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The IMF, Global Inequality, & Development Part A

The IMF, Global Inequality, & Development Part A. Ms. Ramos Alta Loma High School. IMF & the Third World. IMF is criticized for economic & social problems in Third World Issues of trade, inequality, and development with globalization are highly charged. South as sources of Primary Products.

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The IMF, Global Inequality, & Development Part A

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  1. The IMF, Global Inequality, & DevelopmentPart A Ms. Ramos Alta Loma High School

  2. IMF & the Third World • IMF is criticized for economic & social problems in Third World • Issues of trade, inequality, and development with globalization are highly charged

  3. South as sources of Primary Products • Primary Products: raw materials & agriculture • Majority of exports are in 1 sector • Uganda: 98% coffee • Zambia: 89% copper • Ghana: 59% cocoa

  4. Diversified trade can survive slumps in a sector!!! • By late 1950s- economic division of labor & specialization viewed as obstacle to development

  5. Economic Commission on Latin America (ECLA) & Raul Prebish • 2 MAJOR PROBLEMS: • Prices of primary products fluctuate • Instability of income, hard to plan & develop • Price of primary products fall w/o similar fall in price of manufactured goods

  6. Primary product fluctuation Declining Terms of Trade Leads to/ Results in Prim Prod fall w/o other goods fall

  7. Case Study: Zambia 1980s • Copper 89% trade export • Fiber optics replace copper • Copper price fell 80% • Zambia was devastated

  8. Need to reduce PP & shift to manufacturing • Import Substitution: policy to promote economic development • Reduce import to replace w/ domestic product • Govt invests in industry. Infant Industry needs to be protected

  9. Latin Am & Africa 1950-60s • Low-tech • Need to move to high tech • Problem--- need $$$ • 3rd World NEEDS capital from abroad • Multinational corporations • Northern financial institutions

  10. Stagnation in 1970s • Problem: economic growth stalls • Need to repay loans • Prob worsens w/ OPEC • Raise prices 1973 & 1979

  11. Debt Crisis of 1980s • Developing nations unable to pay loans, esp Latin Am • Mexico • Owed A LOT • Debt grows faster than economy • Fear consequence of default w/intl banks

  12. IMF loan • Strings (conditionality): economic policies & reforms • Structural Adjustment Policies: bundle reforms required for IMF loans

  13. Library Activity • Research a country in the region assigned using the CIA Factbook (linked on class website) • Find a country vulnerable to having a PP • ID the country, product/export, what & of export is it?, what is the current price?, any problem with the product in the past 30 yrs?, any foreseeable problems? • Be prepared to share with the class with a visual

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