Obstacles to development
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Obstacles to Development. REASONS WHY THINGS DO NOT GET BETTER. GOVERNMENT. The decisions governments make particularly in terms of public spending The economic / political ideology The level of corruption The amount of bureaucracy and hindrance to private enterprise

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Obstacles to Development

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Obstacles to development

Obstacles to Development

REASONS WHY THINGS DO NOT GET BETTER


Government

GOVERNMENT

  • The decisions governments make particularly in terms of public spending

  • The economic / political ideology

  • The level of corruption

  • The amount of bureaucracy and hindrance to private enterprise

  • The accountability of government to its people

  • Security and the rule of law


Vicious cycle of political instability

Vicious cycle of political instability


Access to capital

Access to Capital

  • Without access to capital businesses cannot grow.

  • No property rights and no legal status for your business 

  • no access to credit no capital to invest in the growth of your business no possibility for growth and expansion low revenue low profit


Disease

Disease

  • Diseases such as Malaria and HIV/Aids reduce the productivity of a country.

  • Death rates among economically active population are increased, people are too sick to work or caring for the sick.

  • High levels of disease, infant mortality rates and fertility rates can be related to poor provision of health care


Natural hazards

Natural Hazards

  • Back to the idea of environmental determinism.

  • Natural hazards can be an obstacle to development.

  • Drought (Ethiopia mid 1980s), 2004 Indian Ocean Tsunami impact on Indonesia, regular flooding in Bangladesh, tropical storm damage in Caribbean.


Inaccessibility

Inaccessibility

Map shows number of days travel to nearest city.


Landlocked and poor

Landlocked and poor

Countries with coasts and deep sea ports are able to import and export products easily and therefore be more integrated into the Global Economy.


Obstacles to development

Top container ports


Unfair trade and protectionism

Unfair Trade and Protectionism

  • Subsidies paid to producers in MEDCs and trade barriers and protectionism limiting access to MEDC markets for LEDC producers are seen as major obstacles to development.

  • *Subsidies: A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction


Unfair trade and protectionism1

Unfair Trade and Protectionism

  • Levels of protectionism are high in the global economy and many analysts argue that the rules of the Global Economy were made by MEDCs for the benefit of MEDCs.


Trade benefits for all

Trade – Benefits for all?

  • In theory trade should benefit all countries.

  • International trade has been going on for a long time, so why are not all countries rich?


Dumping

Dumping

  • The rich world tells the poor world to get rid of subsidies, but continues to spend $1 billion a day subsidizing its own farming enterprises

  • http://www.maketradefair.com/en/index.phpfile=issues_dumping.htm&cat=2&subcat=3&select=1


Market access

Market Access

  • If Africa, East Asia, South Asia, and Latin America each increased their share of world exports by just one per cent, the resulting gains could lift 128 million people out of poverty

  • http://www.maketradefair.com/en/index.phpfile=issues_dumping.htm&cat=2&subcat=3&select=1


Forced liberalization

  Forced liberalization

  • Millions of poor farmers in developing countries cannot earn a living because of cheap, often dumped, food imports

  • http://www.maketradefair.com/en/index.phpfile=issues_dumping.htm&cat=2&subcat=3&select=1


Impact of aid and debt relief

IMPACT OF AID AND DEBT RELIEF


Obstacles to development

Aid received, per capita, in 2007, in $ of Official Development Assistance per person. Note that grey countries can either be non-recipients or ones for which data is unavailable. The data were converted into dollars using exchange rates, hence may not accurately reflect the purchasing power of the foreign aid receive


Obstacles to development

SSA

  • 1962 OWED 3 BILLION

  • 1982 OWED 142 BILLION

  • 2010 OWED 235 BILLION

  • NIGERIA 35 BILLION

  • COTE D’ IVOIRE 19 BILLION

  • SUDAN 18 BILLION


What are the different types of aid

What are the different types of AID?

What is AID?


Aid is

Aid is ...

  • Support

  • Goods

  • Services

  • Money

    ... given to those in need


Obstacles to development

What different types of Aid are there?

Duration: long-term, short-term, emergency

Delivery: financial, goods, services from trained people

Source: government, non-governmental organisations (NGO’s), charity, individuals

Dependency: tied aid


What is top down development

What is top- down development?

These tend to be big schemes and decisions are made by the national government. Local people who often live near the scheme do not get involved in the process

Examples:


Obstacles to development

National

Government

External Groups

e.g. World Bank, TNCs

Top Down Decision Making

Local People


What is bottom up development

What is bottom-up development?

  • Local people are fully involved in the process and decision making

    Examples:


Obstacles to development

Bottom Up Decision Making

External Groups

e.g. World Bank, TNCs

Decision made here

National

Government

Local People


Obstacles to development

Conditions often attached to the loans

Relies on external links and technology

Dams etc provide energy needed for the country to develop

Uses machinery etc rather than providing jobs for local people

Top Down Approach

Often environmentally effective as they use cheaper fuels e.g. HEP

Country gets into debt as it borrows money from the World Bank etc

As these areas grow the take away resources from peripheral areas


Obstacles to development

Involve the local people

Appropriate technology to the local skill level

Bottom up Approach

Low cost

Very limited impact of national poverty levels


Which are the best option

Which are the best option?

Looking at both Top down and bottom up approaches to development, which do you feel are the best option and why?


Effective aid projects or not

Effective aid projects or not?

  • Government funding to Nepal –the UK Government recently gave £65 million to the Government of Nepal to use in its health services

  • Oxfam’s Let Agogo Project in Haiti –gives cows to people who care for the cows and sell on the dairy products to earn income

  • International Aid to Afghanistan –much of the international aid to Afghanistan is paid to foreign contractors for projects that do not meet the needs of the poor


Different types of aid con t

Different Types of Aid (con’t)

* Emergency aid: following a disaster


Remittances

Remittances

  • Global remittances are about $300 billion per year.

  • 30 million Africans send appox. $40 billion annually from the countries of work to their home countries.

  • Up to 40 % of remittances to Africa are destined for rural areas

  • Problem: most money transfer centers are in urban areas.


Remittances1

Remittances


Poor countries debt

Poor Countries Debt

  • Reasons for problems

    • low growth in industrialized economies

    • high interest rates between 1975 and 1985

    • increase in oil prices

    • falling commodity* prices

      *any unprocessed or partially processed good, as grain, fruits, and vegetables, or precious metals.


What has been done

What has been done?

  • Structural Adjustment Programmes(SAPs)

    economic policies for developing countries that have been promoted by the World Bank and International Monetary Fund (IMF) since the early 1980s


Structural adjustment programmes saps

Structural Adjustment Programmes (SAPs)

  • SAPs believe the key is with international trade.

  • They consist of 4 main goals

    • greater use of a country’s resource base

    • Policy reforms to increase economic efficiency

    • Generation of foreign income through diversification of the economy and increased trade.

    • Reducing the active role of the state


Not everyone agrees

Not everyone agrees

  • http://www.globalissues.org/article/3/structural-adjustment-a-major-cause-of-poverty


Stabilization measures

Stabilization Measures

  • Short term

    • Limit any further deterioration of the economy (wage freezes, reduce subsides on food)

      Longer term

    • boost economic competiveness (tax reduction, export promotion, downsizing civil services, privatization and economic liberalization)


Heavily indebted poor counties initiative hipc

Heavily Indebted Poor Counties Initiative (HIPC)

  • The original focus of the HIPC Initiative was on removing the debt overhang and providing a permanent exit from rescheduling.

  • Also to promote reform and sound policies for growth and human development.

  • Launched in 1996 by the IMF and the World Bank.


Heavily indebted poor counties initiative hipc1

Heavily Indebted Poor Counties Initiative (HIPC)

  • 41 of the poorest and most heavily indebted countries, of which 33 are located in sub-Saharan Africa, are currently eligible to benefit from debt reduction under the enhanced HIPC Initiative.


Heavily indebted poor counties initiative hipc2

Heavily Indebted Poor Counties Initiative (HIPC)

  • There are two main stages to the HIPC Initiative.

  • During the first stage the countries must adopt a number of measures in order to be considered for interim debt service relief (decision point).

  • Once accepted, they qualify for some interim debt relief and must implement certain policies and meet certain conditions in order to qualify for full assistance (completion point).

  • The process is very flexible, as there is no fixed timetable for the completion of the two stages.


Sustainable development

Sustainable development

  • Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.


Obstacles to development

  • “…without compromising the ability of future generations to meet their own needs.”

  • This is the concept of intergenerational equity.

  • It is important to remember that future generation’s needs will be greater than ours because of population growth and development.

  • It means that we inherit the Earth from previous generations and have an obligation to pass it on in a reasonable state to future generations.

  • Our generation should not use more than our fair share of resources


Obstacles to development

  • Environmental Quality can be measured using a range of indicators which basically quantify our impact on the environment.

  • Habitat loss, species extinction, biodiversity, air pollution, land degradation, water pollution, resource use, waste disposal, energy use and efficiencies, transportation, housing, recycling.


So how much does the us spend

SO HOW MUCH DOES THE US SPEND


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