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Third World Politics

Third World Politics. Chen-shen Yen Spring 2010 National Tsing Hua University. Economic Growth and Development. The Growth of an Economically Distinct Third World Regional Analysis Problems of Development Developmental Perceptions Indebtedness and Structural Adjustment Programmes (SAPs).

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Third World Politics

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  1. Third World Politics Chen-shen Yen Spring 2010 National Tsing Hua University

  2. Economic Growth and Development • The Growth of an Economically Distinct Third World • Regional Analysis • Problems of Development • Developmental Perceptions • Indebtedness and Structural Adjustment Programmes (SAPs)

  3. Economically Distinct Third World • core-periphery • late development • international economic order • a. IMF • b. World Bank (IBRD) • c. GATT/WTO • NIEO

  4. Regional Analysis • Middle East and North Africa • Sub-Saharan Africa • Latin America and the Caribbean • South Asia • East and Southeast Asia

  5. Problems of Development • Western industrial capitalism • Traditional society becomes more • modernized • a. industrialized • b. urbanized • c. educated

  6. Problems of Development Economic growth Redistribution of the growth Quantitative or qualitative GDP or HDI Life expectancy Educational attainment Purchasing power parity Sustainability

  7. Third World Debt Crisis Debt trap Indebted industrialization Debt service Conditionality Balance of payment Foreign reserve Term of trade

  8. Third World Debt Crisis Why Increase in Debt? 1. Petrodollar and lending 2. U.S. push for export 3. Third World elite’s effort of converting assets to liquidity 4. Higher inflation rate

  9. Third World Debt Crisis Western Response 1. Renegotiation of debt 2. Rescheduling of debt 3. Unilateral moratorium of repayments 4. Fixed proportion of export earnings to service debt 5. Structural Adjustment Programmes (SAPs)

  10. Third World Debt Crisis Structural Adjustment Programmes (SAPs) 1. Trade barriers are to be drastically lowered, exposing local producers to foreign competition; 2. Subsidies and price controls are to be reduced or withdrawn completely, to remove distortions in local prices for goods and services;

  11. Third World Debt Crisis Structural Adjustment Programmes (SAPs) 3. Financial systems are to be restructured by withdrawing controls on capital movements; 4. State-owned enterprises should be privatized and private foreign investment encouraged, by removing controls.

  12. Third World Debt Crisis Structural Adjustment Programmes (SAPs) 5. State intervention in both the management of the economy generally as well as in the provision of social services is to be minimized.

  13. Third World Debt Crisis Why Africa’s debt crisis continues? 1. Mistakes by creditors and debtors. Creditors – forgiving debts Debtors – common stance 2. Prescription of increasing exports to accumulate the foreign exchange to service debts and pay off principal did not work.

  14. Third World Debt Crisis Why Africa’s debt crisis continues? 3. Non-solution of Africa’s debt crisis is good for the industrialized economies, i.e., low price for raw materials.

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