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ppoint16handout - ANT2 Introduction to Cultural...

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5/27/10 1 ANT2 Introduction to Cultural Anthropology May 27, 2010 Prof. Sawyer Consider the following: 1970: world’s poorest countries owed $25 billion in debt – (60 countries classified as low-income by WB). 2002: world’s poorest countries owed $523 billion. Africa: 1970: owed $11 billion. 2002: owed $295 billion (over half of all $$ owed globally) $550 billion has been paid in both principal and interest over the last three decades, on $540bn of loans, – yet still a $523 billion debt burden. What is Third World Debt? *Types of lenders: 1. Multilateral Institutional Lenders: -international agency that commands a large capital pool e.g.: World Bank, IMF, regional development banks 2. Public/government lending: -direct governmental lending 3. Private/commercial lending: -capital pools lent out by commercial banks. Purpose of Loans to LDCs 1. Government or (domestic) budget deficits: -LDC governments fail to raise enough money through taxation to finance spending. 2. Trade or balance of payments deficits: -Export sales fail to generate sufficient foreign exchange to cover cost of imports (and government is unable to correct the trade imbalance by other means). Buy imports in "hard currency" (currencies with stable value). Generate hard currency through export sales. Export sales should generate sufficient foreign exchange to cover cost of imports. Relationship between imports and exports = "the balance of payments."
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5/27/10 2 How did Debt begin? Post WWII (1950s and 1960s) – optimism about prospects of developing nations – large-scale infrastructure projects actively encouraged by World Bank/IMF. – established a debt-led model of economic development. 1970s: model created problems for LDCs. 1973 OPEC “oil crisis”= quotas, curtailed production, caused international price to rise countries importing oil as basis for continued economic development faced larger import bill.
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