Debt = A sum of money that is either owed or due. Trotsky - 'Privilage of backwardness' way less dev countries could catch up by buying advanced tecnology rather than have to pay for developing it themselves.
Loans often come with compound interest = pay more per year with the amount + the longer they have it. Causes countries to aim to repay their debt rapidly causing other areas of society being ignored eg Health care and Education.
Zambia - copper cables being replaced with fibre optic cables. 27 years copper industry = 25% GDP but in 1990 copper mines were closed = unemployment. GDP fell causing loan to reach two and a quarter times countries actual GDP. Prior to this the Gov't had paid for education, healthcare and other services = reduction in pop's SOL and QOL = human development indicators fell.
Franks dependency theory
UNICEF - 10 million children -5 die each yr from preventable diseases or polluted drinking water. Also 1,400 woman die during pregnancy or birth through inefficient health care systems. poorest spend more on servicing external debt than they spend on their total healthcare budget.World bank said countries who received debt canc + social spending by 45% + ops and - inequlities
Discrimination and unrest
Apartheid - S.Africa between 1978 and 1990. Policy that divided the country's population into 3 - whites, coloureds and blacks.
Blacks - 19 million > Whites - 4.5 million = 1978
Income ratio Blacks to Whites 1 : 14
Blacks lived in Townships - Blacks were the original residents of S.Africa but Whites in power
Black children - $45 a year - White children - $696 a year for education
Without apartheid SA could have been one of the richest countries in the world, but policy restricted development due to largest % of pop being in a poverty trap as Whites were developed.
Boycotts occured internationally - even withdrawn from 1964 olympic games.
44,000 Blacks per doc < 400 Whites per doc
75% national income to Whites
Trade blocs - Banana wars!
Inter governmental agreements eg EU - European countries - gain economic strength. They can set tariffs which add taxes to goods and quotas which limit exports and imports.
Post 1992 UK was supplied 65% bananas by Caribbean ( Windward Islands ) via GEEST (contracted to undertake preferential trading from former european colonies - against WTO principles). WTO aim to create fair market for up to 135 countries. Before most EU countries traded with Latin American monoculture plantations controlled by 5 US owned TNCs, the biggest being Dole, Chiquita and Del Monte. 1993 single trade agreement introduced to make £ equal for banana importers to Europe - via tariffs and quotas. Latin Aamerican growers unhappy so pressured US gov't to discuss trade with WTO in 1996. Geneva Agreement on trade on bananas 2008 = tariffs from 176 euros per tonne to 114 euros per tonne - over 7 years. ' War' ended 2012. 20 000 Farmers in Windward Islands have gone out of business out of 25 000 farmers.
Aid other countries in bloc eg post 2008 recession - Portugal, Ireland, Greece, Italy and Spain hit hard helped by France and Germany - share euro = countries in less stable blocs or no bloc - cannot be helped.
Many African nations gained independence during 1950s/60s and took development loans, with low interest, to help rebuild weak economies.
1980s - global recession 5% to 15% massive increase in interest rates. 1980s cash crop prices dropped due to deflation as America and Europe - mechanised farming and new strains of more resistant crops. Therefore not making any money on exports so forced to borrow more money to pay off interest on original loans. 1990s- International leaders altered terms on loans to give longer repayment terms and loaned new money to repay off original debts- helped in short term but not in long term - Increased debt burden.
In 2008 total debt of all developing countries stood at $3.7 trillion.
In 2000 Mozambique’s debt was $8.3 billion - 70% of people were living below the poverty line (living on less than $1.25 a day)
2006 Mozambique had $1,306 billion cancelled by the World Bank at G8 summit
2007 debt repayments was 2% of government revenue and health spending increased by 6% - Population living below the poverty line in 2009 52% - GDP $1,200
Not always to stimulate development eg energency aid. Often from ex-colonial powers.
Can be monetary but can also be equipment, education programmes and expertise.
Humanitarian / Emergency aid - aims to alleviate suffering short term eg post earthquake.
Development / Structural aid - addresses poverty in the long term.
Project aid - tied to a large scale scheme eg construction of major dams.
Voluntary aid - from NGO's that raise money for use in small scale projects eg sponsor a village.
Bilateral aid - one-on-one relationship between donor and recipient.
Multilateral aid - involves donor countries giving to organisations who distribute the aid eg World Bank, Oxfam and UN agencies.
Official development aid - Organisation for economic cooperation and development ( OECD) - provide a level of development assistance (ODA) gov't to gov't or agencies or international institutions. 2006 developing countries = $104 billion ODA.
Millennium development goals
8 goals set up in 2000 by the UN at the millennium summit NY - AIM: to improve the development of the world globally with a target date for completion in 2015. 4/8 goals have been met. 189 countries signed up.
1/2 proportion of people with incomes less than $1.25 a day - global pov rate 2010 less than 1/2 of 1990 rate with 700 million fewer people living in conditions of extreme pov. leaves 1.2 billion in exteme poverty.
1/2 and begin to reverse spread of HIV's / AID's. Number of new HIV infections per 100 adults (15 to 49 yrs old) declined 44% between 2001 and 2012. 210 000 children died of aid related causes in 2012. 320 000 in 2005.
1 Eradicate extreme poverty and hunger, 2 Achieve universal primary education, 3 Promote gender equality and empower women, 4 Reduce child mortality, 5 Improve maternal health, 6 Combat HIV/AIDs, malaria and other diseases, 7 Ensure environmental sustainabilityand 8 Global partnership for development: BASICALLY focuses on what rich countries can do and should do.
Foreign direct investment (FDI)
More developed countries go into developing countries to use their resources. TNC’s
Akosombo Dam - Built between 1961 and 1965 and funded jointly by The World Bank, US, UK and Ghanaian government as part of the Volta River Project. It formed Lake Volta which is the largest man-made lake in the world. Total cost of the project was $258 million.
The dam gives 50% electricity produced to go to Tema (port) to be used in a US owned aluminium smelter. 20% of the cost of producing aluminium is electricity. Northern regions of Ghana are rich in Bauxite which is used for the production of aluminium however the US Company Volta (TNC) imported Bauxite from Jamaica.
2500 jobs created in aluminium smelter with subsidised housing, free healthcare and transport to and from work. The aluminium smelter cost £56 million to build so each job cost $22,400 to create one job HUGE investment. NEGATIVE - 80 000 people forced to relocate losing their primary industries of fishing and agriculture. Example of Neo- colonialism
WTO stemmed from 1986-94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT) committed to increase free trade.
Free trade = trade between countries is not restricted in any way by tariffs, quotas or other barriers.
BEXIMCO - largest private sector group in Bangladesh founded in 1970. Industry sector in Bangladesh = 75% of GDP. Deal with a wide range of industries eg Textiles, trading and real estate development. They employ +48 000 worldwide. Revenue of $834 million a yr. They also aid the community through projects that they sponsor -
“Proyash”, a specialized institute that works for the holistic development of children with special educational needs
“Gono Sahajjo Songstha”, an institution that provides education for the underprivileged.
Fair trade- social movement to improve conditions for producers.
Ghana’s cocoa best quality in world with annual production = 707 000 tonnes in 2006-2012. World’s 2nd largest producer. Employs 3.2 million with the majority being produced by 865 000 small holders. Kuapa Kokoo (meaning ‘Good cocoa farmers’ company) est. 1993 by a group of Ghanaian farmers and support from TWIN trading UK. It is the largest cocoa cooperative in Africa with 87 907 members with 32% being women. 43-60% members are illiterate and 27% no education. It is the main source of fair trade chocolate supplying Cadbury. 1947 Cocoa Marketing Board and Cocoa Making Company was set up who advised gov’t on pricing for cocoa, however often farmers don’t get correct amount for yield. 1998 KK, Twin Trading, Christian Aid, Body shop and Comic relief founded Day Chocolate Co’ (now Divine chocolate) sold in 10 countries. pump wells + drilled 348 bore holes, constructed/refurbished 8 schools and got two cinema vans to show educational programmes. In 2010 it was revealed that 7/33 farming communities were using the worst forms of child labour in Ghana. However when this was discovered these farms were suspended until the situation was corrected. Proves fair trade works as it is traceable. Doesn’t provide fair trade opportunities for all farmers.
Indicators of development
Old world view = 1st world rich west capitalists, 2nd world communist east and 3rd world poor rest.
Brandt's world view = north rich bar Australia south poor
The development pathway/ development cable
Single indicator: one element of development eg GDP = does not show wealth distribution
GDP Saudi Arabia: $31,100 UK:
Composite indicator: multiple factors taken from different areas of the development cable said to be eurocentric / how scandinavian you are eg Human Development Index (HDI)- Literacy rate, Life expectency, GDP. ranked 0-1 1 being the best SA: 0.836 UK: 0.85
Happy Planet Index (HPI)- Life expectancy, experienced well being and Ecological footprint SA: 46.9 UK
Qualitative- allows opinion: HPI(experienced well-being) & Quantitative: figures only- fact.
Tourism is the worlds fastest growing industry
In Botswana(poverty rate 30.3%) income from tourism has increased by 26% and the number of tourists has increased by 18%. High costs result in small numbers of tourists who don't cause land degradation and over-saturation in sensitive areas. Since 2001 Botswana’s national ecotourism strategy has been designed to spread benefits of tourism sustainably particularly for women and young people. The wildlife in Chobe National Park and the Okavango Delta have attracted large numbers of people. The government have set up licensing and visitor permits to control numbers. The license fee money is shared between the local community and government. It also employs local people to manage visitors.Conflicts have arisen between farmers and tourists because of differing perceptions on the wildlife. The Botswana Ecotourism Certification System has been set up and is a nation wide programme run by Botswana Tourism. It is designed to encourage and support responsible environmental, social and cultural behaviour by tourism businesses. It is also designed to provide a quality, eco-friendly product to consumers. It is a 3 tier system with tourism companies of all sizes able to achieve one of 3 certification--green, -green+ and -eco which is the highest level of certification which acknowledges nature conservation, environmental management and community involvement.
The policy or practice of a wealthy or powerful nation in extending its influence into a less
developed one, especially in exploiting that nation's resources.
Through tied aid which means they will be helped, however there is some catch to the aid. Neo-colonialism can often lead to money leaving the developing country to the more developed donor country due to projects that have been set up controlled by the donor country. China is an example of an donor country to Africa as in 2007 Chinese’s investment amounted to $30 billion mainly in infrastructure projects. However much of this investment has mainly benefited the Chinese as the African workers are poorly paid and there is little health and safety put into place. India also provides investment into Africa, however many land grabs have been occurring with Indian companies taking much of the African agricultural land. In Boko, Ethiopia the land comes with no rent for 6 years and then after this time it is only 135 burr per year per hectare which is only £6.50. This would be a large sum for most Africans but for these more developed countries it is little for such good soil. Many African countries don’t have minimum wages so the investors can pay very little to employees therefore gaining cheap labour so these workers cannot afford education for their children and often not enough food for their families.
De Beers Diamond co = 4 main mines in Botswana – world’s richest reserve of diamonds. Land locked doesn’t affect export as flown out of country. De Beers = health care and anti-AID/HIV programmes.
Bots = free education and healthcare as a result of profits from diamond exports
8/9% growth of GDP per year
Political stability – same gov’t 10 years
Least corrupt nation in Africa – scorced 63/100 (100 being most uncorrupted) and ranked 31/175
1966 independent from UK
1972 Debswana formed = 50/50 partnership between De Beers and gov’t to dev largest private sector employer in Bots +4000 staff. Supplies 50% of gov’t rev +70% exports and 30% GDP = 1971 production began. 2006 Diamond Trading Co (DTC) set up to sort and value rough diamond production by Debswana + local production.
HIV/ AID’s = 65 000 orphans in Botswana
logging - Solomon Islands
NE of Australia Isabel 2nd largest island around 1000 island - Ex UK colony - inde 1978 pop = 400 000 SIS= small island state GNI low = $600 per person
85% rural subsistance farming + fishermen - 2.2million hectares of forest = 80% land
logging provides 50% of foreign income but in 2004 50% of the forest had been destroyed as logging is occuring 3x sustainable rate. If count at rate forest will be gone by 2020
logging rights are sold to big companies who then strip the land = soil unusable again eg Isabel Timber Company LTD - Malaysian co (TNC) - less than 2% of value of wood reaches owners. - promise land owners benefits, destroy land by using large machinery
Isabel Sustainable Forestry Managemnet programme - do not use large machinery to reach trees. 2 trees per hecter per 10 yrs. they gain 50% of value per tree = $1000 per m2 of tree. replant trees and they are milled on site by hand then wood transported by boat.
China= prolonged spending on health and education over 50 years, large population-workforce, 2001 jointed WTO, large supply of natural resources, 53% of China’s exports produced for foreign owned companies, world trade increased by 60% since 2001.
Malaysia= $80 billion investment by USA and Japan, economy increased by 7% 1970-2000 through manufacturing microchips. In response to competition of manufacturing from China started new initiatives including plastic surgery, University campuses (Nottingham= Kuala Lumpar), designing and testing micro-chips (quaternary industry rather than secondary industry)
South Korea= Exports more capital goods to China relative to economy size, Samsung electronics (more smartphones than Apple), Hard workers 1680 hours a year, 5% of GDP spent on universities, top of education tables according to OECD, in 2010 economy grew by 6%.
India= Outsourcing of electronics and telecommunications earning India US$25 billion a year, economy grown by 6% since 1990s.
Bangladesh factory collapse 2013 -Rana Plaza factory Dhaka, more than 1,130 workers killed. +2,500 people were rescued from the building alive, some terribly injured. 9 of 29 firms implicated in the Rana Plaza disaster went to Geneva to discuss compensating the victims. Next, Primark, Mango, M&S, Carrefour, Abercrombie and Fitch, H&M, C&A, ZARA, TESCO. Brands including H&M have agreed to contribute up to $500,000 a year towards rigorous independent factory inspections and the installation of fire safety measures.
Bhopal Disaster - December 2, 1984 a pesticide plant in Bhopal, India leaked lethal gas and other chemicals = toxic cloud over the region killing more than 8,000 people in just the first few days affecting more than half a million people.Since 1984, 20,000 died. More than 40 tons of methyl isocyante gas released .People woke coughing, their lungs filling with fluid. More than 8,000 killed in just the first few days following the leak, mainly from cardiac and respiratory arrest.The chemical factory belonged to Union Carbide, which negotiated a settlement with the Indian Government in 1989 for $470 million - a total of only $370 to $533 per victim -too little for medical bills. In 1987, a Bhopal District Court charged Union Carbide officials, with culpable homicide, grievous assault and other serious offences. In 1992, a warrant was issued for the CEO'S arrest.More than 20,000 people still live in the vicinity of the factory and are exposed to toxic chemicals through groundwater and soil contamination. New generation continues to get sick, from cancer and birth defects and other everyday illnesses.
Jubilee debt campaign
Jubilee 2000 was an international movement of over 65 countries calling for a debt free start to the millennium for a billion of the worlds poorest people. It included institutions such as the world bank.
After 2000 debt still needed to be cancelled and the Jubilee debt campaign was set up. It is supported by Bob Geldof and Noel Gallagher. It held the record for the most people to sign a petition - more than 21 million people
They have succeeded in clearing $100 billion of debt (according to world bank) owed by more than 35 countries
In 1998 a human chain of more than 60 000 people encircled the G8 summit in Birmingham protesting against debt
what is development and the development gap
Development is defined as being the increase in the standard of living and quality of life for an increasing proportion of the population.
The development gap is the widening difference in levels of development between countries who are developed or developing (enjoy a reasonable standard of living and those who are not). The development gap can be shown on the development pathway, which shows a way of classifying countries by how developed they are.
LDC's, LLDC's , Development gap FFC's, RIC's, OPEC's, NIC's, MEDC's ,MDC's
physical environment - Africa
Droughts and desertification. Desertification is defined as being the process by which fertile land becomes desert, typically as a result of drought, deforestation, or inappropriate agriculture. In 2004 subsistence farmers in Mali and Niger were hit by a severe drought and a plague of locusts which destroyed crops. 2005 - this crisis had attracted the attention of the world’s media due to 3.3 million people being under a serious food shortage with UNICEF having issues providing aid for this vast number of people. Many of Africa’s countries are landlocked so therefore for them to export and import goods they have to transport them through other countries + tax.
1990’s fastest growing population in the world at 3.5% per year. 2001 Sub Saharan countries supplied 43% of cut flowers into the EU with a value of over €250 million. In the same year 23 of these African countries experienced a food emergency due to drought which resulted in over 60% of the populations experiencing a 20% decline in food per head. Also during this period there was a water shortage as Kenyan farmers diverted water supplies to produce 52 tonnes of flowers for the EU.
social factors - Africa
Poor higher education system with none of its Universities reaching the world’s top 100; there are 4.5 million students in sub Saharan Africa. higher education - only 0.6% women enrolling in Chad. ‘Brain drain’ may occur as the better educated population may choose to move to a country that will offer them a better education and a chance of employment, but as many of the population of Africa could not afford this the wealthier will emigrate leaving behind the most dependant and poor. By 2003 35.8% of all adults had HIV which is a transferable disease so this will be passed onto their children and this will continue to occur until they are provided with the correct medication and the education alongside of this. Small proportion of the population survive into their 40’s and 50’s due to these diseases, for example in Botswana the AIDs epidemic has reduced life expectancy from 67 years to 55. Due to early deaths this leaves children to look after siblings so therefore they cannot attend education which continues the poverty cycle. An exception to the majority of Africa is South Africa with a GDP per capita $6,617,91. South Africa contains many natural resources such as diamonds, gold and platinum as well as being the biggest energy producer in Africa, surrounded by coast on three sides. In 2012 it was named the 25th richest country in the world so it is well developed in it resources and economy. South Africa has a good literacy rate at 93%, a good education system and access to Universities, however nearly a third of its population still live in poverty ( 31.3% below the poverty line in 2013).
Colonialism - Africa
1914 Africa split up into countries, before would have been tribes
Colonialism - C16th - C19th. product of Colonialism was the slave trade = fittest and healthest pop being removed leaving most dependent population. - slave triangle - cotton, coffee, tobacco etc
In 1787, the Committee for the Abolition of the Slave Trade was formed. In 1807, after a huge campaign= Parliament abolished the slave trade.
It has been estimated that, overall, about 12 million Africans were captured to be taken to the Americas as slaves. The level of slave exports grew from about 36,000 a year during the early 18th century to almost 80,000 a year during the 1780s.
Post independence led to power struggle = conflict and civil war. eg Chad 33yr civil war
Political factors - Africa
Many African countries have been classified as failed states by Fund for Peace (US org) – all or large parts of territory no longer controlled by government. Characterised by corruption (which deters investment and aid), non-unified government, ineffective legal system, abject poverty, violence, conflict and civil war. e.g. failed state = Somalia (Horn of Africa) population 10.5 million – 20% needing urgent humanitarian aid. Conflict since 1960 Independence from UK but has attempted to rid itself of Islamic fundamentalists and Al-Qaeda. Fighting between rival war lords = ill-equipped to deal with disasters e.g. drought = ½ million dying 1992 – 2010/12.
Lobbying groups eg KENDREN (kenyan debt relief network) - 'debt is poverty, debt is slavery and cancelation is justice'. HIPC's (heavly indebted countries) 1996 42 countries mostly Sub saharan African countries eligible for debt relief. 1962 SSAN countries owed $3 billion 1982 $235 billion owed. SSA countries 25 of 32 countries classified as seriously in debt. Nigeria = $35 billion. Many borrowed during the 1970 - 1980's as they were encouraged by western leaders. HIPC set by International monetary fund, World bank and endorsed by 180 governments. They had two main objectives, to relieve certain low-income countries of their unsustainable debt to donors, and to promote reform and sound policies for growth, human development and poverty reduction. Debt relief occurs in two stages, the first being the decision point which is when the country gets debt service relief after having demonstrated adherence to an IMF programme and progress in developing a national poverty strategy. The second being the completion stage when the country gets stock relief on approval by the world bank and the IMF of its poverty reduction strategy, The country is entitled to at least 90% debt relief from bilateral or multilateral creditors to make the debt level sustainable. There have been 16 HIPCs that have reached the decision point and 8 who have reached the completion point including Mali, Burkina Faso and Mozambique.
Aid case study
2005 Niger and Mali received £3million from UK through the World food programme's emergency operation to relieve crises - famine. 12 million needed food aid. 150 000 children predicted to die if unaided. each £1 million provided could feed 200 000 for a month. Niger pop = 13.85 million. UK gave another £2 million 2006 to cont to aid with diets of pop and to fund long term dev projects. 2006 - 2009 UK spent £500 000 each year on Niger, Mali and Burkina Faso helping with diets and nutrition. UK worked with French to improve girls education - Bilateral, multilateral, emergency and development aid.
Oxfam (NGO) worked in Niger and Mali with local NGO's eg The association for the indigenous development of the Sahel to support primary schools. Border area between western Niger and northern Mali - nomadic communities who herd cattle and goats who are unlikly to send their children to school especially girls. The project supports 48 primary schools and 4,053 pupils enrolled in 2004 with 1,818 being girls. Many local woman are also involved - more equality. The book to pupil ratio has increased from 1 book to 5 pupils to 2 books to 3 pupils.
1974 Schumacher commented, ‘aid was a process by which you collect money from the poor people in rich countries and give it to rich people in poor countries’.
Criticisms of the MDG
In 2015 1 billion people will be living on $1.25 or less a day
Difficult to identify progress on MDG8
MDG 3 not really targeted, it is more to monitor
MDG do not place enough emphasis on the need for sustainable development
Leave out more important issues such as security and peace
Some countries have not been included in the figures
After 2015 Ban Ki-Moon wants better recording and measuring of development progress
Africa is the world’s second largest and populated (1.111 billion) continent situated to the south of Europe and to the south-west of Asia containing 57 countries which amount to 6% of the earth surface.
International Monetary Fund figures suggest that Africa will have 7 of the 10 fastest growing economies in the wold over the next decade. This is not only due to the growth in producing of natural resources but also in growth in services, a growing class of consumers and improvement of economic services. Africa has also established economic connections to more developed countries such as China allowing them a reliable source of income. Also as other world powers become increasingly more aware of the situation in Africa education programs and training programs are being put into place. Trading programs which allow people to learn vital skills in areas of work such as agriculture and tools are being provided to make their work more self-sufficient so that they can become more economically stable.
Economic factors - Africa
1950/60’s Africa was experiencing economic progress due to western technology which allowed growth in agriculture which progressed into a greater amount of exports. Due to American grain surpluses it became cheaper to import grain than to grow it in developing countries = collapse of the local markets. As an alternative to growing grain the governments encouraged the growth of cash crops for export such as coffee and cotton in turn allowing the government to tax farmers to aid development projects. 1970’s world oil prices increased, resulting in imports + expensive due to transport and energy costs. Exports had to increase production of cash crops, had to grow to sustain development projects. 1980’s interest rates doubling causing a global recession = less demand for African products which were sold at cheaper prices. Farmers had to further increase production to create the same income as post-recession, leaving Africa in further debt. Led to soils becoming overworked - followed by a series of droughts causing further issues in agriculture and farming. 1990 and 2000’s + world’s awareness of the issues in the African economy with the UN setting its Millennium Development Goals The 2005 G8 Gleneagles Agreement cancelled $40 billion of debt owed by 18 of Africa’s poorest countries. In return they had to liberalise their economies and privatise key industries, however these countries still owe $523 billion. Egypt relies on the oil industry, tourism and cotton. However the Egyptian Revolution of 2011 against Egyptian President Hosni Mubarak had a marked effect on tourism which in 2014 decreased by 42%.