Development RWE Flashcards
(23 cards)
Pro-poor growth
Vietnam after the Vietnam war ended had a high poverty rate (over 50%) which resulted in pro-poor growth though going from a central planned economy to a market-orientated one allowing poverty rate especially in rural areas (the focus of many reforms) to decrease to 14% in 30 years since then
Infrastructure
Haiti have a lack of infrastructure due to many natural disasters and poor economic development of a HDI of just over 0.5
Appropriate Technology (Production / Consumption)
Universal nut shellers are cheap and have a one-to-one capital to labour ratio allowing to make use of large labour surpluses in these poorer countries increasing employment / due to sun being very abundant in climates typical to developing countries, solar cookers are much better and they also avoid the problem of poorer countries causing and having more impacts from environmental degradation
Spending on healthcare
Norway 2nd highest HDI of 0.966 spend around 10% GDP on healthcare whilst Somalia with a HDI of 0.380 (lowest) in 2022 only spend just above 1% on healthcare from 2020s figures
Currency Appreciation / Depreciation and debt servicing
US after tariffs and uncertainty decease currency which benefits many countries in debt with USD but Euro which appreciated makes it worse for countries with debt to the EU (having to use the Euro)
Climate and economic development
Chad has one of the lowest HDI at under 0.4 and is both landlocked and in tropical conditions
Corruption perceptions index (0-100 (100 being very clean))
Denmark highest with 90 in 2024 and South Sudan with lowest at under 10 in 2024 corresponding to their high and low respective economic development with their HDI’s also mirroring this (0.952 and 0.381 in 2022)
Aid and development
Aid can both cause economic growth and economic development though South Korea after the Korea war experiencing massive aid from international organisation and from the USA allowing investment in infrastructure and education allowing them to now be a developed country (GDP of over $1.7 trillion on top of a HDI of over 0.9 showing economic growth and development) (although still face inequality problems with the gender pay gap being over 30% showing that maybe some institutional and cultural challenges are hard to combat via aid)
FDI and development
FDI increased GDP in oil sector of Nigeria but economic development didn’t occur due to poor healthcare and education (showing the importance of these in development) ($700 million spent in these sectors in 2016 which has slowed greatly due to corruption)
Wars and development
South Sudan had a lot of civil unrest and civil wars with 1/4 of their population being displaced in the 5yrs following tribal civil unrest in the early 2010s causing a HDI 2nd lowest at 0.381 in 2022 (lack of FDI and aid due to lack of belief in growth)
Import Substitution
India’s ISI policies from 1950 caused job creation for a decade before productivity lowered greatly and poor quality goods resulted in economic stagnation until 1990 where they abandoned ISI leading to higher growth since then
Export Promotion (Manufactured goods) Pros
Asian Tigers of Japan, South Korea, Singapore, Taiwan and Hong Kong are an example of the great success of EP especially nowadays with electronics and semi conductors (Taiwan) leading to long-term growth
Export Promotion Cons
Also needs heavy amounts of government intervention through subsidies and credits (South Korea) increasing government debt as can be seen with the Asian Financial Crisis
Privatisation
Russia after the collapse of the Soviet Union sold off state-owned enterprises to private investors increasing FDI which caused export revenue to surge (oil sector especially) and an avg GDP growth of 7% in the 10yrs following this but inequality rose as by 2000 the top 1% (oligarchs) owned over 40% of wealth and public services were cut so life expectancy dropped
Business deregulation / Ease of doing business index
Singapore had the 2nd highest ease of doing business index in 2020 (WB) and although this correlated to their 5% average GDP growth in the 20yrs they also had a Gini coefficient of just over 0.45 (much worse than neighbouring countries)
Tax revenue and less debt
China in the 40 yrs after 1980 went from $1b to $150b annual FDI inflows leading to more tax revenue as their average GDP growth was 10% and poverty rate decreased from just under 90% - nearly 0% in those 40 yrs (unreliable data due to falsification of data)
Less Tax and Economic Freedom Index
The EFI says that lower tax decreases poverty - Singapore with the 2nd highest EFI in 2023 due to their low tax rates have almost 0% of absolute poverty (could be falsified since that’s uncharacteristically low)
Informal sector proportion
From the International Labour Organisation around 60% in 2018 are in the informal sector
Tied aid legalities
UK made it illegal in 2002 due to driving up prices for domestic producers that they can’t compete with
IGOs still having political pressure
Many IGO’s originate from the US (WB and IMF originate from the US and the WB head is traditionally appointed by the president of the USA) causing political pressure as seen in 2018 when the US banned US-money-receiving NGOs from providing abortions or information about them, decreasing women’s health in the developing world through more maternal deaths and unsafe and illegal abortions
Concessional Lending (IMF and WB)
Lending at ultra low interest rates as shown in 2015 with the Catastrophe and Containment trust by the IMF which provided $100m in 2015 against Ebola affected counters
Debt Relief
Before the HIPC initiative (Heavily Indebted Poor Countries) eligible countries spent more on debt servicing then Healthcare and Education now they spend 5x more on Healthcare and Education than debt servicing on average (economic development)
Policy change through IMF
In the ‘3rd World Debt Crisis’ in the 1980s the IMF made loans on the condition of adopting free market policies known as the IMF’s SAPs (Structural Adjustment Policies) (Washington Consensus) which not only reduces political sovereignty but also is more regressive and although could cause economic growth, it means less economic development
