Development

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These are groups of countries that make agreements to reduce barriers to trade (e.g. to reduce import taxes)- this increases trade between members of the group.

When a poor country joins a trading group, the amount of money the country gets from trading increases-more money means that more development can take place.

However, its not easy for poorer countries that aren't part of trading groups to export goods to countries that are part of trading groups. This reduces the export income of non-trading group countries and slows down their development.

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Aid

Aid is given by one country in the form of money or resources.

The country that gives the aid is called the donor-the one that receives the aid is called the recipient.

There are two main sources of aid from donor countries- governments (paid for by taxes0 and Non governmental Organisations (NGOs, paid for by voluntary donations

There are two different ways donor governments can give aid to recipient countries

Directly to the recipient – bilateral aid

Indirectly through an international organisation that distributes the aid- this is called multilateral aid

Bilateral aid can be tied –this means its given with the condition that the recipient country has to buy the goods and services .This helps the economy of the donor country. However, if the goods and services are expensive in the donor country, the aid doesn’t go as far as it would if they were bought elsewhere.

Aid can be classed as either short term or long term depending on what its used for

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Aid can be classed as either short term or long term depending on what its used for.

Aid has one big disadvantage to donor countries- it costs them money and resources. However one advantage is that the recipient countries become their political allies.

Some recipient countries don’t use aid effectively because they have corrupt governments.

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Long term aid

Constructing schools to improve literacy rates and hospitals to reduce mortality rates.

Building dams and wells to improve clean water supplies.

Providing farming knowledge and equipment to improve agriculture.

Here are some examples of development projects aid is spent on:

International aid donors encourage sustainable development

Sustainable development means developing in a way that doesn’t irreversibly damage the environment or use up resources faster than they can be replaced.

International aid donors encourage sustainable development in a number of ways:

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Reducing global inequality- Case study