11.4.4

Financial IGOs

Test yourself

Financial IGOs and the Developing World

Since the 1970s, tougher rules and strict conditions have been applied for large-scale lending, especially for developing countries. These have included the SAP and HIPC schemes:

Illustrative background for SAPsIllustrative background for SAPs ?? "content

SAPs

  • SAP stands for Structural Adjustment Programmes. They are usually made up of loans from the IMF and World Bank.
  • SAPs have made countries that receive lending follow specific routes to development, such as privatisation.
  • Africa Action, an NGO, is critical of SAPs, claiming that the assumption that the market leads to benefits for the rich and poor is flawed.
  • Ghana launched its structural adjustment plan in 1983. The IMF and World Bank say it is one of the most successful SAPs in Africa.
Illustrative background for HIPC schemesIllustrative background for HIPC schemes ?? "content

HIPC schemes

  • HIPC stands for Heavily Indebted Poor Countries. There are 37 nations in this group, including Ghana, Ethiopia, Afghanistan and Senegal.
  • HIPC schemes aim to make sure that no country faces an unmanageable debt burden (amount of debt).
  • Under HIPC schemes, countries must reduce poverty over time and meet other criteria. If they meet all of these criteria, then they may have all their external debt cancelled.
    • Chad achieved this in 2015.
  • Some people argue that SAPs and HIPCs mean the sovereignty of these nations is questionable - are they perhaps neo-colonial?

Regional Trade Blocs

Regional trade blocs are intergovernmental groups that reduce the barriers to trade in their region.

Illustrative background for European UnionIllustrative background for European Union ?? "content

European Union

  • The European Union is a trade bloc made up of 28 European nations (as of 2018).
  • The European Union is the most tightly integrated trade bloc, because it combines common external tariffs, with the free movement of labour and for many nations, a common currency in the Euro.
Illustrative background for NAFTAIllustrative background for NAFTA ?? "content

NAFTA

  • The North American Free Trade Agreement (NAFTA) is a trade bloc made up of the USA, Canada and Mexico.
  • NAFTA supports free trade between its three members. Removing internal quotas and tariffs is the aim of the organisation.
  • NAFTA does not have common external tariffs on nations outside the 'customs union' or 'trade bloc'.
Illustrative background for ASEANIllustrative background for ASEAN ?? "content

ASEAN

  • The Association of Southeast Asian Nations is a trade bloc of 10 Asian countries, including Indonesia, Malaysia, Singapore, the Philippines, Thailand, Brunei, Cambodia, Laos, Myanmar and Vietnam.
Illustrative background for MercosurIllustrative background for Mercosur ?? "content

Mercosur

  • Mercosur is an economic grouping of Argentina, Brazil, Paraguay and Uruguay.
  • It was established by the Treaty of Asuncion in 1991.
  • Mercosur does have an external tariff on goods from outside the trade bloc.
Illustrative background for COMESAIllustrative background for COMESA ?? "content

COMESA

  • COMESA is a grouping of 19 countries in east and southern Africa.
  • Its members include Kenya, Libya, Egypt, Madagascar, Mauritius and Zambia.

Jump to other topics

1Tectonic Processes & Hazards

2Option 2A: Glaciated Landscapes & Change

3Option 2B: Coastal Landscapes & Change

4Globalisation

5Option 4A: Regenerating Places

6Option 4B: Diverse Places

7The Water Cycle & Water Insecurity (A2 only)

8The Carbon Cycle & Energy Security (A2 only)

9Superpowers (A2 only)

10Option 8A: Health & Human Rights (A2 only)

11Option 8B: Migration & Identity (A2 only)

Go student ad image

Unlock your full potential with GoStudent tutoring

  • Affordable 1:1 tutoring from the comfort of your home

  • Tutors are matched to your specific learning needs

  • 30+ school subjects covered

Book a free trial lesson