Poverty and Development

some basic stuff :)

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  • Created by: Jamie
  • Created on: 19-05-10 19:31

The North South Divide.

  • The Global North/South divide is a socio-economic and political division between the wealthy, developed countries and the poorer developing countries.
  • the 'North' contains 4/5 permanent UNSC members, and all of the G8.

(http://image.absoluteastronomy.com/images/encyclopediaimages/n/no/north_south_divide.svg.png)

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How poor is the South?

  • 1 billion people live in abject poverty, without access to basic nutrition or health care, and live on less than $1 a day.
  • 5 million children die per year due to malnutrition.
  • Every 6 seconds, a child dies due to malnutrition. In those same 6 seconds, the world spends more than £200,000 on military forces.
  • Despite recent statistics suggesting that billions of people are rising out of poverty, because of population growth the number of very poor people remains about the same.
  • UN millennium development goals aimed to halve the number of people living in abject poverty by 2015.
  • The percentage of those in abject poverty in the south has decreased from 31% to 20%.
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Measurements of Poverty.

  • Literacy Rates
    • 90% of all children go to primary school in the global south, although only 64% of African Children go to primary school.
  • Public Health
    • Access to safe water, sanitation and disease.
    • WHO (World Health Organisation) have reduced Measles, Malaria, Tetanus, and have nearly eliminated Polio.
    • HIV/AIDS has increased.
    • South has 75% of the global population, but only 30% of the world's trained medical staff.
    • Development has ensured that there has been an increase in access to water, but still 40% have no sanitation.
  • GDP per Capita
  • Life Expectancy, Child Mortality Rate etc.
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Models for Developing LEDCs.

  • Import Substitution
    • Some argue that LEDCs should save money for development, by growing/making goods it currently imports. It would do this through subsidy, increasing tariffs on imports.
    • However, this model goes against the theory of comparative advantage, and unless the tariffs are approved by the WTO, other states may retaliate.
  • Export Led Growth
    • Asian Tigers, India and China.
    • LEDCs use subsidies to encourage firms/farmers to export something it has a comparative advantage in.
    • Exports earn the LEDC foreign currency, which they can then use in development
    • However, raw materials fluctuate in price more than manufacture goods, and the 'resource curse' may take action, as a state may come dependent on one particular resource.
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Models for Developing LEDCs continued.

  • Foreign Direct Investment
    • e.g. Asian Tigers, attracted foreign MNCs, whilst successfully protecting their own industries simultaneously.
    • In 2007, $500 billion of private investment went from the North to the South. (not from the World Bank or the IMF)
    • However, sometimes a 'race to the bottom' occurs, when two or more states compete to attract MNCs to set up in their country, offering lower and lower terms to the company, such as tax free land and reduced workers rights etc. This also means that to a certain extent, the LEDC surrenders their Sovereignty.
  • Borrowing from the North. (e.g. Private Banks)
    • Many problems: may not be able to afford the interest rates. In 2007, the Global South owed more than $2 trillion in foreign debt and paid $300 billion a year interest. Africa's debt is equal to 30% of their total income.
  • Borrowing from the World Bank or the IMF
    • Have to accept certain conditions linked with both organisations.
  • Join International Organisations.
    • Required to obey certain rules.
    • WTO etc.
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Aid: general info.

  • Governmental aid: In 2008, the North gave $100 billion in aid.
    • 3/4 of this went straight to the LEDC government (state to state, bilateral)
    • 1/4 of aid goes through the UN or other equivalent organisation (multi-lateral)
    • Millennium goal by North was to donate 0.7% of their GDP. USA only donated about 0.2%.
  • Aid is an example of a 'collective good', in that it does not offer a direct benefit to the donor except from long term global prosperity.
  • Private aid- Bill and Melinda Gates Foundation etc.
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Types of Aid.

  • Grants, low interest loans, credits (LEDC has to use the aid to buy products from the donor) or loan 'technical experts'.
    • Some argue that military aid is a form of aid, because the LEDC can divert concentration to health and economic ares etc.
  • 2004 Millennium Challenge Account
    • only lent to uncorrupted, anti-terrorist LEDCs.
  • Disaster Relief.
    • Usually short term, providing essentials such as food and water.
    • 1980s/90s disaster relief was inadequate and uncoordinated, pressure in the form of Live Aid etc led to developments in this field. For example, the UN disaster fund.
    • Relief for 2004 Tsunami. $7 billion showed improved coordination.
    • Goes against the Realist global anarchy theory.
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Contrasting approaches to Aid.

  • Handout Model.
    • Old fashioned, rich state gives its products, shipped in their own ships, to the LEDC.
    • In theory, the donor would want the aid to be spent as locally as possible to the LEDC.
  • Oxfam Model.
    • Oxfam consults the local communities, then local people run the projects. (known as project partners, and not recipients of aid.)
    • Empowering, sustainable growth.
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Comments

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A useful set of revision cards, providing a concise overview of the global divide between north and south. Students might build upon this by researching case studies under headings such as exploitation and aid in order to address assessment objective 2, evaluation and analysis.

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