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Hands that help or hurt?

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?

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  1. Hands that help or hurt? Should the Developed World Help the Less-Developed World?

  2. 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.

  3. 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.

  4. 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.

  5. 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?

  6. 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

  7. 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?

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