Some issues with child labour found

Fairtrade Mark Requirements

• A minimum price
• Credit terms
• A long term trading commitment
• The price paid involves a premium for the workers or producers to improve their living and working conditions
• The producer, co-operative or plantation owners must ensure:
• Minimum wage
• Adequate housing where appropriate
• Minimum health and safety standards
• Environmental standards

Future Actions/ Strategies

• The poorest 49 countries have debts totaling US$375 billion
• The poorest 144 countries have debt of over US$2.9 trillion
• During 2006, these countries (the 144) paid over $34 billion to the rich world in debt service
• Heavily Indebted Poor Countries (HIPC)
• Group of 39 developing countries with high levels of poverty and debt which are eligible for special assistance from the IMF and World Bank
• Began in 1996
• Provides debt relief and interest free loans to reduce external debt to a sustainable level

Debt Reduction

• Countries must meet certain criteria, commit to poverty reduction through policy changes and demonstrate a good track record over time. The Fund and Bank provide interim debt relief in the initial stage, and when a country meets its commitments, full debt-relief is provided.
• First step: Decision Point:
• To be considered for the HIPC Initiative Assistance, a country must fulfill the following conditions:
• Be eligible to borrow from the World Bank's International Development Agency, which provides interest-free loans and grants to the world's poorest countries, and from the IMF's Poverty Reduction and Growth Trust, which provides loans to low-income countries at subsidised rates.
• Face an unsustainable debt burden = debt-to-export ratio of 150% and a debt-to-government-revenues ratio of 250%
• Have established a track record of reform and sound policies through IMF and World Bank-supported programs
• Have developed a Poverty Reduction Strategy Paper (PRSP)
• The first stage is the decision point. Once a country reaches this point, it may immediately begin receiving interim relief on its debt service falling due.

Debt Reduction

• Second Step: completion point:
• In order to receive full reduction in debt available under the HIPC Initiative, a country must:
• Establish a further track record of good performance under programs supported by loans from the IMF and the World Bank;
• Implement key reforms agreed at the decision point
• Adopt and implement its PRSP for at least one year
• Once a country has met these criteria, it can reach its completion point, which allows it to receive full debt relief committed at the decision point.

Future Strategy - Tourism

• Biodiversity and scenery can attract long-haul tourism from developed countries.
• Tourism generates a multiplier effect. Profits increase and they go into the local economy and leads to emergence of local suppliers of food, clothes, souvenirs and tourist services and a decrease in reliance on foreign imports.
• However, vulnerable to downturns in world economy, changing fashions in destinations, terrorist incidents (Tunisia 2015 - tourists fell from 5 million to 4 million in 2016) and disasters (2004 Asian Tsunami)
• Egypt, which has experienced several years of political unrest, saw an average annual decline in UK visitor numbers of 18.5% from 2010 to 2014.
• If developed by foreign investors, profits will go to developed countries.
• Can lead to localised inflation, making basic foods and services too expensive for local people (Costa del sol)
• Other sectors of the economy may be affected (young migrants moving to work in tourism may lead to labour shortages in farming)
• Tourism can overload the physical infrastructure of water, sewerage and road systems
• Tourism can degrade the environment (litter, traffic)
• Ecotourism: involves small-scale ventures based in local communities and with minimal environmental impact.
• At present, ecotourism only meet a small part of the mass tourism market and it's not what every tourist wants.

Future Strategies - Technology

• Spread of ICT, including mobile phones and the internet can play a big part in bottom-up development.
• Use of tech is still uneven - digital divide.
• Access to mobile phones in developing countries can help to bridge the digital divide - a mobile phone doesn't require the same literacy level as a computer, and it's a cheaper means of information. Africa is the fastest growing mobile network in the world eg. mobile banking in Kenya
• Technological change enables advances in medicine, communications, agriculture, energy, manufacturing which can improve health, education, standard of living - enabling economic growth.
• Can provide employment eg Barefoot College

Future Strategies - Legal Rights

• The UN regards legal empowerment of the poor as a valuable way forward. This involves ensuring such things as property rights, access to justice and labour rights and making it easier for people to start, own and pass on businesses.
• One important issue is to ensure that women as well as men gain these rights.

Future Strategies - South-South Links

• There's a growing realisation that poor nations might find appropriate, low-cost and sustainable solutions to their problems in other developing nations rather than in the rich 'North'
• In 2007, South-South trading overtook North-South trading.
• Eg. China and Africa - China has increased its aid to African governments, cancelled US$10 billion of debt. This is to sustain its supply of raw materials. China buys about a third of its oil from Africa, mainly Angola.