• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Economics LDC Types of Aid

Extracts from this document...

Introduction

ESSAY HIGHER ECONOMICS LEVEL: Explain the key issues in relation to the developing nations in Relation to Aid and Trade in terms of achieving Growth and Development Economic Growth occurs where there is an increase in the productive potential of the economy and is best calculated by the boost in a country's real level of output over a period of time. All in all generating economic growth rests on the basis of resources and the importance of the quantity and quality of the factors of production: land, labour, capital. A developing country is a country often with characteristics tending to be; dependency on primary products, low per capita incomes, high incidence of poverty, low levels of human capital (education, health, nutrition) and weak economy associates. Due to this they often they lack the enticement to undergo structural change and consequently, economic growth. Derisory markets and in appropriate intervention, are other credible reasons why Lower Economically Developed countries, do not succeed to expand economically. Apposite policies and strategies have been developed to explain the process of economic development. In a broad continuum, one can divide these into two imperative factors; integral (inward) and peripheral (outward) oriented strategies. The Harrod-Domar model lays emphasis on the importance of savings and efficiency. It "identifies the rate of growth for an economy through time that allows savings-investment equilibrium to be reached."1 Without savings, capital accumulation is not possible, so the higher the savings are, the higher the potential growth rate is. ...read more.

Middle

These are very small amount of money, as little as 1$ a day handed directly to those in need by an NGO (Non-Governmental organization) and reflects the circumstance in which the recipient is in. In some areas micro-credit schemes are addressing the financial needs of the deprived. The Grameen Bank is the best known example of a micro-credit scheme organization. Development can also create a dual economy. Signifying that one section is the continuing economy where wages are low, and the other section is the newly industrialising one, where firms invest capital. This could also lead to volatility in the market, growing dissatisfaction and widening gaps of inequality. This issue is apparent in China for example where, "the government is concerned about growing rural unrest as the hundreds of millions of rural poor are left behind in Chinas surging economy."5 "There is a sense that if they continue to grow they could pose a major threat to Chinese stability." In terms of economics however, the existence of the first plays an important role in supplying the pool of labour. The industrialising one can operate effectively, as it is perfectly elastic in terms of supply. The successful expansion of the industrial sector will propagate a duo-economy. The negate factor can be, the ability for an LDC to acclimatize at once, which may considerably increase a dual economy. ...read more.

Conclusion

A blend of low prices and income elasticity of demands of demand for primary goods and the propensity to save raw materials as technology improves elsewhere. Fair trade organization exists "who guarantee farmers and producers a 'fair' price for the goods they produce."8 This generates an extent of price growth and development, which can then, take place at a more consistent level. The final, arguably the most essential aspect of aid, is the concept of sustainable development9. This means that they are attempting to grow today without damaging the prospects for development for future generations tomorrow. Some doubt if this is really possible but to achieve it means investing more in such courses of action as: * Recycling * Using alternative methods and resources to generate power etc * Watching our biodiversity * Admitting to both social costs and benefits and accepting that someone has to pay the true cost of resource allocation. Source: Triplea Purely said, economic growth and development is of the essence, a fundamental and an imperative aspect for every developing nation, because after all when it comes down to the basics of economics, "growth is good", and is treated as the stepping stone as a set view of growth and development throughout multinational economies. But in relation to developing countries one must not disregard they're current status and the structure of the economy. Adopting these new schemes might not be appropriate and often these countries are furthermore weighed down by the lack of legal framework. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Extended Essay Economics

    Let's say a firm sells 2,000,000 Bs. worth of goods. These must then be changed into US dollars to pay for the firms costs. Now the Venezuelan seller will have to convert their Bolivares into US Dollars on the parallel market. Manpa, on the other hand, is a publically owned paper manufacturer in Venezuela.

  2. World Economics assignment. The core economic issues that are focused on in this ...

    causality analysis, the failure to provide meaningful disclosure documents and a continuous disregard of arguments presented by EC exporters and the EC. Following the consultations held in February 2004, India opened a review process which has led to the termination of most of the contested measures, including those of most economic interest for EC exporters (steel and pharmaceutical products)(14)."

  1. Extended Essay

    and the policies which were taken on in an attempt to decrease the deficit lead to higher inflation11 (in 2007 CPI reached 6.7%) and low growth12 rate (in 2007 real GDP grew by 1.8%) (OECD, 2008). Along with these measures the government began the reform-process in the gas market and

  2. Allocation of Resources

    And all these effects will take place dynamically and automatically. It also works as a balancing mechanism. For example, the inhabitants of a poor country will be willing to work very cheaply. Capitalists can make great profits by building factories in poor countries.

  1. An Investigation of Vietnam's Barriers of Economic Growth and Development

    of the economy and diminishing the bureaucratic nature of commerce in Vietnam. However it is unlikely that the Communist leaders will allow this to happen. Additionally, Vietnam relies heavily on SOEs to generate wealth for the nation. Under each company, workers enjoy the same share of benefits from growth despite any disparity in productivity.

  2. What is Economics? What do Economists do?

    It also includes external cost (opp cost is borne by other people). For example, if the person next to you decided to take his shoes off and has a smelly feet, you bear part of the cost. � It is not the value of all the choices (you could not

  1. Growth and Development Problem Set - IB Economics exam questions and answers.

    However, the lack of infrastructure is an obstacle to growth and development for developing countries in attempting to increase their growth rates. Most developing countries perform poorly with respect to infrastructure development and provision, and that the contributions of investments in infrastructure to growth and development have fallen short of expectations.

  2. The Benefits of Microcredit to Bangladesh

    The micro-finance sector in Bangladesh is one of the worlds largest. Bangladeshi MFIs are best known for their groundbreaking, large-scale provision of microfinance services, principally tiny collateral-free loans to poor women. Microcredit programs in Bangladesh are implemented by NGOs, Grameen Bank, state-owned commercial banks, private commercial banks, and specialized programs of some ministries of Bangladesh government.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work