aid and debt

Question 1

bilateral aid

Answer 1

given to the government of one country to the government of another

known as ‘official development assistance’

75% of UK aid was bilateral

Question 2

definition of aid

Answer 2

the flow of resources from developed countries to the developing world, which can take the from of a financial grant, or a loan with interest

Question 3

multilateral aid

Answer 3

governments donate capital to multilateral agencies such as the World bank, IMF, EU and UN

the multilateral agencies then use the money as loans

Question 4

who are the two biggest international lenders

Answer 4

The World Bank

The International Monetary Fund (IMF)

Question 5

The world bank

Answer 5

official goal ‘to reduce poverty’
lends to LDC’s
aims to promote foreign investment and international trade
long term loans mainly for infrastructure development, to allow countries to develop economically and repay loans

Question 6

IMF

Answer 6

steps in to assist with financial crises

short term loans to resolve an immediate problem - but with conditionality (structural adjustment)

Question 7

structural adjustment

Answer 7

loans may be made to LDC’s if they comply with IMF policies - e.g. reduction in overall government spending

this often means reducing services and benefits for the population

essentially a neoliberal approach to economic development - this meant privitisation, opening markets, and cutting back on government spending

Question 8

commercial lending

Answer 8

banks and other companies lend to countries at high rates of interest

these lenders are often backed by governement support so can make risky loans knowing that they will be protected

by 2024, low-income countries owed over 40% of their debt to private lenders

Question 9

non-govermental organisations

Answer 9

charitable organisations e.g. oxfam and save the children

money raised via public donations

tend to focus on small-scale projects, working with voluntary local groups rather than governments of developing countries

Question 10

4 types of NGO approaches

Answer 10

the welfare approach

the developmental approach

the empowerment approach

the educational/ campaign approach

Question 11

the welfare approach

Answer 11

provides relief and humanitarian assistance

less likely to be concerned with politics

attractive to public and governments

e.g. red cross

Question 12

the developmental approach

Answer 12

e.g. water aid

aid for health, housing, educational projects etc.

may involve volunteers or ‘experts’ or just support local groups

Question 13

the empowerment approach

Answer 13

more radical and political

aims to empower local people and educate with reference to ‘rights’

problematic as dominant groups can be challenged

e.g. amnesty international

Question 14

the educational/ campaign approach

Answer 14

raising public awareness of broad developmental issues

this approach is often mixed with other forms

e.g. oxfam

Question 15

Aid is a ‘good thing’

Answer 15

Sachs/ Collier/ Gates
- aid solves the ‘poverty trap’

modernisation theory
- economic investment
- cultural education

Question 16

aid is a ‘bad thing’

Answer 16

easterly/ Mayo
- aid ‘props up’ corrupt government
- aid doesn’t ‘trickle down’
- aid doesn’t create economic development

Dependency theory
- exploitative (debt)
- creates reliance on donor countries
- Neocolonialism e.g. tied aid

Neoliberalism
- aid creates dependency culture

Question 17

top 2 countries recieveing Aid from the UK

Answer 17

Ukraine - 250 million
Ethiopia - 164 million

Question 18

feminist viewpoint on aid

Answer 18

aid focussed on women’s issues

patriarchal control

Question 19

emergency aid

Answer 19

given in response to a natural disatser, humanitarian crises or conflict

in the UK this is coordinated by the Disasters Emergency committee which brings together NGO’s to focus on a particular problem

Question 20

Neo-populist (NGO) viewpoint of aid - positive

Answer 20

argue that aid has a crucial role to play in development

but: it needs to be people centred, small scale and appropriate, and focus on the needs of the people rather than large scale aid projects

Question 21

modernisation theory of aid - positive

Answer 21

official aid is a crucial component required for take off into industrialisation

aid aimed to change cultural attitudes by setting up meritocratic education systems focused on literacy, and family planning programmes targetted from freeing women from the dependency created by the patriarchal family system - aid helps to change values

money would ‘trickle down’ to the poorest but start with the elites in developing countries

countries were advised to spend aid money on western technology and experts to improve agriculture and speed up industrialisation

Question 22

aid as ‘dependency’ - neoliberalism

Answer 22

low levels of investment in LDC’s due to failure of wealthy to keep money in banks

Question 23

Moyo - Dead aid - neoliberalism

Answer 23

aid is easy money that fosters corruption and distorts economies, creating a culture of dependency and economic laziness

western aid has been a hinderance for many countries

large levels of corruption in developing countries means that the aid may not reach the people it is intended for

Question 24

Dichter - neoliberalism

Answer 24

aid should be limited to emergencies and refugee assistance, and maybe some limited technical assistance on the issues of good governance and property rights

otherwise aid will only fuel corruptions as well as inequality, poverty and other issues

Question 25

aid as 'imperialism' - Hayter

Answer 25

describes aid as the 'smooth face of imperialism' developed countries continue the domination of less developed countried through the giving or withdrawing of aid indigenous bourgeoise (local elites) collude with foreign investors to exploit the poor reliance on foreign investment and debt is created TNC's gain from aid programmes in developing countries - e.g. if EPZ's are paid for by loans from World Bank the donor county may want economic or strategic benefits from the aid

Question 26

political agenda of aid - dependency theory

Answer 26

allocation of aid may depend on whether the political ideology and practices in the country needing aid align with the donor country e.g. the USA and UK refused to give aid to ethiopia on the grounds that they had a marxist government, despite warnings of potential famine by the UN

Question 27

economic agenda of aid - dependency theory

Answer 27

neo-marxist - economic motive at the heart of all official aid, the expansion of global capitalism e.g. a substantial number of jobs in the UK depend on orders from developing countries using aid

Question 28

the 'aid business' - dependency theory

Answer 28

large employment comes from aid large amounts of aid are spent on large salaries, administrative expenses and attendance at international conferences Hancock 1989 - aid has developed monsterous projects that have devastated the environment and ruined lives

Question 29

three solutions to debt

Answer 29

structural adjustment plans debt write-offs highly indebted poor countries initiative

Question 30

structural adjustment plans - neoliberal approach

Answer 30

IMF and WB plans to rebalance countries economies and help hem out of the debt crisis loans were tied to government spending plans, which meant privitisation, opening markets and cutting back on government spending

Question 31

debt write-offs

Answer 31

lessening the amount of debt or completely writing them off retains incentives for countries to develop 21 countries qualified for debt cancellation after the G8 gleneagles meeting in 2005

Question 32

Highly Indebted Poor Countries initiative (HIPC)

Answer 32

designed to provide debt relief to the most indebted countries 36 countries receive debt relief, debt service paid declined by 1.5% of GDP between 2001 & 2015 - increased in recent years Ao3 - argued that it takes too long to qualify - as it took 6 years, and that there are too few countries included

Question 33

George (1993) the 'debt boomerang'

Answer 33

debt has negative consequences for developing countries and developed countries the massive increase in debt and debt needs to be cancelled if the developing countries are ever going to actually 'develop' 6 main negative impacts debt has - environmental, unemployment, drugs, immigration, taxes and conflict

Question 34

the debt boomerang - unemployment

Answer 34

exports to LDC's would be higher if countries weren't affected by larger debts loss of jobs due to 'lost exports' is suggested to be 1/5 of all unemployment in the US

Question 35

the debt boomerang - drugs

Answer 35

illegal drugs is a major source of income in heavily indebted countries e.g. columbia social and economic costs of illegal drugs in the north are high - estimated to be $60 billion in the US

Question 36

the debt boomerang - immigration

Answer 36

people will attempt to flee poverty and move towards wealthy countries refugee numbers are increased by the unrest caused by poverty and conflict over limited resources

Question 37

debt as a form of neo-colonialism - dependency theories arguments regarding debt and multi-national corporations (MNC's)

Answer 37

governments of LEDC's are repaying debt to already wealthy banks, rather than spending it on infrastructure and health , which contributes to high death rates and poverty as there is no budget for healthcare and education South Africa has argued that big multinational drug companies are keeping the price of HIV/ AIDS drugs high and above the price that ordinary South Africans can afford, and the manufacture of the drugs is relatively cheap

Question 38

how much money did global south governments pay in interest payments to debt lenders from 1970-2022?

Answer 38

2.5 trillion