How to Keep the Third World
Countries at bay
Presentation
by
Emily Yao
Recipients of Aid

Single commodity countries
– prices fluctuates because of the world
market economy

Lack of trained people
– building an educational system takes time
– insufficient amount of people to learn the
technology
Recipients of Aid

Quest for capital
– seek it overseas because of lack of supply

Need for foodstuffs
– implemented policies to encourage cash
crops
– food for consumption diminished
– need food imports to feed citizens
Bilateral Aid

Direct aid from one country to another,
usually from First World countries to
Third World countries
Multilateral Aid

Aid that is funneled by a non-affiliated
agency, such as the World Bank or UN
agencies
– considered to be more objective
– less politically affiliated and more freedom
is granted to the developing country
– less intrusion
World Bank

History
– Created to help in reconstruction after
WWII
– Grant loans for non-profitable construction
like roads, schools, and housing projects.
– Loan money to less industrious countries
for promotion of their economic growth.
International Monetary Fund
Mission is to supply member states with
money to help them to overcome shortterm balance of payment difficulties
 Money is only made available after the
recipients have agreed to policy reforms
in their economies-to structural
adjustment
 Membership of the World Bank is
conditional upon membership of the IMF

Structural Adjustment
Programs

Grant other more
industrialized
countries, like the
US, access to
resources like
cheaper labor and
foreign investment
with lower export
tariffs.
Structural Adjustment
Programs

Third World Countries
– national removal of subsidies to the poor
on basic food stuffs
– tax systems are made more repressive
– real wage rates are allowed to fall sharply
Structural Adjustment Loans
Not tied to one specific project
 Governments had to agree on a drastic
program of liberalization for multi-million
dollar loans

– reduced state’s role in the economy
– lowering barriers to imports, removing
restrictions on foreign investment
– emphasizing production for export rather
than for local consumption
Privatization and Deregulation
Foreign investment is taking over the
developing countries
 Less power and control on the part of
the developing state
 Can raise rates, which make the poor
suffer
 Local governments are given money to
let foreign investment take over.

Consequences of Aid

Economic deprevation
– Social expenditures are
slashed, like health and
education

Environmental
devastation
– Massive deforestation
– Near extinction of nearby
coastal fish
Solutions
Abolish these institutions
 Create a special UN agency to control
the World Bank and the IMF
 Peoples and countries force change on
the institutions, by confronting them
with evidence of the injustices

Cycle of Oppression

Funding for Third World
Countries
– Never get out of debt
– Resources will be
depleted to pay the debt
– Third World countries will
get poorer
– Industrialized countries
will be more rich
Strategic implementation of
repayment

Conclusion
– Once offered funds, Third World Countries
will never be out of debt
– Kept in a cycle of repayment
– This binds the less industrialized countries
to ask for more funds
– The process of granting aid should be
slowed down or thrown out
Works Cited


Arnold, G.(1985). Aid and the Third World: The
North/South Divide. London, Great Britain:
Robert Royce Limited.
Danaher, K. (1994). 50 Years is Enough: The
Case Against The World Bank and the
International Monetary Fund. Boston, MA:
South End Press.
Works Cited


Hancock, G. (1989). Lords of Poverty: The freewheeling lifestyles, power, prestige and
corruption of the multi-billion dollar aid
business. London, Great Britain: MacMillan
London Limited.
Herman, E. S. (1995). Triumph of the Market.
Boston, MA: South End Press.