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Flashcards in Poverty And Development Deck (11):

The North-South divide is an outmoded model

+ South has since grown massively, with the G7 being replaced by the G20 and the OECD being forced to expand

+ South-South trade makes it independent from the North

- North still dominate the global stage

- Divide might still be growing


Key features of the Orthodox view

- Monetary view of poverty

- Assumption that engaging with the free market leads to growth

- Advocates adopting Washington Consensus to end poverty


Key features of the Alternative view

- Wider measure of poverty than just money

- Solutions to poverty should be sustainable

- Rejection of Free Trade and the like


Differences between colonialism and neo-colonialism

1) Global financial institutions exert control rather than states

2) Relationship between controller and controlled isn’t, in theory, wholly exploitative

3) Cultural domination is done through casually promoting Western values rather than taking authoritative action


Arguments against Free Trade

- Infant Industry

- Tariffs are an important source of income for weaker governments

- Free Trade can fuel crime and corruption


International Aid is effective

+ It helps poor states to overcome structural barriers to development

+ Moral duty to supply it

+ Can prove vital in times of emergency

- Aid creates dependency

- Aid fuels corruption

- Dutch disease wherein aid distorts currency and damages exports


Fair Trade is an effective alternative to Free Trade

+ Ensures fair pay and working conditions

+ Promotes environmentally friendly practices

+ Fair Trade takes power away from the West and puts it in the hands of producers

- Distorts market forces

- Expansion of Free Trade would be more effective

- Inefficient as money is taken by supermarkets


Sequence of events in the Third World Debt Crisis

1) Poor states, starting with Mexico in 1982, start declaring they can’t pay debts

2) Northern banks had been counting this debt as an asset. Without repayments they realise they could collapse

3) Poor states begin having to make drastic cuts to health, education and infrastructure

4) IMF and World Bank try to step in, but loans are conditional and only build more debt


Debt cancellation is an effective means of ending poverty

+ Allows states to invest in health and education instead

+ IMF and World Bank are inflexible as they act for their creditors, not for the states they help

+ Investment in capital goods could instigate long term development

- Setting a precedent of debt relief could be dangerous

- Risk of collapse of Western banks who count current debts as assets

- More money for corrupt officials?


Globalisation has increased global poverty

+ Globalisation is basically neo-colonialism

+ The global system preserves and widens inequality

+ Globalisation increases intrastate inequality in rich and poor states alike

- Rostow’s Modernisation theory shows there is only one path to development

- Globalisation actually reduces poverty and inequality eg in China

- The poor get less poor


The IMF and World Bank have failed the world’s poor

+ Act in the interests of the North and adhere to orthodox views on poverty

+ SAPs have had a lasting impact on healthcare and markets

+ Focus on economic reform endangers environment and human rights

- Market liberalisation is the only way forward

- Reforms since SAPs like PRSPs and HIPC

- IMF and World Bank support initiatives world wide that are doing good