FINANCING DEVELOPMENT THROUGHOUT THE WORLD OBJ: TO UNDERSTAND THE CHALLENGES & OPPORTUNITIES OF FINANCING DEVELOPMENT & WHAT NON-TRADITIONAL OPTIONS ARE AVAILABLE FOR DEVELOPMENT

2 MAIN SOURCES OF FINANCING FOREIGN DIRECT INVESTMENT FDI: INVESTMENT MADE BY FOREIGN COMPANIES INTO THE ECONOMY OF ANOTHER COUNTRY UNEVEN DISTRIBUTION OF INVESTMENT ROLE OF TRANSNATIONAL CORPS. LOANS: WORLD BANK & IMF WB: INTERNATIONAL BANK FOR RECONSTRUCTION & DEVEL- OPMENT FOR INFRASTRUCTURE IDA – LOANS TO POOREST WHO DON’T QUALIFY FOR IBRD LOANS MOST PROJECTS FAIL – WHY? IMF: LOANS TO STABILIZE COUNTRIES’ ECONOMY NO SPECIFIC PROJECTS FUNDED THROUGH MEMBERS MICROFINANCE: –GRAMEEN BANK –KIVA LOANS –MANY OTHERS

CHALLENGES FINANCING DEVELOPING NATIONS STRUCTURAL ADJUSTMENT PROGRAM DEBT RELIEF SPEND ONLY WHAT YOU CAN AFFORD LESS $ TO MILITARY & MORE $ HEALTH & EDUCATION POOR BENEFIT TOO INVEST WHERE THERE’S BEST IMPACT ENCOURAGE PRIVATE SECTOR REFORM WITHIN GOVERNMENT BUT….CRITICS CUT SPENDING WHEN IT’S NEEDED THE MOST – RETIREMENT, PENSIONS, POOR AID UNEMPLOYMENT RISES LOSS OF GOVERNMENT JOBS

CHALLENGES FACING DEVELOPED COUNTRIES WEALTH GAP: WIDENING IN DEVELOPED COUNTRIES SINCE % (421PPLE) CONTROL OVER 10% WEALTH 2008 HOUSING BUBBLE & SUBSEQUENT RECESSION CRUSHED DEVELOPED COUNTRIES

STIMULUS SPEND MORE MONEY TO JUMPSTART THE ECONOMY AUSTERITIY CUT GOVERNMENT SPENDING & CUT TAXES TO ENCOURAGE PRIVATE SECTOR

FAIR TRADE FAIR TRADE: COMMERCE OF PRODUCTS MADE & TRADED ACCORDING TO STANDARDS THAT PROTECT WORKERS, SMALL BUSINESSES IN DEVELOPING COUNTRIES LARGEST FAIR TRADE ORGANIZAITON IN N. AMERICA TEXTILES, HANDICRAFTS, JEWELRY EUROPEAN FAIR TRADE: MOSTLY FOOD WORKER & PRODUCER STANDARDS & PROTECTIONS MORE SUSTAINABLE

DRAW THIS DEPENDENCY THEORY – CORE BENEFITS AT THE EXPENSE OF THE PERIPHERY