Aid and Debt
- Created by: Joseph Timoney-Smith
- Created on: 09-04-15 10:48
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- Aid and Debt
- Types of aid
- Bilateral
- Directly from one government to another
- DIFD who give 7% of Britain's GDP to countries like India and Bangladesh
- Multilateral
- When a country gives an organisation such as the UN who then choose what to do with the aid
- Groups like the UN or World Bank finance infrastucture projects or development projects like bottom-up development schemes such as HEP or solar
- NGO's
- NGO's in the UK raise over £50 millionand put this towards small irrigation schemes in developing countries
- Bilateral
- Dependency theory and aid
- The political agenda of aid
- During the Cold War, countries were rewarded with aid if they aligned themselves with the capitalist world
- The Ethiopian famine in the '80s was worsened by the fact that the US and UK gov refused to give aid on the grounds that they had a Marxist government
- This is the same today, countries must still align themselves with the instrest of the west or no aid for you
- During the Cold War, countries were rewarded with aid if they aligned themselves with the capitalist world
- The economic agenda of aid
- Neo-Marxists argue that there is an economic motive at the heart of all official aid and favors the expansion of capitalism
- Aid is aimed at opening up new markets for western goods and services
- This is supported by the amount of tied aid coming out of the UK - over 75%
- This means that in return for what the UK offers in aid, countries must prioritise trade with the UK, with goods at reduced prices
- Evidence also suggest that aid given to Indonesia and Malaysia was used to secure weapons
- John Major, the PM at the time, admitted that he was looking out for Britainish interests in foreign countries
- This is supported by the amount of tied aid coming out of the UK - over 75%
- MOney that could have gone to eradicating extreme poverty but insted goes on loan repayments
- Modernization and aid
- Due to globalization a "global village" - diseases like tuberculosis are making larger impacts
- Bangladesh have actually become poorer as TNC's exploit the work force and diseases have become more difficult to eradicate
- Aid also reinforces western values
- As education system are funded by western NGO's or IGO's mean meritocracy whislt trying to give rights to women under patriarchal societies - this causes societal conflict
- Due to globalization a "global village" - diseases like tuberculosis are making larger impacts
- Aid sustains unequal relationships
- Aid only benefits western monopoly of wealth, consumption and political power
- Hayter argues that it is a form of neo-colonialism
- The political agenda of aid
- The debt crisis
- IN 1980 the debt owed was $600 billion, by the '90s it was $2.2 trillion
- The majority of the problems were the colonial era that resulted in the exploitation of African countries minerals and metals as well as the displacement of locals
- Some solutions include SAP (Structural Adjustment Programmes) which deduct the fees of debt but in return western companies privatise of economic development
- The money borrowed was not spent of economic development but on war and tourism
- The majority of the problems were the colonial era that resulted in the exploitation of African countries minerals and metals as well as the displacement of locals
- IN 1980 the debt owed was $600 billion, by the '90s it was $2.2 trillion
- Aid: good or bad?
- Erixon says aid has failed despite the billions of dollars, because
- The money is used in the worng way (kleptocracy too)
- Aid has stopped the development of free trade and foreign investment
- Sachs says it works when it is specifically targetted
- aid has eradicated dieases, improved yeilds due to technology (green revolution in India)
- Aid has brought over 12% of economic growth in Mozambique
- aid has eradicated dieases, improved yeilds due to technology (green revolution in India)
- Erixon says aid has failed despite the billions of dollars, because
- Types of aid
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