Structural Adjustment Programs Have Led To The Increase

Over 75 years later, we still do not have the freedoms President Roosevelt wished upon us. A specific freedom that still does not exist is “economic understandings which will secure to every nation a healthy peacetime life for its inhabitants.” There are still dozens of poverty stricken countries, known as Heavily Indebted Poor Countries (HIPC). These are countries that have a national debt that is unmanageable with traditional manners alone. The good news is that the Heavily Indebted Poor Countries Initiative began in 1996 to address this issue. The World Bank, the International Monetary Fund (IMC), and other creditors teamed up to reduce the debt of 36 countries that met strict criteria.

In the documentary Life and Debt, it is explained through the stories of local people, the economic and social crisis of Jamaica. With Jamaica receiving mandatory loans from the International Monetary Fund (IMF) in 1977 because of lack of alternatives, Jamaica was promised meaningful development. Unfortunately, this only made the situation worse because of the extreme policies and foreign economic agendas that came with the loans, forcing Jamaica into even further debt. Therefore, it is my opinion that it is because of the policies and greed of the IMF and The World Bank that came along with the loans, that Jamaica is currently 4.5 billion dollars in debt.

However, some believe, that a shift in the way we produce food may have some unintended consequences. They contend that poverty in nations such as Africa and Asia, is caused by the low productivity of the unindustrialized farm labor. The U.S. Agriculture Department projects, without reform, there will be over a thirty percent increase in the numbers of the ‘food insecure’ people in those nations over the next decade (Paarlberg 179).

19. After reading this chapter, what do you believe are the two greatest obstacles preventing poor countries from becoming rich?

Development and underdevelopment are linked and “condition each other mutually” resulting in a divided world that consists of industrial “central” countries and underdeveloped “peripheral” countries (Valenzuela and Valenzuela, 1978, p.544), with the periphery often being constrained by its role in the global capitalist system (Valenzuela and Valenzuela, 1978, p.544).

According to the World Bank, from 1993 to 1998, poverty rate has reduced by 14 percent in developing countries, similar to about 107 million people. This may result from receiving foreign investment that plays an important role in local economy growth. For example, the proportion of population living in poverty in India decreased by half in the two decades, from the 1970s to 1990s, while the number of Chinese in poverty declined by approximately 210 million during twenty-one years, from 1978 to 1999 (Healey 2008). In other words, the standard of living is improving due to the benefits of international economic activities.

3. Part of the reason the World Bank’s standard Structural Adjustment Policies has been counterproductive partially because of unfortunate timing. Reduce government spending caused a recessionary effect, decreasing demand and increasing unemployment hurt nations. Strict monetary policy raised interest rates and helped to further suffocate investment demand and access to capital for poor farmers and low-income entrepreneurs. Currency devaluation did make exports cheaper but at a time when export markets for primary goods were oversupplied and prices were falling. Import cost also rose making it more expensive for domestic producers to obtain new technology and replacement parts. In addition, privatization of government enterprises also increased efficiency, which was accompanied by downsizing, which resulted in unemployment for thousands of the middle class. At this time the reductions in

Poor countries have taken enormous loans from wealthy countries in order to stay afloat. Paying off the compound interest from this debt prevents them from investing resources into their own country. For example, between 1970 and 2002, the continent of Africa received $540 billion in loans from wealthy nations—through the World Bank and IMF. African countries have paid back $550 billion of their debt but they still owe $295 billion. The difference is the result of compound interest. Countries cannot focus on economic or human development when they are constantly paying off debt; these countries will continue to remain undeveloped and the rich powerful nations will continue to extend their

Due to capital limitations, most governments, particularly in the developing nations borrow funds from their bilateral friends and organizations such as World Bank and International Monetary Fund (IMF) in earnest to enable them pursue development projects, and sometimes to correct balance-of-payment deficits. Nevertheless, such governments must adhere to some outlined conditions that are spelt out in the article of agreement in order for them to secure the loans; otherwise, the loans are withheld (White, 2012). Equally, a healthy population significantly contributes to economic development of

Although Ghana has sought out financial and development support from the United States, other supportive sources from developed countries may be of an asset to developing country dealing with global

The economy in a country can be affected by another country, due to the fluctuation in that country’s economy. Although there are downfalls to economic development, new developments are necessary to keep the economy stable and to provide positive impacts to the society. New developments such as providing aid to developing countries and increasing foreign trade will help that country by building a closer relationship allowing them to gain more resources to their own country. Countries all around the world face a certain amount of poverty where some countries experience a higher number of poverty rate compared to the “richer” ones. In The End of Poverty: Economic Possibilities for Our Time, written by Jeffrey Sachs, he informs readers by providing

In the book “The New Confessions of An Economic Hitman” by author John Perkins, he discusses in detail his experience as an economic hitman, and the role he played in underdeveloped and developing countries. He writes about his, various multinational corporations, political institutions, and the United States role in indebting countries to profit off them. Essentially, his book is about the United States way in expanding globalization and what can be done to stop the exploitation of other countries. John Perkins offers a new perspective on the study of international development and underdevelopment, and goes beyond numbers and graphs, to explain other factors that are a key contributor in the under development and development of some countries. In this essay, the strengths and weaknesses of this book will be discussed and compared to the perspectives of development covered in this course through the lectures and textbook. The opportunities that are presented around the world for this book to improve development outcomes, and threats around the world that may halt efforts to purse the changes that John Perkins wishes to see will also be discussed.

Most of the developing countries are mired deeply in economical obstacles, which prevent them from development significantly. In order to overcome those embarrassments world’s society struggles to find the efficient solution for poor countries’ economies. Historically, developed countries undertook policy of giving aid to their colonies, afterwards by the end of The Second World War the United States and United Nations embarked the global sponsorship to the developing countries and countries of the Third World due to humanitarian considerations. Since then many other countries have joined in the effort to provide financial aid to lesser developed or poverty ridden countries. But none of those countries that received an aid had experienced a prosperity phase and rapid economic growth.

Harvard Business School’s Case Study “Aid, Debt Relief, and Trade: An agenda for fighting World Poverty” outlines the steps, and missteps, that the world community has taken since World War II to address the efficacy of international assistance. The study focuses on international financial institutions (IFIs) and their ability to help poor nations break out of poverty and the possible obligations of rich, developed countries to assist the heavily indebted poor countries (HIPCs). Additionally, the study seeks to see if this assistance has been and can be parlayed into growth and investment for the HIPCs.

Nonetheless, the real prices of certain commodities such as lamb, tobacco and beef have increased over time due to increasing world average income, which encourages world demand. Interestingly, developing countries, which form the predominant exporters of primary commodities, earn lower relative prices over time, for instance, palm oil arrives primarily from Indonesia and Malaysia and raw sugar arrives mostly from Brazil and Thailand. Contrariwise, the world suppliers of lamb are the United Kingdom, Spain and Australia and, moreover, 14% of world bovine meat arrives from the United States (Simoes, 2013). Therefore, it can be argued that greater advantages are granted to suppliers in developed countries than those in developing countries by trade liberalisation.