Ch.

10 Development
Key Issue 3: Why Do Countries Face Challenges to Development? P 368-375

1. What 2 fundamental obstacles do developing countries face when trying to encourage rapid
development?

 2 Paths to Development:

2. Self-Sufficiency Path:
a. In this model, what do countries encourage and discourage?
b. Discuss how countries do the following:
i. Barriers limiting the import of goods from other places:

ii. Isolation:

iii. Equal investment:

iv. Equal income and reducing poverty:

c. Case Study: India; discuss India’s examples of limitations on its imports:

3. International Trade Path:

a. When did international trade become the more popular form path of development?
b. What does this approach call for? (example?)
c. Describe each stage of the Rostow Model below: (HE IS THE PIONEER ADVOCATE FOR
INTERNATIONAL TRADE)….GET TO KNOW HIM AND HIS MODEL
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
(Traditional (Preconditions for (Takeoff) (Drive to (Age of Mass
Society) Takeoff) Maturity) Consumption)
4. International Trade Examples:
a. What countries make up the “Four Asian Dragons”?
i. Describe how these places were able to promote development?

b. Petroleum-rich Arabian Peninsula States:

i. What countries make up the Arabian Peninsula?
ii. How did they use their natural resource to drive development?

 World Trade
5. Describe the 3 observations of the benefits of the international trade approach, especially for
developing countries:
a. Southern and Eastern Europe and Japan:

b. Abundant supply of natural resources:

c. Remaining competitive globally:

6. How did longtime advocates of the self-sufficiency model (i.e. India) convert to international
trade? (3 ways)

7. How was India’s auto-industry (Maruti) a good example of self-sufficiency in the 1980’s-90’s?

8. What happened to India, after converting to international trade? (GNI, etc.?)

9. What is the World Trade Organization (WTO)?

10. When was it established?
11. What are 2 ways the WTO works to reduce barriers to international trade?

a. How does it accomplish this?

12. What do critics of the WTO say?

 Financing Development
13. What are the 2 primary sources of finance for development?
a. What is Foreign Direct Investment (FDI)?
i. Describe how investment does not flow equally around the world?

ii. What are the major sources of FDI?

iii. What is a transnational corporation?
iv. List the 8 largest in the United States
 b. Loans: What are the 2 major to lenders to developing countries?
i. What is the World Bank?
1. IBRD:
a. Provides loans to whom?
b. Where does its funding come from?
c. Risky?

2. IDA:
a. Provides loans to whom?
b. Where does its funding come from?
c. Risky?
ii. What is the International Monetary Fund (IMF)?
a. Provides loans to whom?
b. Why?
c. Where does its funding come from?
d. How is it different from development banks?

c. List facts about their histories and why the World Bank and IMF developed initially?

d. In what region of the world does most World Bank assistance go?

e. How does borrowing money (for developed countries) to build infrastructure attract
domestic and foreign business to open or expand?

f. In reality, has the World Bank, itself, judged its projects that are funded in Africa to be
successful? Why?

 Development Challenges During Hard Times (Recession of 2008)

14. There are 2 strategies for fighting economic downturns. Describe both strategies below in the
table:
Stimulus Strategy Austerity Strategy

15. Describe how both of these were used in the United States? Europe?

16. What is a structural adjustment program? What are some of their requirements?
17. What do critics of structural adjustment programs argue?

18. Describe Europe’s Sovereign Debt Crisis:

a. How do economic difficulties call into question international trade path?
b. How did adopting the Euro help and hurt?

c. Compare Germany and Greece with regard to the Euro and their financial hardships.

d. Who argues austerity and why?

e. Who argues stimulus and why?

19. What is microfinance or microloans?

a. Grameen Bank:
Ch. 10 Development
Key Issue 4: Why Are Countries Making Progress in Development? P 376-379

1. What is Fair Trade?

2. What does the Fair Trade movement primarily focus on?
3. What are the three sets of standards that distinguish Fair Trade?

4. Fair Trade for Producers:

a. What are some of the goals in Fair Trade for producers?

5. Fair Trade for Workers:

a. What are some of the criticisms of International Trade approach in regards to workers’
rights?

b. What does Fair Trade require?

c. How does a cooperative help workers in Fair Trade?

6. Fair Trade for Consumers:

a. What are some Fair Trade products?
b. What is a cooperative store?
c. What are some of the co-op principles?

7. In what three historical eras has the cooperative movement flourished? Why?

a. Great Depression:

b. 1960’s-70’s:

c. 2000-current:

8. What are the Indicators of progress (HDI) and how have they varied in recent decades?
a. HDI:
i. GNI:
ii. Education:
iii. Life Expectancy: