Post on 08-Feb-2016
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Aid
Relevant Questions
• Evaluate the view that Transnational Corporations (TNCs) have had a significant part to play in the existence of global inequality. (30)
• Evaluate the view that aid cannot solve the problems of the developing world. (30)
What do we mean by aid?
• Economic, military and technical assistance both given and loaned to a country
• It might also include simply writing off previous debt
• It can be tied (for a specific purpose) or free (used at the discretion of the country receiving)
Who gives aid?
• One state to another (bilateral aid)
• IGOs (Many states working through a central organisation – Multilateral aid)
• TNCs (Corporate Responsibility)
NGO – Non-Government Organisations
• Make a list of as many charities as possible which work to make a difference in the UK
• Make a list of as many charities as possible which aim to make a difference across the world
• Do any of these charities do both?
The up side of NGOs• It does not expect repayment• Not for profit– Take risks– Small scale projects– Work in areas normally ignored
• Often more effective than governments who have hidden objectives
• Responsive to donors• Their objectives are continuous
Problems with Charities (NGOs)• Limited funds – which
often leads to reliance on funding from governments or partners
• Spending on publicity and administration
• Use of inappropriate equipment/people
Aid – good or bad?
• Modernisation – development loans can kick-start economies
• The North has much that the South could use to develop
• Collier (2007) – Aid has improved recipient countries GDP by 1% a year – not much but it does help
Aid – good or bad?• Neo-Liberal – aid creates dependency (although it may
allow some)• If a country is reliant on aid it will not take on capitalist
values• Aid can create laziness, corruption and inefficiency• If capitalist values are fully taken on then a country
shouldn’t need aid it should be able to attract companies with the promise of profit
• Bauer (1995) – aid implies something good. Northern countries never received aid and managed to develop through capitalist values. In reality aid goes to governments and not the people
Aid – good or bad?
• Dependency and world systems – aid is often conditional and goes to countries with strategic value for the benefit of the donor
• Hayter (1971) – Aid as Imperialism – creates jobs and export markets for the donors – support from the recipient
• 50 years of aid for what? (but is that because we never give enough?)
• Participation – Participatory Poverty Assessment
Aid – the middle• It can be good when it does not:– Support the corrupt– Get wasted on inefficiency– Get spent on the military– Damage the environment– Employ foreign persons– Get into the wrong hands– Has long term debt burdens
• Sachs (2005) – ‘big push’ – If we gave more a real difference could be made
• Easterley (2006) – bigger focus on small local initiatives
Aid and the legacy of debt• 1970s loans came with
interest rates• Belief in the ability to pay off
the debt through modernisation
• Recession in the 80s reduced markets and amount of aid available
• Cuts in developing countries – mainly education and healthcare
Debt Boomerang – George (1991)• Debt comes back to bite the North (it would be better write it
off)– Environmental - exploitation in an unsustainable way to repay debt– Migrants flee to the north to escape poverty– Drugs - grown to repay debt– Under employment - Less money less markets for developed goods– War – to repay debt or because of social unrest– Tax – Developed countries have to pay tax to support banks write
off bad debts• Jubilee Debt Campaign – Cancel the debts of the worlds
poorest nations
Jubilee Debt Campaign
• Cancel the debts of the worlds poorest nations
• It has happened slowly but still involved structural adjustment programmes
Moral Hazard
• Writing off debts rewards countries which used the money poorly
• But this was 20-30 years ago…
• Vulture funds
• http://www.channel4.com/programmes/dispatches/4od