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Unformatted text preview: ECONOMICS HIGHER LEVEL PAPER 3 Wednesday 7 May 2003 (morning) 2 hours M03/330/H(3) IB DIPLOMA PROGRAMME PROGRAMME DU DIPL&ME DU BI PROGRAMA DEL DIPLOMA DEL BI c 223-036 7 pages INSTRUCTIONS TO CANDIDATES ! Do not open this examination paper until instructed to do so. ! Section A: answer one question. Section B: answer one question. ! Use diagrams where appropriate. SECTION A Answer one question from this section. Question 1 Read the following article and answer the questions which follow. IMF&s four steps to damnation 7 Step Three is market-based pricing & essentially raising prices on food, water and cooking gas. This leads to Step-Three-and- a-Half: what Stiglitz calls the IMF riot. 8 The IMF riot is painfully predictable, as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998, Indonesia exploded into riots. 9 The IMF riots cause new flights of capital and government bankruptcies. This economic arson has its bright side for foreigners, who can then pick off remaining assets at rock bottom prices. 10 A pattern emerges. There are lots of losers but the clear winners seem to be the western banks and US Treasury. 11 Now we arrive at Step Four : free trade. Europeans and Americans today are kicking down barriers to sales in Asia, Latin America and Africa while barricading their own markets against the Third Worlds agriculture. 12 Stiglitz has two concerns about IMF and World Bank strategy. Firstly, it undermines democracy as the plans are devised in secrecy. Secondly, it does not work: for example, under the guiding hand of structural assistance, Africas income dropped by 23 %....
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This note was uploaded on 02/12/2010 for the course ECON 201 taught by Professor Smith during the Spring '10 term at Whittier.
- Spring '10