Trade Vs Aid

Question 1

Trade

Answer 1

Exchange of goods, money + services between countries

Question 2

Aid

Answer 2

A form of help given from 1 country to another or from a charity

Question 3

What would an increase in trade allow?

Answer 3

More revenue to flow to such countries = ↑ wealth + living standards

Question 4

What does growth do?

Answer 4

Increases amount of wealth being generated = living standards rise

Question 5

Neoliberalism

Answer 5

A political theory of the late 1900s stating that personal liberty is maximized by limiting gov. interference in the operation of free markets

Question 6

Reasons for doubt that poor countries with problems could become developed through trade?

Answer 6

Cannot be competitive in global market because of great difference in wealth between them + developed countries

Cannot invest in industrial + technological development at same level as richer countries

Poorer countries depend on agricultural exports (price been falling) = cannot make a profit

Wealth from trade not always trickle down to majority of pop = gap tween rich + poor widens

Debt relief from IMF or WB = include cuts on health + education

Question 7

3 main systems though which aid can be supplied

Answer 7

Bilateral

Multilateral

Non-governmental organisations

Question 8

Bilateral aid

Answer 8

Aid given directly by gov. of one country to another

Question 9

Multilateral aid

Answer 9

Aid given by govs. to international organisations which use money to assist programmes in poorer countries (WB or UNESCO)

Question 10

Non-gov organisations

Answer 10

Distribute aid in variety of ways. Many are charities (Oxfam) raise money for development projects, ensuring aid is directed at those who need most

Question 11

4 ways aid is distributed

Answer 11

Short-term

Long-term development projects

Top-down aid

Bottom-up schemes

Question 12

Fair Trade

Answer 12

Designed to get better deal for producers of primary products

7 million benefit from it

Producers get better price for products + better access to markets

Question 13

Criticisms of aid

Answer 13

Does not always reach those who need the most + not always used effectively = corruption

Aid dependency when it becomes substantial proportion of national income

Strings attached to aid = recipient must agree to conditions of donor e.g. tied aid = recipient must spend money on goods + service in donor country

Money collected in donor countries gets swallowed up up advertising + collection costs = doesn’t reach recipient country

Question 14

Example of Aid

Answer 14

2004 Bangladesh flood = $1.4 billion