Poverty

The 21st century has seen significant growth and develop in different areas of focus, which have created a crucial understanding on vital elements, which include wealth income and power. The global inequality is developed from these key factors that describe capital. The consideration that different countries have put in place different regulations have provided a crucial understanding under which it is possible to make a decision on why these is significant inequality in a period where it would have been crucial to have positive development across different societies.

Wealth and income play a crucial role in defining national income that need to be considered in having a positive understanding on the existing standards of living within a given country. Wealth and income are underlying factors which are able to generate power depending on the level at which an individual is engaged. A better understanding on capital in the 21st century requires a crucial focus on wealth, income and power is key in having a better interpretation. Piketty (2015) assert that the importance of wealth in the society is mainly due to the existing high difference between income of the lowest income earner and the highest income earner creating a very huge deficit under which the wealthy and the poor are isolated.

An increase in economic growth will likely create an effective environment where the importance of wealth is likely to diminish in the society. According to Milanovic (2014), the significant developments in the 21st century have been based on decisions that have been made greatly focusing on the wealthy who have power to influence major decisions and thus in the process creating economic instability and imbalance. This means that countering this imbalance need focus on key factors that have a significant influence on capital.

Throughout the article, Robert Reich talks about the growing gap between the upper half, and the lower half of society. The main narrator of this article is Robert Reich and he explains how the economy is going up and down for the rich and the poor. He approaches issues surrounding the rich becoming more prosperous and the poor drooping in poverty, therefore the reasons why the economy continues to worsen. According to the author, what people do in the world relate to the positions they will partake. It clearly articulates that the jobs of routine producers and in-person servers have vanished totally as modern techniques have replaced them. Reich’s argument is an eye opener and warning for society regarding unemployment that it will be facing and is currently facing due to a lack of education and technology.

“All Americans used to be in roughly the same economic boat. Most rose or fell together as the corporations in which they were employed, the industries comprising such corporations, and the national economy as a whole became more productive-or languished”. The rising and falling of boats due to exist between the rich and the poor. In the earlier days, economy favored all Americans regardless of their social status. Companies and education play a big role in the increasing gap between the rich and the poor. In contemporary America, those who are educated continue to prosper while those who lack basic education are at a disadvantage when it comes to employment opportunities.

Throughout the article, the author makes a good point here and uses three examples to explain the situation. There are routine producers, in-person servers, and symbolic analysts. He describes routine producers as those who work in the manufacturing industries and these people are poor because they are not members of any unions, are paid very low wages, and are constantly replaced by technological machines. The positions of routine producers and in-person servers have vanished totally as modern techniques have replaced them. Symbolic analysts are people who identifies and solves problems. In favor of symbolic analyst are positions such as engineers, executives, consultants, marketing experts, publicists, and entertainers are getting richer and richer. He points out its reasons as increase in demand, their techniques, and ideas can be communicated easily without gaps for terms of time and would be more cost efficient.

Reich defines the routine producers as people who work at the assembly line in big corporations, and those who are in this category tend to get poorer. The reasons he names were due to the advancement in technologies, decreases in union members, and the availability of lower wage workers in other nations. Companies are opting to employ workers from overseas because it is cheaper to pay them. Due to the advancement in technology, many machines substituted man power. Across the nation, this had caused many plants and factories to close which led to many laid-off. When big corporations needed to lay off its employees, the younger generations had the first impact since older generations were protected by seniority. This led to the decrease in union membership, and further led the power of weak employees. Advancement in technology also led to an increase in hiring lower waged workers in other nations.

According the Reich, he defines in-person servers as people who are in personal service industry such as restaurant servers, telephone operators, car washers and so on. The reasons they are poor is because of new entrants – people who used to work as routine producers – come into this segment, advance of technology, fewer benefits, and increase of immigrants. In-person servers don’t require special skills in many cases, so people who have no special skills either into this segment. That is why people who were routine producers and no longer as well has immigrants try to have these jobs. Reich uses the term ‘symbolic analysts” to describe people whose jobs are on the rise, that they are the real problem solvers, and that their skills are highly in demand worldwide. In Reich’s words, they are “strategic brokering” which compete on an international level for positions, and are highly recruited. Generally their work takes place in computer-mediated communication, and they are more likely to able to move from place to place because of their higher disposable incomes and because most companies will often pay moving expenses for their services. Computer technology gives them more tools for thinking, creating, and communicating. Therefore, the global market gives them more potential customers for their insights.

The interesting point of Reichs theory for the future is that it offers no easily visible solutions of raising the standard of living for those who reside in the United States. In fact, his argument on symbolic analyst will only enlarge the growing income inequality between the rich and poor. Unless those are benefited by a high education and superior thinking abilities, the potential to earn good money in the future is dark indeed. With fewer low skill jobs around, those who are not prepared will be scrapping to find enough work to get by. Meanwhile, the symbolic analyst, with respect to their abilities, could be raking in the dough. Reich suggest that the United Sates is in the best position to capture the growth of the symbolic analyst, allowing for the boom. The U.S. has the best university system on the globe. While most elementary education is still backward, there are also some schools which prepare young minds for their futures as analysts. The U.S. also has an advantage over developing countries in that the analyst has been here already for sometime. There are specific zones of learning and innovation already present in our country that will take years to develop elsewhere. This gives the United States a jump start heading into the next century.

The nature of human beings of accepting the realities of life to such an extent that indifference and passivity become the norm is what proves to be catastrophic for the societal falsehood of the world. The short story “The Lesson” by Toni Cade Bambara is about the extreme inequalities children had to face as African-Americans living in Harlem in the 1960’s. Bambara uses the perspective of an oblivious, naive young girl named Sylvia to reveal the genuine understanding of the circumstances she had to “accept” in a world full of injustice. In addition, to express the main ideas Bambara uses an effective technique: first-person narration. Such composition pattern makes the story more evocative since it sounds more personal. The author uses first person to depict the necessary events as seen through Sylvia’s perspective. The purpose of the story is to depict how children can be taught to understand something more than mathematics, how they can become aware of some important social phenomena.

Bambara clearly shows Sylvia’s perspective of Miss Moore from the beginning of the short story. Sylvia has a hostility towards Miss Moore and views her as a lady who dresses properly, has ugly hair and educated speech. Neighbors secretly gossip behind her back, but later find themselves embarrassed by her random acts of kindness. In reality, Miss.Moore is a kind-hearted neighbor that always seeks opportunities to lend a helping hand. Since she has a college education, Sylvia views her in a different light. Sylvia sets a certain respectful attitude towards her by addressing her as Miss Moore, as she is the only woman on the block not called by her first name. In addition, her status is represented by her education because she takes responsibility to educate Sylvia and her neighborhood friends. But the education she provides consists of schooling them for life rather than for the classroom. She instills life skill sets into them, educating them on the value of rent and her views on the unequal distribution of money in the country. She chooses to educate them on other significant life lessons, such as brotherhood. She is a woman who believe in voicing to the younger generation of the inequities that exist in America.

Miss Moore takes Sylvia and her neighborhood friends on a seemingly boring, common trip to learn about mathematics. When Miss. Moore gives Sylvia money to tip the driver, her friend Sugar informs her to give a dime. We can see Sylvia’s immature attitude as she decides to keep the tip for herself, because “ he don’t need it as bad as I do.” But we can see the direct shift between the societal differences between her neighborhood, Harlem, and the place Miss.Moore takes them to, Fifth Avenue. Toni Cade Bambara paints a different world through the vision of Sylvia, as people in Fifth Avenue are dressed up in stockings and fur coats, and at first Sylvia views White folks as crazy. As Sylvia steps onto Fifth Avenue, she is in a different realm but doesn’t quite understand the extreme distinction from her everyday reality.

The experiences they face in the toy store reveal the immense astonishment in the children’s faces. The fact that they are window shopping in the toy store reveals the position they are in. Before they enter FAO Schwarz, Sugar voices her uncertainty of her standpoint as she displays her fundamental morals, saying “Can we steal?” This reveals Sugar knows the items of the store are unattainable in any other way by her and her peers. The first item they see in the fancy toy store is a microscope. At first the children justify the $300 microscope because saving all their allowances combined would take too long. This reveals that the microscope wasn’t too far out of reach to attain for the kids. Then, they come across a paper weight. A mere paper weight costs $480 for white folks, but Sylvia’s friends, Rosie, Giraffe and Flyboy, don’t know what it is. Their confusion is evident as Rosie questions, “So what’s a paperweight?” and Flyboy responds with, “To weigh paper with, dumbbell” but the concept of a $480 paper weight does not make sense for Sylvia. The confusion soon turns into astonishment as they come across a sailboat.

All  Flyboy, Big Butt, Rosie Giraffe, Little Q.T and Sylvia are staring at the “magnificent thing” and recite the price tag as if they were in an assembly: “Hand-crafted sailboat of fiberglass at one thousand one hundred ninety-five dollars.” While all the other kids are left confused, Sylvia is left with a pissed reaction. Although Sylvia doesn’t want to give Miss. Moore the satisfaction of a response to her lesson, she questions the price of a real boat, as the price of a toy boat in this Fifth Avenue store is tremendous. She figures the price of a yacht would be a thousand. The genuine divide is sensed as the price of a toy boat in the Caucasian community is the value of a real yacht, in Sylvia’s point of view. Sylvia’s and Sugar’s hesitancy when Miss. Moore suggestion to enter F.A.O.Schwarz is shown clearly. Bambara makes visible their uncertainty to enter as he takes us into the mental conflicts in Sylvia’s head, “Not that I’m scared, what’s there to be afraid of, just a toy store. But I feel funny, shame. Got as much right to go in as anybody.” This displays the inequality that is sensed in Sylvia as she is reluctant to enter a toy store that anybody can enter. The fact that she has to question her natural rights to enter a toy store parades the inequity that exists. As a child, it is a reward to enter a toy store, but Sylvia feels out-of-place and in trouble as she reminisces about the time when she crashed into a holy church. Sylvia feels the same flood of emotion she felt when she crashed into the church and when she entered F.A.O. Schwarz. She feels judged by her status, language and the color of her skin. In Sylvia’s eyes she doesn’t feel worthy enough to enter, let alone shop at, F.A.O. Schwarz. It is only when Mercedes shoves them in that they actually enter the store. The children tiptoe, hardly touching the luxury games and puzzles, knowing the judgement placed on them. Her shame is carried through when Sugar runs her finger over the boat. Sylvia’s emotions are evoked, “And I’m jealous and want to hit her. Maybe not her, but I sure want to want to punch somebody in the mouth.” This conveys that Sylvia reluctance to touch the boat was caused by her shame and fear.

The genuine reaction and understanding Miss. Moore wants the children to grasp was the their new perspective of the injustice world they live in, and Sylvia grasps just that. Sylvia’s deep insight into the world she has learned exists after learning the price of the toys is understood as she is profoundly irate. The $35 clown that White folks viewed toys valued equivalent to the price of some of her necessities. With $35 Sylvia and her family can visit her grandfather in the country, pay for the rent and piano. The value of money in the different communities were clear. The authentic lesson Miss Moore wants the children to instill was the sense of inequality they have to face. But unfortunately, not all the children understand this lesson immediately. After the journey to F.A.O. Schwarz, Rosie takes“white folks are crazy” from the lesson, Mercedes thinks that she can shop there with her birthday money and Sugar tells Mrs. Moore what Mrs. Moore wants to hear. While Sugar understands the lesson by perceiving the world as a democracy, Sylvia takes away a profound perspective of herself in a world full of division. Sylvia’s perspective is found when she connects the lesson to a previous lesson of demanding of their share of the pie. Metaphorically, their share of the pie is the fight poor people have to demand for their share in the world. In addition, Sylvia’s perspective is reflected when, “ something weird is goin on, I can feel it in my chest. She can run if she want to and even run faster. But ain’t nobody gonna beat me at nuthin.” Sylvia instills the obstacles of the world because of her race, but more importantly the desire to achieve rather than accept her current reality.

The lesson Miss Moore gives the children by taking them to high-end toy stores was valuable. Although not all the children received the same insight, Mrs. Moore provided them a glimpse of the inequalities that were set in America. Sylvia comes to the realization that feeling out-of-place is the norm they have to face. Sylvia saying “aint nobody gonna beat me to nothin” sensing her stance in life. She is more aware of the economic discrepancy between different races, and gains a perspective of her stance. Sylvia is angry because there is nothing they can afford to buy, leaving them to shop for unrealistically priced toys. She feels a major divide between what some can afford and others cannot. Sylvia finally realizes they live a life of poverty, the extreme opposite to wealth. As Sylvia and her friends see toys priced beyond the cost of their bills, and Americans who can afford to view the toys as just toys rather than as luxury items shows them the differences in wealth in two different neighborhoods of their city. Throughout the story, Miss Moore tries to educate the children on the sense of inequality they have to face, and stirs within them a desire to achieve rather than accept their current reality.

As Zimbabwe moves further and deeper into crisis, the world still looks on from a distance and utter mixed statements of condemnation and oddly so, admiration. Strengthened by the lack of consensus on the man-made crisis that Zimbabwe has come, Mugabe’s government has continued to deal harshly with opponents in the urban areas by unleashing a so-called slams clearance programme dubbed ‘operation murambatsvina” which has left many homeless. To pacify the critics of this programme, operation garikai” has been muted to restore the vanquished hopes of Mugabe’s victims. And for this, someone else other than Mugabe is expected to pay. Requests for an olive branch have been extended to many ‘friendly’ or ‘neutral’ countries, with south Africa and China topping the list.

Observers have suggested that “Mugabe prefers the loan shark who demands no internal reforms, to the more accountable loan demanding reform. ” In a letter to the editor (Business Day 26/07/05) Mark Wade contrasted the lack of facilities and skills to provide south Africans with decent housing, health care, social services, roads, city infrastructure – with the move to “give a banana republic dictator billions of our hard-earned rands to prop up a regime that has created the very policies that have destroyed his country.

However, others view this as an opportunity to get Mugabe towing the ling suggesting that “now that South Africa seems poised to bale out Zimbabwe … should finally pluck up the courage to extract maximum advantage for the people of that benighted country.” Such sentiments are reminiscent of those expressed when Mugabe won the controversial two-third majority making other observers suggest that, he would become a benevolent dictator and would want to show the world that he meant well also leaving behind a good legacy. More like teaching old dogs new tricks or like expecting sweet lemons?

The basis upon which a loan must be extended to Zimbabwe must be based on the effect of the loan for the affected Zimbabweans. Will the loan enhance their lives and improve their access to services and human dignity. The answer to these questions is already obvious given a reading of the manner in which the Zimbabwean government has conducted itself. President Mbeki’s argument that the loan would ensure that Zimbabwean problems do not spill into South Africa has surely passed its sell-by date. South African is already home to millions of Zimbabweans displaced by the ever-tumbling economy of that country. Mugabe claimed that he is in weekly contact with Mbeki and suggested that they share ideas. This revelation makes ‘quite diplomacy’ a thing of the past and suggest that Mbeki is in complicity with Mugabe in the humanitarian crisis that has visited the people of that country.

Anyone who has been following events in rural and urban South Africa would know about the spat of high intensity removals and evictions visited upon the urban and rural poors through South Africa’s own version of shacks clearance programme. Poor and landless people have been evicted without notice and alternative land and accommodation. These people face daily evictions from bond housing and private buildings in an espoused “war on shacks that has seen the poor and landless moved from shack to shack.”

Perhaps the most affected are the farm dwellers and farm workers community who face the most humiliating conditions from farm owners sanctioned by the Extension of Security of Tenure Act and the Labour Tenancy Act. Thabo Mbeki has failed to act decisively on these issues and the scourge of poverty has an unshakable impact on the masses of South African people. This makes Mbeki not different from Mugabe, and it would be hypocrisy for Mbeki to lecture on Mugabe on these rights which he has not been able to afford the poor.

Bailing Zimbabwe means an endorsement of the irresponsible programmes of government that wrought the economic and social woes bedeviling the poor and masses. This extended from the irresponsible managed land reform, through to the dubious operation restore order. It is expecting too much to think that any amount of money put into a ZANU PF government’s coffer would be put to any good use now. History does not judge Mugabe and his government well on this, especially since he embarked on the self-saving and apparently self-destructive route in the name of anti-imperialism and empowerment through land reform. The people of South Africa must look at more constructive, imaginative and creative ways of assisting the suffering masses of Zimbabwe. Bailing the Zimbabwe government is definitely not one of them.

What is debt?

On an international scale, debt is the owing of money from one country to another or an international organisation as a result of previous borrowing because of need.

Why are some countries in debt?

Countries can be in debt for different reasons:

• Trade deficit

When a country’s imports are worth more than a country’s exports, the country loses money and therefore it is forced to borrow money from other countries or international organisations to try and cover the losses.

• Natural disasters and tied aid

After a natural disaster, a country may become dependent on the aid of another country for a short period of time. However sometimes the aid given is tied aid where the country receiving aid may have to pay back the money given (possibly with interest). They are therefore in debt to the donor country/organisation.

• Money mismanagement

If a country mismanages their use of money (most likely through the government) and spends money unnecessarily while taking out loans to cover the cost, the country can end up in debt.

The Effect of Debt on Development

When a country is in debt, a majority of the money it generates is used to pay back money to the donor country. This means that there is little money being invested into the social infrastructure of the country, so healthcare and education levels remain the same or get worse overall slowing down or sometimes even reverse developing a country as literacy rates may fall and not enough money could be invested in improving healthcare.

Ways of solving debt problems

Cancelling debt – What are the advantages and disadvantages?

Advantages

The advantages of cancelling debt are that it can allow a poor country to start investing the money it gains into its development/ social infrastructure rather than paying back debt to developed countries. This can overall help to fight poverty and reduce the development gap. In 2005, Zambia had $4 million of debt cancelled and in 2006 it had enough money to pay for free healthcare for millions of people living in rural areas, improving the quality of life.

In Tanzania, money saved from debt cancellations allowed the government to abolish primary school fees in 2001. As a result, the number of students that go to primary school doubled. These examples show that by cancelling debt, it allows money to be invested in education which can lead to more people getting jobs, overall contributing to a country’s economy, improving the GDP and by investing in healthcare, the life expectancy and infant mortality rate can also decrease.

Summary

• a country can invest in its development
• It reduces poverty and can reduce the development gap
• examples include Zambia and Tanzania

Disadvantages

Although cancelling debt can help a country to develop, there are also some disadvantages. Firstly, the donor country loses a significant amount of money which can slightly damage its economy. Developing countries which have had their debt cancelled could start taking out more loans, in the hope of having debt gained from that cancelled as well (This however is unlikely as eventually developed countries will eventually see when a country is not worth giving money to and in a time of crisis, nothing will be given) When a loan is taken, the money should be returned and if it is not, it could give the country which did not pay back, a bad reputation.

Summary

– The donor country loses money

– Countries could take out more loans

– A loan should be paid back if taken in the first place

Debt for Nature Swaps

Deforestation largely takes place for economical needs of a country to try and pay off debt. A debt for nature swap is an agreement between a developing nation in debt and one or more of its creditors. In a debt for nature swap, the country or organisation owed money, writes off an amount of debt in return for a certain amount of environmental protection. They were first established in the 1980s in the attempt of solving two problems with one agreement: 1) to minimize the debt of developing nations and 2) to minimize the environmental destruction that frequently takes place in developing countries.

A company called WWF (world wide fund for nature) which cooperates with countries such as UK and USA has helped to structure and design many debt for nature swaps. In 2008 they helped to structure and facilitate one of the largest debt for nature swaps in Madagascar’s history in which 20 million dollars was committed to preserve the country’s rich biodiversity. Also in 2008, the USA reduced Peru’s debt by $25 million in exchange for conserving its rainforests.

Debt for nature swaps are extremely beneficial because they not only cancel the debt of a country allowing them to invest in development, but it helps to protect the environment and conserve some of the world’s rainforests. This makes it better than just cancelling debt.

Outline the key principles of Neoliberalism and its actual and prospective contribution to wealth and welfare in developing societies. Counter-revolution was seen as a new vision of growth when it first comes out. In the mid 80s, the development if counter revolution was supported by the Western media and government aid agencies, also by some very influential international organisation, e. g. the World Bank Counter revolutionaries see themselves a better interpretation than the development economics.

The development economy identify the problem of the developing countries in various way, it imply dual economics, labour surplus, low level equilibrium trap, unbalance growth, vicious cycle of poverty, big push industrialisation, foreign exchange bottlenecks and unequal exchange rate. However, counter revolutionaries claim the orthodox economics was unrealistic because of it assumption on people behaviour and technology implication in the industry. Also, it’s said to be irrelevant, since it’s main concern is with the allocative efficiency of given resources.

These weakness means the development economics cannot address the problem of the growth aspect, neither it could deal with the problems of poverty and the distribution of income. Some counter revolutionaries believe that, the 3rd world exists only as a kind of collective psychological delusion. It’s important to see how the counter revolutionaries interpret their view to the 3rd world to understand its policy concept. And their views on 3rd world derive from its continuing political engagement with the struggle against socialism. They also stress that the 3rd world had a kind of 3rd worldism, which contains an anti-west attitude.

They seen the west as exploiters who exploits the benefits from the already poor 3rd world, and in some cases, they are right, and these attitude and facts alleged crypto socialist policies of 3rd world government. Counter-revolution was an abrasive now approach. When looking at the policy of the counter-revolution, we ought to see how it views the 3rd world problem, and what solutions do can the counter-revolution offers. According to the counter revolutionaries, the main problem of the 3dr world countries is their over-extended public sector, which cause the problems limitation through government intervention and central planning.

For an economics to be efficient, there needs to be the existence of the market and incentives. However, they are being filters through government policies and agencies. Also, counter revolutionaries seen physical investment is only one of the determinants for the growth in the development. Human development such as education and building of infrastructure are as important as physical investment, and it should not be place as a less important government objective than physical investment. The economics policies of government and the distortion they induce re now the major focus of the analysis of the development policy.

The clear induction we can see here is that, unnecessary government intervention will endanger the benefits of the market, and the relatively unimportance of human development policy, which will hinder the process of development. These are the main components of the counter-revolution’s new vision of growth. Why would be the public sector being the problem? We can see from an example. If there’s a public electricity corporation which is making a loss, the government decide to make up the loss by subsidise it using the tax revenue, the end result will be little incentives for the management to minimise cost.

Cost minimisation is essential for n efficient market and the process of cost minimising is difficult and time consuming, and it’s unlikely to take place without some pressure or incentives. If the government removes that pressure, public enterprise tends to become complacent and high cost. As a monopoly, the public sector is said to be fail to respond adequately to consumers preferences by insulate itself from the consumer demand. Also, many 3rd leaders may wish to strengthen their political power by influencing the economic performance, thus the country’s development prospect.

This means that when an economic decision was made, it’s on the benefit for the politicians, not to the economy. And these are the factor causes other problem in the 3rd world countries, such as problem on foreign trade and industry, distortion of key prices (e. g. exchange rate) in the economy, which in turns causes balance of payment problems. The other main issue arise for counter revolutionaries are the practice for trade and aid policy. There are a few anomalies highlighted by counter-revolution. Some counter revolutionaries’ claims that official aid has a regressive impact on world income distribution.

It’s theoretically possible according to Bauer, ‘many tax payer in the donor cities are far poorer then many people in the 3rd world countries where, moreover, aid often benefits the prosperous rather than the needy. ‘ Sometime, the aid is aimed to relief poverty in the recipient country, but the recipient country may resist it since they feel such attempts infringe its sovereignty. E. g. , local farmers will suffer income lost if food aid was given to people free of charge, no one will spend money on the domestic food products. Thus, the donor’s citizens could have been taxed for the benefits of an unfriendly state.

These are the major anomalies concern the counter revolutionaries on the ground of aid giving. Also, when aid is given to a 3rd world country which already had a over extended public sector, the government will tends to use the aid to support that public sector, which they can still claims that the aid had been used on the development of the economy. In this case, aid has help to boom the unproductive public sector beyond what it would have been in the absence of aid. The counter-revolution views conclude that, aid should therefore be given to the private sector.

One of the anomalies emphasized by the counter-revolution is that the giving of aid merely relief poverty in the 3rd world, it might even worsening it. In the opinion of the counter revolutionaries, aid should be abolished. However, for political reason, this is very unlikely will be the case. So counter revolutionaries advocates that, aid should be reduce in size, also, it should be use as reward for policy reforms. Policy reforms which shows development of the economy as well as living standard of the people and the moving towards socialism. The counter revolutionaries also have its view on trade.

Counter-revolution has always opposed controls over foreign trade. At international level, the counter-revolution’s opposition to ‘ management trade’ has been expressed through its critics to the International Commodity Agreements (ICA). ICAs are internationally negotiated schemes of intervention in the markets for exports of primary products. Counter revolutionaries oppose ICA because of its failure to alleviate the poverty in the 3rd world countries. Little suggests that ‘ The increase political management of trade is unlikely to help the poor or the poorest states’.

Counter revolutionaries suggest that the 3rd world countries are minimally involved with production for export because they tends to be remote, isolated and lacking the skills to forge the effective links with their surrounding society. However, in the reality, the arguments of the counter- revolutionaries do not entirely hold up. About the point of 3rd world countries lack of share in export, we can actually see that, in 1982, one third of the 3rd world countries had export that accounted for 20% or more of third domestic product.

Further more, on average, 60% of the export of the 3rd world countries was of fuels, minerals or other primary commodities. And for the counter- revolutionaries’ negative opinion on aids, in the case of India, Bangladesh and South Korea, aid merely creates what the counter- revolutionaries sees as dirigiste syndrome. When counter- revolution is implemented across Africa, it had failed in nearly all situations, per capita income down 10% over the period. They were not prepared for high-level market openness.

In Philippines and Sri Lanka, there were mix results, but certainly not successful, causing economic growth fell, increase in poverty and unemployment. The most successful case of the counter-revolution policy is in South Korea, where it achieve falling inflation rate, GNP growth and income distribution improved, current account deficit narrowed and social welfare improved. But the success can be achieve only because they were not only looking at the macroeconomic in nature, but also consider social welfare.

The unhelpfulness of the counter- revolution comes from its particularly strong preconception of the actions that need to be taken to promote development. That preconception is that development problems are problems of resources allocation. It has also been attacked for its simplistic accounts of the nature of ‘real’ markets in many developing countries and for their one – dimensional accounts of what motivates apparently isolated economic actors. Some policies and theories do have some merits, but they need to be accompanying by other policy to make it effective.

The biggest drop in percent of population living on $1 or less occurs in East Asia and Pacific, this followed suit with the globalisation of the world, with TNCs spreading across continents. East Asia, china and India have seen the biggest influx of foreign direct aid and seen a massive expansion in their secondary sector. This has brought a surge of higher paying jobs and improved the livelihood of many. The global implications of this have created a different economic climate with increasing power shifting from America to Asia.

The standard rich and poor divide is becoming increasingly blurry with many eastern Asian countries moulding the global future. The implications could be dangerous, though economically China is inspiring, socially and environmentally the country is still in the dark ages and with power shifting are say on human rights and environmental damage is becoming slowly quieter. Sub-Saharan Africa has shown little change in the percentage of population living on $1 or less. This contradicts the fact that aid has increased dramatically since 1981, showing that aid has little effect on long term success of a country.

The poor inhabitants of Africa has allowed many multinational companies to take advantage of the low paying subsistence farming and have managed to shift control from them to the to TNCs. Cash cropping has become a common place in Africa, with a high dependency on the technology and capabilities of the MEDC companies. Eastern Europe and Central Asia have seen an increase in the percent ever since the 1990s, the breakdown of communism and caused a vacuum of development as Europe must spread into the global era.

Being slow to take up globalisation the countries of Eastern Europe have seen an increase in poverty as the countries in East Asia and South Asia attract the sights of TNCs. b) With reference to specific examples evaluate the possible ways of reducing global differences in wealth. With connections between the rich and the poor becoming increasingly stronger in the global era, it is becoming increasingly harder to ignore our personal effects on the less fortunate. Ties created in a different social era have suppressed the development of the less economically developed countries.

We have a responsibility to assess our impacts and create a suitable response if we are ever to progress to a world were boundaries no longer exist. The globalisation of the North and South divide has not allowed countries to exploit their potential but instead allowed the power countries to strengthen their hold over the poorer countries. Can we continue to chuck aid aimlessly at countries, increasing their dependence or must our strategies incorporate the social and environmental differences for their true independence?

During the 1900s, many less economically developed countries took advantage of the economic stable environment that allowed small interest rates on loans. Seeing an easy solution to quick development, LEDCs blindly took many loans to fund their own economic and social environments, but the year of 1982 brought a sudden increase of world interest rates. The oil crises placed many poor countries into a spiral of unimaginable debt with the only solution being to take out more loans, only creating a short period of stability.

So is the solution simply to cancel all debt the “forgive and forget” idea or will it create more problems than it is worth? Most poor countries own billions of pounds of debt, governments of these countries are forced to increase tax, sell of assets (land and resources cheaply) and are easily influenced by the powerful countries. Tourism is one of the biggest industries in the world, and with a set of wealthy countries with wealthy inhabitants wanting to see the warm and different sections of the world; it poses a great asset that many LEDCs can exploit.

The individual and unique locations that many LEDCs own means that tourism could offer a possible solution to the wealthy divide. But a hidden danger lies in this so called silver bullet. Many LEDCs see the opportunity of tourism, but the exploitation of this has placed most of the inhabitants of the hot country feeling subjugated. Vietnam is a classical example of a naturally beautiful country with high amounts of debt, its unique social lifestyle and unspoiled countryside has attracted many people. Unfortunately the government has placed too much emphasis on tourism and society has felt the re-precautions.

With wealthy westerners and their bulging wallets, the Vietnamese government has done what it can to part the people with their money. This includes selling land in rural areas used as farming for subsistence farmers to build hotels and tourist attractions. Forcing people out of their villages to create a fake village aimed solely at selling souvenirs and creating money thus creating social hostility as age old traditions are placed on hold for the welcoming of the westerners. In one case in a small village called Hanoi, a small battle took place as builders fought with the locals for a section of land destined for a supermarket.

Even though tourism is a possible source of money and if tapped properly can benefit Vietnam, the reality is often less fair. Most money made by tourism is often injected back into tourism, many used for infrastructure and amenities is designed for westerners. Supermarkets and hotels are unlikely to benefit the locals with most jobs not going to local population, even if tourism has a positive effect on the locals, they are often highly dependent on the tourists seasons and good weather. Many resorts in Vietnam are owned and controlled by TNCs, removing the major economic benefits to their base countries often in the MEDCs.

Tourism is a powerful industry but as seen in Vietnam can often just be an extension of the western world, the original purpose of advancing the country through careful exploitation of their country can often create hostility or great dependence on the wealth of the MEDCs. If the countries are ever going to develop they can’t solely base their economic status on the money of the powerful ones. Aid is seen by many people and governments as simply helping the poor, but the fact is giving aid is more complex than is expected.

Aid is identified as the transfer of resources encouraging economic growth in developing countries, but simply saying we are giving money to LEDCs doesn’t make it aid. Foreign aid is aid given by more economically developed countries and must fit the criteria of not giving commercial benefits for the donor country, but most aid has strings attached. For example the British government has funded many projects in LEDCs including Malaysia’s Pergau hydro-electric dam scheme. i??234 million pounds was given as conditional aid to Malaysia but soon came out that in conjunction Malaysia was signed to numerous million pounds defence contracts.

Short term aid and charitable organisations should also ways be welcome. Emergency aid is essential for any country both MEDC and LEDC and charitable organisations is specialised aid that is appropriate for many countries while pumping aid into infrastructure that is widely inappropriate for the peoples social and economic development will again only create another dependency. Fair trade is an old idea, but only in recent years has become more prominent as consumer demands change to recent awareness of poverty.

It is a simple idea that doesn’t require huge funds into countries and aims to level the playing field of the trading game. In Ethiopia, banana prices were at a 50 year low and with a continuous increase in banana production it was set to further decrease. Essentially producers were competing with other local producers unaware the rare deal they have. Ethiopia has a wealth of resources and the fractured banana industry has only allowed TNCs and countries to exploit the fragile industry, placing the producers with little power to negotiate. This is where fair trade bananas took hold.

By joining numerous producers together offering increased profit and not reducing quality, they are given more power over the export business. Fair trade offers consumers a moral choice, though more expensive than supermarket brands it hasn’t dampened the fair trade business. Fair trade works simply because it doesn’t rely on funding; it relies on creating a sustainable and suitable environment for primary industry to flourish. MEDCs do rely heavily on LEDCs and their primary production, but simply bulling and controlling the world market has lead to an uninspiring industry.

The key word is sustainable development of industry, unlike foreign aid which can fluctuate and sometimes doesn’t directly go to the people who need it, fair trade is aimed at the most poverty stricken societies. The future of the world depends on the united front of all the countries, if we are ever going to be able to progress as a society we have a responsibility to breakdown the invisible walls that separate us. This can’t be done by taking pity or forcing our help on to them we must create a global climate for them to grow and develop without being constricted by the politics and greediness of the power countries.

The simple fact is most LEDCs have the capabilities and resources to remove themselves from poverty, and given the chance will be able to. Though our responsibility in their future should be little, we must object to political terrorism and dictators and even our dictatorial control. Most LEDCs should develop without the influences of the western world; they are individual countries that should exploit the needs of the western world. The less economically developed countries must stand on their own two feet, without the pillars of the MEDC telling them were to stand.