Poverty and Development
Arguments for SAPs
1. Market-orientated development has proved effective in many places, therfore the SAPs encoirage the economic dyanism and entrepreneaurilism that give the right conditions for growth. 2. SAPs were highly effective in South Korea 3. No country is obliged to take IMF or WB support, so neither are SAPs forced upon states.
Arguments against SAPs
1. Neo-colonial argument says that they increas ethe dependency of Southern states on northern states 2. Can actually be seen increasing poverty in areas such as in Bolivia where a requirement to privatise water supplies led to a 2% increase in poverty 3. Encouragement to increase exports can see countries result in exporting commodities as opposed to products which J. W Smith warned is key to their dependency on richer economies.
Rostow's steps to development
1. Traditional society (a decentralised hunter-gatherer agricultural economy) 2. Preconditions for take off (external demand for produce begins to change national identity and shared economic interests) 3. Take-off (sector-led growth is common through standardised financial system) 4. Drive (economic diverisfication, reduced poverty and rising living standards) 5. High Mass Consumption (The economy is increasingly orientated around the prodcution of modern consumer goods, with affluence becoming widespread)
Difficulties measuring inequality
1. Trends. Global economic trands can affect the divide between rich and poor, the long view of equality take sinto account trends over the nineteenth century as well as the twentieth. But the data doesn't always stretch back this far so estimates have been made that in the 1800s the GDP per captia was likey three times in America what it was in Africa. But in 2000 it was twenty times more. 2. There is no consesnus on whom the rich are and who the poor are makinga direct comparison of wealth difficult to determin and open to maniopulation 3. There is not yet a consesnus on what is being measured, purely economical like the WBO's GDP per capita rankings or the UN HDI?
2009 UN Human Development Report
24 lowest HDIs were Sub-Saharan African states, 76% of the population of these countries were expected to be undernourished and only 46% had access to clean water. (In 2007, this geographical area accounted for 68% of HIV cases)
2015 HIPCs
36 countries have recieved HIPC relief and had their external debt cancelled in full, meanwhile 3 countries are being considered for relief as a complete inability to sustain debts is necessary.
The International Monetary Fund
A body that works to promote global growth and economic stability. When member countries miss payments or end up in debt the IMF can be used as a fund of support and issues last resorts.
Purchasing power parity
A calculation of purchasing power that takes account of the relative cost of living and the inflation rates of different countries, sometimes based on the "international dollar". The WBO used PPP to determine that absolute poverty begins when income is below $1.25 a day.
"one size fits all"
A criticism of the Modernisation theory that rejcts the belief there is a universal model for development.
North-south divide
A global generalisation that countries in the Northern hemisphere tend to be more developed economically than those in the southern hemisphere (ignoring Australia). It is a conceptual rather than geographical divide that has been defied in recent years by the growth of "Tiger Economies" South Korea, Hong Kong, Singapore and Taiwan.
Poverty cycle
A set of conditions that tend to make poverty self-perpetuating through its wider impact of health, civic order, political and economic performance and so on. This is often offered as an explanation for Sub-Saharan Africa's poverty issues.
Absolute poverty
A standard of living which is deemed insufficient to keep body and soul together. It is based either on income level or access to resources.
Relative poverty
A standard of poverty in which people are deprived of the living conditions and amenities which are customary in the society to which they belong.
Transnational corporations
An enterprise comprising entities in more than one country which operate under a system of decision-making that follows a set of policies and ambitions. The entities are so linked, by ownership or otherwise, that one or more of them may be able to exercise a significant influence over the others and, in particular, to share knowledge, resources and responsibilities with the others.
Neo-mercantilist
An ideology associated with the Tiger Economies and alternative view of development which discourages excessive importation, instead encourages exports and centralised currency control.
Alternative view of development
An understanding of societal development which opposes the modernisation theory of orthodox understanding Wherein poverty is defined by a humanist assessment of freedom and empowerment. It is measured by access to stability and social oppertunities (e.g Human Development Index at the UN) Proposes a program of greater local control through state intervention and government directed growth through minor protectionism and currency control. (e.g Tiger economies) It assumes the main obstacles to development are external factors and argues that every country has individual paths to development.
External factors criticism
Another criticism of orhodox theory is the emphasis on changing internal barriers to trade rather than accepting or sddressing the importance of extrernal barriers to development such as the structure of global trade or the current economic situation
Eurocentric criticism
Argues that the encouraged neo-liberal policies of modernisation theory put too much trust in the European process of devolopment.
Debt Crisis of 1980s
Beginning with Mexico in 1982, countries began to declare themselves unable to pay their debts. Northern banks began to collapse and in desperate attempts to pay off their debts developing countries channelled money away from infrastructure.
Arguably ending sub-saharan poverty
Between 200 and 2011 the region's economic grew at a rate of 4.7 per cent per year. This is after the 1980s/1990s brought an influx of international aid enterprises, a number of civil-wars drew to a close, and China drew up commodity prices.
Debt relief
Campaigners have argued that by writing off world debts, poverty may be reduced and the inequalities that have grwon during SAP enforcement may decline. However, it may also induce a period of financial economic instability and the uncertainty as to whether the money not being spent on debts will actually go towards infrastructure.
Equalising trends
Developments that show decreasing inequality on a global stage. such as economic progress made in China and (somewhat) in India.
Disequalising trends
Developments that show increasing inequality on a global scale such as deepening absolute poverty in sub-Saharan Africa
The World Bank
Focusing on developing countries, TWB tries to invest in schemes of development for humana nd infrastructure causes (e.g education, roadbuilding, healthcare, electricity). It is also responsible for monitoring government activity in these countries ranking corrupt nations.
World Trade Organisation
Formerly GATT, this multilaterak organisation sets rules for global trading and resolves disoutes between member states, and tries to standardise global trding bstandards through 30+ treaties (That all members must ratify)
Development
Growth, the act of improving,enlarging or refining. Development is often associated with economic growth, but the term is deeply contested.
Brady Bonds/HIPC Initiatives
In 1989 the USA underwrote a poportion of Latin american debts. In 1996 the IMF and WB negotiated a Heavily Indebted Poor Country Initiative extending the possibility of debt relief to some of the poorest coutries - but these reliefs and low interest loans still come with performnce conditions.
1970-80s Latin America
In Chile, years of distruption followed an SAP supported Pinochet regime
Zapatista Army of National Liberation
In mexico, the ZANL, launched in protest of the North American Free Trade Agreement of 1994. They strongly oppose the Modernisation view of development and work towards local agrarian empowerment.
Asia Financial Crisis 1997
Malaysia refused IMF lonas and managed to recover quicker than South Korea or Thailand
1944 Bretton Woods Conference
Meeting that established the Post-war global economic system that established the IMF for last resorts adn administration of debts or payment crisis; World bank for lending to development projects and GATT (now WTO) promoted free trade.
Wallestein's theory
Often seen as a direct opposition to the Washington Consensus, this world systems theory modifies dependency theory to show how the Core acts as a global bourgeoisie and is concentrated in the north, even though it is the periphery which provides most raw materials. The core has the most dverse production from which to profit.
Southern Consensus
Often seen as the opposition to Northern modernisation, this isnt really a consesnus and may manifet as anything from neo-mercantilism, post-colonial ntional fronts, market stalinism such as in china.... However, these processes too can cause problems for hman rights especially in Tiger Economis.
Neo-marxist dependency theory
Originally proposed by Andre Gunder Frank, this is an alternative approach to development that suggests "development" is a myth perpetuated to describe the true nature of the relationship between poor and rich countries. It distinguishes between a core and periphery of world economics (which is mirrored at a local level ad imposed by local elites). This continues a pattern of dependence from the smaller poorer countries of richer countries by utilising terms of international trade, racism, media, hegemony, TNCs and education systems.
Zambia SAPs
Requirements to cut public spending led to an escalating infant mortality, fall in life expectancy and Primary school attendence fell by 20%
Heads of Bretton Woods System
The Head of the interntaonal monetary fund is always from EU. The WB electoral system is weighted proportional to factions meaning that the US vote is always more prominant, the head of the world bank isalways appointed by the US Treaury Secretary.
1999 Human Development Report
The UN reported that the combined wealth of the world's three richest individuals exceeded the combined GDP of all the countries designated as the world's least developed - with a total population of over 600 million people.
Modernisation theory
The belief that there is a single linear path to development, based on the growth of western countries from pre-industrial, agrarian societies to modern, industrial and mass consumption ones. Originally championed by W.W Rostow in 1960
Washington Consensus
The dominant policy ideas of the WBO and IMF which sort to stabilise, privatise and liberalise.
Internal trends
The general internal trends of growing internal inequalities
Gross domestic product
The total value of all goods and services produced in an economy, a measure of national income.
Orthodox view of development
Traditional understanding of societal development which was heavily influenced by Rostow's "non-communist manifesto" wherein poverty is measured by income and national GDP per capita (e.g WBO absolute poeverty line of $1.25 a day) Based on a technocratic neo-liberal program of deregulation and a uni-linear global economy Assumes that all under-developed nations will naturally become like western economies.
Structural Adjustment Programs
When pushing for neo-liberal economies in developing countries, the IMF and WB argued that the countries would be unabke to develop inless they aligned their internal structures with the neo-lib international framework. Therefore conditionalities were added to their loans and WB investments that requeired deregulation, cuts in government spending and ending dometsic subsidies.
Brandt reports
a series of 1980s papers published by the Independent Commission under Willy Brandt. They drew attention to the so called "North-South divide". The rprots highlighted the dependency of the North's prosperity on the development of the south.
Growing equality view
aAgroup of recnet commentators have argued contrary to the view that as the rich get richer, the poor get poorer by arguing that in actual fact the world is becoming more equal. These include: John Kay, british economist; Martin Wolf's "Why Globalisation works" (2005); and Milton Friedman in 2006.
modified Washington Consensus
in the 1990s Poverty reduction Strategy papers proposed a supplement to SAPs that included more local consultations on reducing levels of poverty. Protetced some "pro-poor" spending whilst still developing a free market approach. HIPE (hevily indebted poor economies) meant to be offered some relief.