Various strategies have been employed to try and reduce inequalities. Debt abolition is when some or all of a countries debt is cancelled. The money can then be used to develop. The SlideShare family just got bigger. Home Explore Login Signup. Successfully reported this slideshow. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime. Reducing disparities.
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Reducing disparities Download Now Download Download to read offline. Development theories. Using this renewable, indigenous, non-polluting resource, micro-hydro plants can generate power for homes, hospitals, schools and workshops. Practical Action promotes small-scale hydro schemes that generate up to kilowatts of power. This provides poor communities in rural areas with an affordable, easy to maintain and long-term solution to their energy needs.
This means that this is a great example of Appropriate Technology. Trade is the exchange of goods, money and services between countries and regions. The goods made in a region and sold to other places and known as Exports they Exit the country or region. The goods bought into a place from other regions are known as Imports they come Into the country or region. Trade can be used to help even out the gaps in development.
If value of exports for a country or region is greater than its Imports it will have a trade surplus and will make money. If a region imports more than it sells then it will have a trade deficit. Most HICs import primary products which have low value and export high value manufactured goods an even higher value services.
Most LICs export lower value primary products such as cocoa, cotton etc. The price of primary goods also varies widely and producers can lose out massively, so the trade in a sense is unfair. This is a scheme designed to get a better deal for the producers of the primary products that HIC countries need. The producers get access to the market for their goods, a contract for extra financial security , better prices for their products and access to the Fair Trade Premium, which is a sum of money available from the Fair Trade foundation to be spent upon improving yields, farming practices, health care or education.
In addition, more than 7 million people in Africa, Asia and Latin America benefit from Fair Trade - farmers, farm workers, and their families. Many LICs took out huge loans for millions of pounds during the s, offered to them by banks and governments in rich HICs. The LICs wanted to use the money for various development projects such as building dams, roads, schools etc.
The idea was to help countries to develop by improving their industries and infrastructure. For example, were it not for the Marshall-Aid plan of , the UK, France and Germany would not have been able to reconstruct their economies after the Second World War, and reach the level of development that they now enjoy.
Unsustainable debt refers to debt that cannot be repaid in the future without raising more debt and jeopardising the future development of the debtor country, or even sending its development into reverse. The debt service ratio is the ratio of debt — interest and principal payments due during a year — expressed as a percentage of exports typically of goods and services for that year.
There are several other key indicators of excessive debt levels. Firstly, domestic policies can fail to develop robust and stable economies. This means that key industries in these economies fail to develop and generate sufficient export earnings by effective participation in the global trading system. Secondly, ineffective control of public finances can force national governments to borrow from abroad to enable them to fulfill their obligations as elected or non-elected governments.
This could be due to either excessive spending on inefficient and uneconomic projects and activities, or because optimal tax revenues are not collected. This, of course, leads to export problems and the need to borrow. Destabilising macro-economic shocks can also generate the need to borrow. For example, a collapse in commodity prices, which affects those countries dependent on commodities and other primary products and can result in a significant collapse in export revenues and increase the need to borrow.
A rise in commodity prices, especially oil, can have a negative effect on countries dependent on oil imports. This can significantly hinder development as it can lead to recession, with falling public revenues.
Many have argued that the debt which followed the first oil shock of pushed many countries into unsustainable debt levels. Significant Increases in oil prices in a short period of time forced many less developed countries to borrow to ensure sufficient oil supplies. At the same time, oil rich countries began to make loans as a way of investing their new found oil revenues.
Finally, natural disasters can have a considerable impact on public finances in the short run as well as destroying infrastructure, making the economy less efficient, less able to export, and increase the need for further finance for rebuilding works.
Many of the most heavily indebted countries will, over a period of time, have suffered from most, if not all, of the above adverse conditions.
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