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Hands that help or hurt? . Should the Developed World Help the Less-Developed World? . World Poorest 60 countries: 1970 - $25 billion 2002 - $523 billion Africa spends $14 on debt and $5 on health care per capita 5 countries more than 20% of government income on debt

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hands that help or hurt

Hands that help or hurt?

Should the Developed World Help the Less-Developed World?

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World Poorest 60 countries:

  • 1970 - $25 billion
  • 2002 - $523 billion
  • Africa spends $14 on debt and $5 on health care per capita
  • 5 countries more than 20% of government income on debt
  • $1.30 for every $1 borrowed
  • Also South America - Argentina has $132 debt
  • Debt in Europe has led to massive austerity measures and public funding cuts.
structural adjustment programs
Structural Adjustment Programs
  • The SAPs are one way that developed countries give aid to the developing world.
  • SAPs offer loans/money to poor countries that are often in debt (owe money).
  • In return for help, the countries agree to restructure/change the way their economies work.
  • Countries are asked to open their borders to investment, increase exports, and privatize more of their economies.
saps helping or hurting
SAPs—Helping or Hurting?
  • SAPs can help a poor country’s economy become more efficient and productive. SAPs get rid of “bloated bureaucracies” and “cronyism” and offer a way out of poverty and indebtedness.
  • OR...
  • SAPs put more poor people out of work who rely on government help. This is about opening the country to rich companies and people who believe in laissez-faire economics.
tied aid
Tied Aid
  • Similar to SAPs, Tied Aid is help given by a developed country to a less-developed country, and with the requirement that the country being helped will buy goods and services from the country helping.
  • As with SAPs, Tied Aid is also controversial.
  • Is it wrong to be in a win-win situation?
  • Is it more helpful to the developed country?
  • Will as much aid be given if it has no benefit to the developed world?
useful terms to know
Useful Terms to Know
  • Multilateral Aid is help given by many (multiple) countries.
  • Bilateral aid is help given by one country.
  • CIDA – Canadian Development Agency- is a governmental organization (middle power idea from Trudeau Era.)
  • NGOs – non-governmental organization, such as Oxfam.
  • HIPCs – Highly Indebted Poor Countries-suffer such a high level of debt that they can’t seem to “get out of the hole”.
  • 2005 – debt cancelled for 16 most HIPCs
controversies
Controversies
  • Should debt be forgiven and HIPCs given a
  • chance, or does it reward bad behaviour by the developing world and discourage future investment by the developed?
  • Is aid given by developed countries just another form of colonialism?
  • Should an improvement of human rights by developing countries be required by donor countries?
  • Will NGOs treat the developing world more fairly than governmental agencies? Are NGOs rich enough to help?