What to do: Get out stuff for notes. – Title: “Why do countries face obstacles for development?”

General info Gap between MDC & LDC is large and growing – Infant mortality-narrowed – Life expectance-same – GNI per capita-widened LDCs want to develop but the question is…how? 2 methods

Self-Sufficiency Countries encourage self-reliance and discourage int’l trade, interference, etc. – Limit imports, require licenses, raise tariffs, etc. – Invest locally Modest development but fair across all sectors Local producers have little incentive to improve b/c less competition Req’s lots of gov’t involvement Not used as much since 1990s.

International Trade Identify their assets

Int’l trade Uneven resource distribution can make too much dependence on a single commodity Dependent on other countries Four Asian Tigers/Four Asian Dragons-rapidly developed from 1960s-1990s – Who? South Korea, Singapore, Taiwan, Hong Kong Arabian Peninsula-dependent on oil

World Trade Organization (WTO) Reduce barriers on trade – Tariffs, quotas Movement of money Enforcing agreements Protects intellectual property

Finances World Bank – Loans money to countries to reform administration and implement infrastructure projects International Monetary Fund (IMF) – Loans money to countries experiencing balance of payment issues Issues with countries unable to repay their loans

Finances Some are beginning to require LDCs with debt issues to make certain reforms to get the loan/assistance….Is that okay?

Stimulus vs. Austerity Stimulus Gov’t spend more than they collect in taxes – Increases debt – Spent putting ppl to work on public projects – After recovery, ppl pay debt off Austerity Reduce taxes so ppl can spend more Gov’t spend less/reduce programs so debt doesn’t increase

Trade organizations The EU has reduced trade barriers to the point that they are dependent and connected economically – Can be good and profitable – Can cause one country’s recession to cause issues for another country

2008 recession Let’s review….. Where did it start? – Housing Who all does it affect?

Fair trade Protects workers & small businesses in LDCs

Microfinance Small loans to poorer individuals who wouldn’t normally qualify 99% end up paying back b/c their business is profitable