Tutorial 9 prep notes by WK Nadolna i6195183
Statement 1: The process of globalization over the past decades has been
overwhelmingly beneficial for the economic development of both rich and poor(er)
countries. We should continue to deepen this process by further lowering trade barriers
around the world.

Free trade reduces barriers are therefore allows for faster economic growth, through
expansion of the markets etc., however, only the ones able to access the international
markets will benefit from that.

Globalization may lead to market optimization and result in more job opportunities and
lower prices of consumer goods.

It facilitates cash flows to poor countries giving them development opportunities.

Unfortunately, globalization deepens the global wealth divide, as well as inequalities
between social classes.

Many countries manipulate their currency levels for international trade price advantage,
thus harming other economies.
Statement 2: Western nations should (continue to) bundle foreign aid with requirements
for democratic accountability and “good governance” conditions.

Yes, because only with good institutions and accountability the governments of the
receiving countries can put the funds (Aid) into use properly and ensure that the money
creates real results in improving the conditions of the most vulnerable social classes, instead
of going into elite capture etc.

Supporting “bad” governance and inefficient regimes that are not willing to change may
lead to disturbances in the region as well as international arena, with moreover even further
decreasing the chance of getting help to the most vulnerable groups.
Statement 3: The emergence of China as an important investor and donor has been, and
still is, beneficial for the (economic) development of the countries in Africa and Latin
America that are interacting most intensely with China.

It is, in many countries such as Angola, China invests heavily in the service sector as well as
infrastructure (roads, ports, airports). It allows poor regions to develop on a business level,
instead of becoming reliant on aid.
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Tutorial 9 prep notes by WK Nadolna i6195183

The influence of China is seen as position of power. They wish to control the most important
points of a country and economy, through constructing them or taking partial ownership.

An example of such invasive behavior of China is its activity under the Belt and Road
initiative.
Statement 4: Debt relief has been a successful approach to helping highly indebted
nations in the Global South, and it should be more commonly applied to helping other
(highly) indebted nations going forward.

Yes, as it has been proven to boost entrepreneurial activity in both the debtor and creditor
countries. Furthermore, it has proven to be a successful tool that can be interpreted as
foreign aid.

A counter argument is the fact that it might lead to default-liking behavior. Meaning that
the country will become reliant on debts it cannot repay and will count on debt relief. That
will, therefore, never allow these economies to become fully independent.
Statement 5: While not everything worked out as expected/hoped, the basic thinking
behind the Washington Consensus was sound, and it makes sense for the
organizations involved in developing/promoting this package of reforms and
institutions to build on it and promote an “augmented Washington Consensus”.
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Tutorial 9 prep notes by WK Nadolna i6195183

Those objectives are characteristics of a “perfect “state and economy, however, I
believe all of them are impossible to achieve by any country. However, they can be a
good goal indicator and guidance for countries undergoing rapid changes and wishing to
improve.
Statement 6: Environmental concerns (global warming) imply that we need to
fundamentally change our focus on economic development. In particular, (growth in)
GDP per capita should be deemphasized as goal for developing countries.

GDP per capita is only a reflection of economic growth, not of economic development.
Therefore, economic goals and measures capturing economic activity and state of a
country should be expanded to those also capturing social development, institutions,
and level of sustainability etc.

GDP per capita should no longer be a sole indicator and comparison tool, but it is still
important as without economic growth it will be difficult to make sustainable
adjustments.
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