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The IMF, Global Inequality, & Development Part A Ms. Ramos Alta Loma High School.

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Presentation on theme: "The IMF, Global Inequality, & Development Part A Ms. Ramos Alta Loma High School."— Presentation transcript:

1 The IMF, Global Inequality, & Development Part 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 Prim Prod fall w/o other goods fall Declining Terms of Trade Leads to/ Results in

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 s Low-tech Need to move to high tech –Problem--- need $$$ 3 rd 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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