Development: Key Issue 4
Why Do Less Developed Countries Face Obstacles to Development?
Rubenstein, pp. 294-301
1. Complete the table below with notes from the text on two different models of development.
APPROACHES TO ECONOMIC DEVELOPMENT
Self-Sufficiency Model
International Trade Approach
Problems & Criticisms
Elements
(Rostow’s Development Model)
Case Studies
India
Four Asian Dragons
Arabian Peninsula States
2. Which of the two models for development has shown the most success?
World Trade Organization
3. Mark each of the following statements, regarding the WTO, as true or false. If false, make
them true.
___(a) The WTO was formed by countries which conduct the majority of international trade.
___(b) The WTO seeks to increase import quotas and reduce import and export tariffs.
___(c) Though it can hear accusations, the WTO cannot order remedies.
___(d) The WTO seeks to eliminate restrictions on the flow of money between countries.
3b. Why have each of the following groups been critical of the WTO?
i. Liberals (Progressive):
ii. Conservatives:
Foreign Direct Investment
4. What is foreign direct investment?
5. The flow of money in transnational corporations is not balanced. This is true in TWO ways. Explain.
6. What is a transnational corporation?
7. List the 5 countries in which most transnational corporations are headquartered? [Figure 9-30]
a.
b.
c.
d.
e.
● FINANCING DEVELOPMENT
8. What are the two principal ways in which LDCs obtain money to finance development?
a.
b.
Loans
9. Identify the two main sources, both controlled by MDCs, of loans for LDCs.
a.
b.
10. What is the THEORY behind using loans for infrastructure projects in LDCs?
11. In PRACTICE, what has usually happened when loans have been used for these
infrastructure projects? Why do these projects fail?
12. What are structural adjustment programs?
13. Why do LDCs enact structural adjustment programs, even though they may be unpopular
with the citizens of their countries?
● FAIR TRADE
14. What does “fair trade” mean?
15. How does fair trade benefit producers?
16. How does fair trade benefit the workers?
On the map, shade in RED the five countries in which most transnational corporations are headquartered. In
BLUE, shade the 11 or 12 countries which have received the bulk of the money from transnationals.
**Draw the Brandt Line on the map.