Tag: economic development

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A little money goes a long way – microfinance

The article below from the BBC website looks at the issue of microfinance – the provision of very small loans as a form of development assistance to help people in developing countries to support themselves and develop their businesses.

Small loans to women make big changes BBC News Online (21/8/07)

Questions

1. Explain what is meant by microfinancing.
2. Examine the reasons why microfinancing is considered more effective at promoting economic development (as opposed to economic growth).
3. Assess the extent to which microfinancing could help in other developing countries to promote economic development.
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Will the global rush to bio-fuel cause poverty?

In its first report on the impact of bio-fuels, the United Nations (UN) has warned that such fuels may increase poverty in developing countries and have a wider environmental impact than has in the past been suggested. With oil prices at a record high and with climate change pressures, much of the developed world has adopted targets for bio-fuels, but environmentalists have warned that the rush to grow the raw materials for bio-fuels may be more damaging to the environment than the fossil fuels they will replace.

Global rush to energy crops threatens to bring food shortages and increase poverty, says UN Guardian (9/5/07)
UN warns on impacts of biofuels BBC News Online (9/5/07)
UN raises doubts on biofuels Guardian (9/5/07)


Questions
1. What are the external costs and external benefits resulting from the use of bio-fuels as opposed to fossil fuels?
2. Using diagrams as appropriate, show the impact of increased use of bio-fuels on the social equilibrium in the market for fuel.
3. Assess policies that European governments could put in place to ensure that the move towards increased use of bio-fuels has a positive environmental impact.
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The World Bank has the perfect standard bearer

The World Bank and the IMF are no strangers to criticism. Both organisations have pursued controversial policies in their attempts to improve the lot of people in developing countries. Recent events at the World Bank have heightened criticism of the organisation and in the first article below Naomi Klein (author of No Logo – nologo.org) argues that the behaviour of Paul Wolfowitz is symptomatic of a wider hypocrisy in the behaviour of the World Bank around the world. In the second article George Monbiot writes a criticism of the behaviour of the IMF and its approach.

Questions

1. Use the web sites of the IMF and the World Bank to write a summary of their roles.
2. Assess the validity of the arguments of (a) George Monbiot with respect to the IMF and (b) Naomi Klein with respect to the World Bank.
3. Discuss possible changes in World Bank policies that would help address Naomi Klein’s criticisms.
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Oxfam slams bilateral trade deals

Many new regional trade agreements (RTAs) and bilateral trade agreements have been signed in recent years. In a report – Signing away the future – Oxfam has argued that these trade agreements may often significantly disadvantage the poorer developing countries. The links below give access to the briefing paper and some FAQs about these agreements.

Oxfam slams bilateral trade deals BBC News Online(20/3/07)
The state of world trade – Oxfam Oxfam website
Signing away the future – Oxfam Briefing Paper Oxfam website
Signing away the future – Q&A Oxfam website

Questions

1. Explain the difference between a regional trade agreement and a bilateral trade agreement.
2. Discuss the advantages and disadvantages for developing countries of signing (a) bilateral trade agreements and (b) regional trade agreements.
3. Choose a specific recent regional trade agreement and assess the impact it has had on the member countries.
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The west fails to deliver on aid

The United Nations has set a target for developed countries to donate 0.7% of their GDP to poor nations. However, the average figure is just 0.33% for the developed world and according to a recent OECD report many nations are set to miss this target if they fail to boost aid spending significantly. Indeed, only a few countries – Denmark, Norway, Sweden, Luxembourg and the Netherlands – are currently meeting this target.

West set to fail aid targets, OECD says Guardian(22/2/07)

Questions

1. Explain what is meant by ‘official development assistance’.
2. Discuss the likely impact on the developing world of a failure to meet the aid targets set by the United Nations.
3. Assess the extent to which developing countries are likely to gain from globalisation.