DG - How can international efforts reduce global inequalities

Question 1

How can international efforts reduce global inequalities?

Answer 1

• Loans and aid
• Conservation swaps
• Fairtrade
• (Aid)
• Possible effects of the recent global recession

Question 2

What are loans?

Answer 2

Sums of money that are paid back with interest over the years

Question 3

Why did Brazil borrow a huge sums in the 1970s?

Answer 3

• Build factories
• Manufacture goods for export + make profit

The profit was repaid back as loans (was successful but not everyone benefited)

Question 4

What is aid gifts of?

Answer 4

• Money
• Goods
• Food
• Machinery
• Technology
• Trained workers

Question 5

Is aid a loan?

Answer 5

True aid is not a loan that needs to be paid however some aid is a loan as some form of payback is required

Question 6

Why does the richer world want to relieve the poorer world if is debt burden?

Answer 6

It shows popular support to reduce poverty (march took place in Edinburgh in 2005)

Question 7

What can countries do if they are in need of fund for development projects?

Answer 7

They can burrow from other countries, world financial organisations (IMF) or international banks - if the project is successful, the debt is repaid back however if unsuccessful, it is paid back over a longer period

Question 8

Why do people in the debtor country have to work hard to produce goods?

Answer 8

So they can export the goods to fund the interest on the loan - standard of living and level of development simply cannot improve

Question 9

How can poor countries be helped by debt relief?

Answer 9

It reduces the interest rate or the amount of loan or sometimes the debt can be written off altogether

Question 10

How do debtor nations benefit from debt relief?

Answer 10

They can begin to improve life for their citizens with the money

Question 11

Why is there pressure on some rich countries to write of debts to poorer countries?

Answer 11

These poorer countries are unlikely to be able to repay the rich countries back

Question 12

How are mirco-enterprises the way forward in loan solution (use an example)?

Answer 12

They lend money to individuals in poor countries eg Sara Garcia in Lima burrowed $1,845 in 1984 to invest in equipment to make patterned handkerchiefs. She hired extra workers and family members to help

• Output has risen to 20-500 items per day
• She met her repayments on time
• Technology used was appropriate
• Business became more successful and sustainable

Question 13

What is a conservation swap?

Answer 13

Agreements made between countries where some debts are written off in exchange for environmental conservation projects being done by the debtor country

Question 14

When were the conservation swaps first set up and why?

Answer 14

They were first set up by environmental groups in the 1980s to reduce the debt problem of poor countries and to promote the conservation of important environments

Question 15

How many countries took part in the conservation swap between 1987-2001?

Answer 15

50 countries

Question 16

What was the very first swap and what happened?

Answer 16

• Between Bolivia and North America
• A North American conservation group took over $650,000 of Bolivias national debt in return for the Bolivian government setting aside a large area of rainforst as a natue reserve

Question 17

What is fair trade?

Answer 17

A system whereby agricultural producers in countries at a lesser stages of development are paid a fair price for their produce. This helps them to attain a reasonable standard of living

Question 18

What do people receive in fair trade?

Answer 18

Minimum guaranteed price for their crop, which provides them with;

• A living wage
• Long term contracts for security
• Skills training to develop their businesses

Question 19

What have been the benefits of fair trade goods consumed in the UK between 1999-2009?

Answer 19

• Volume of goods produced increased by 150% in 2006/7
• Around 7 million farmers, farm workers and their families in 58 poorer countries have benefited from the improved trading conditions
• The fair trade mark as grown rapidly in the 21st century
• Almost 70% of adults know what it means now

Question 20

How can a global recession reduce global inequalities?

Answer 20

• The problems of the wealthier countries spread to those they trade/exchange loans/ debts with
• Countries that normally donate aid will have less to give away or lend to
• As world prices decrease, poorer countries receive less for their exports meaning they no longer can pay interest on their debts to richer countries and to global financial institutions (causing further debt)