E us dollars 4 foreign borrowing to obtain the

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ange developing countries embarked on aggressive borrowing programs during the 1970s. This strategy created a pattern of widespread indebtedness and developing countries now owe more than $2.5 trillion. 5. Intensification and Extensification of Export Agriculture To maintain their loans, developing countries have had to intensify their production and expand the size of agricultural operations. 6. Environmental Damage from Export Agriculture The increased scale of export agriculture operations has contributed to environmental deterioration as more chemicals are applied and agricultural operations push into more marginal areas. 7. Increase in Competition The production of export agriculture products by many developing countries contributes to gluts and drives down unit prices. To generate the same amount of foreign exchange more goods need to be produced at a cost of greater environmental damage. 8. Debt Crisis This situation has given rise to a debt crisis in developing countries. 9. Structural Adjustment Developing countries’ failure to maintain their outstanding loans brings calls from international lending bodies for “structural adjustment”. Structural adjustment seeks to enhance economic competitiveness by slashing government spending on social programs. Trap of Underdevelopment China’s Aid to Africa • Tanzania Largest be...
View Full Document

Ask a homework question - tutors are online