development

• interventionists strategies

  • development of human capital
  • protectionism
  • managed exchange rates
  • infrastructure
• market orientated strategies

  • privatisation
  • microfinance
  • removal of government subsidies
  • floating exchange rates
• venezuela primary product dependency: dependency of a primary product like rice and cotton
• price volatility: the degree to which the price of a security changes over time.
• prebisch singer hypothesis: prices for commodities have been falling relative to the prices of manufactured goods, making ti increasingly expensive to invest in technology and purchase other finished goods.
• dutch disease is forcing countries and producers to choose between immediate profits and future sustainability
• the resource curse: volatility also contributes to other difficulties faced by developing countries and struggling commodity producers, corrupt, rent seeking, unstable , ineffecient public sector.
• venezuela - oil sales make up 99 percent of export earnings and roughly one-quarter of gross domestic product
• venezuela - hyperinflation - 1950%
• venezuela in spiralling economy - GDP shrank by roughly two thirds between 2014 and 2020 and experts forecast that, as global demand for oil continues.
• microfinance - Grameen bank - enabled two million poor Bangladeshis to start or upgrade their own small businesses. most of these borrowers are virtually landless, and today some 95& of the borrowers are women.
• savings gap - Taiwans saving rate were among the highest ever recorded - 30- 40%
• Taiwan has had active industrial policy systems in place to license exports, control direct foreign investment both to and from Taiwan, and to provide fiscal incentives for investment and credit in priority sectors.
• Claims that an economy's success is due to government industrial policies, rather than the action of the free market, are impossible to fully prove. There is always the danger of corruption and inefficiency when government is excessively involved in the economy
• anti-interventionist economists have gone so far as to argue that Taiwan would have done even better without its industrial policies; part of their contention is that "government failure" is almost always worse than market failure in developing countries.
• Taiwan is a case in which incentives to produce wealth rather than merely to seek a share of existing wealth ("rent-seeking behaviour") are established with solid property rights and not significantly undermined by other policies.
• Foreign-exchange gap: Many developing countries face an imbalance between the inflows and outflows of foreign currencies. A foreign exchange gap occurs when currency outflows persistently exceed currency inflows – making the financing of external debt and capital imports difficult.
• Remittances: are transfers of money across national boundaries by migrant workers.
• Sir Lanka: was hit by an unprecedented financial crisis in 2022 – defaulting on its debts for the first time in its history as it struggles with an economic and political crisis. The immediate cause of the crisis is straightforward – Sri Lanka ran out of foreign reserves. 
• his is reflected in the steady decline in official foreign reserves held by the Central Bank of Sri Lanka, falling from about $8 billion to less than $2 billion. 
• The Sri Lankan currency is “closed”, meaning it isn’t traded outside the country, so foreign exchange transactions must go through the central bank.
• Sri Lankan government is now seeking from the International Monetary Fund is likely to hit people hard, at least initially. Based on past experience, the IMF will want major commitments on government expenditure and other economic indicators before bailing out Sri Lanka
• Burundi remains mired in poverty, with almost three-quarters of its people living below the $2.15 poverty line and the economic growth rate averaging nearly 0% between 2014 and 2018. 
• President Obama declaring the results “not credible.” Yet this seems more credible than the 99% vote share that President Kagame claimed in the 2017 Rwandan election.
• For example, promoting systematic crop diversification and agricultural exports. Both countries have experienced a short boom driven by high coffee prices followed by bust, but Rwanda moved toward higher-value beans and other commodities to diversify its exports.
• The population in Rwanda dropped from over 7 million before the genocide to about 5.6 million in 1995, including many who fled the country. But high population growth and the return of many refugees brought the population to an estimated 8 million people by 2000
• Property rights define the legal ownership and control over resources, both tangible (like land) and intangible (like intellectual property).
• several reasons why property rights are important:

  • promoting urban development
  • reducing corruption
  • environment protection
  • stimulating investment - secure property rights to improve yields
• Female empowerment also leads to opportunities for girls to stay in school longer, and for women to have more earnings opportunities outside the home, indirectly lowering fertility. In 1999, Rwanda implemented reforms that granted women rights to own property
• privatisation: Selling public assets (corporations) to individuals or private business interests.
• Joint ventures: A joint venture occurs when two or more businesses join to pursue a common project.
• Floating exchange rate system: When a country’s currency is determined by the relative supply and demand of other currencies.
• Chile grew at an average per capita GDP rate of 4.1% during 1991-2005, breaking with its past mediocre growth performance of barely 1.5% recorded from its independence (1810) to 1990.
• robust legal framework has also allowed firms in Chile to form joint ventures in capital intensive markets – for example, Chilean miner Mantos Copper has formed a $3.3 billion joint venture with Vancouver- based investment management firm Capstone.
• The fund supports fiscal spending stabilisation by reducing the exposure to global business cycles as well as volatility from changes in copper price. It also provides funding for public education, health, and housing plans.
• Chile also offers us an example of a country that has overcome the fear of floating their currency by reducing balance sheet mismatches, enhancing financial market development, and perhaps paradoxically, improving price stability. 
• Infant industries: A newly established industry, usually protected by a tariff barrier as part of a policy of import-substitution.
• Trade liberalisation: The removal of obstacles to free trade – such as tariffs, quotas, and exchange controls.
• Managed exchange rate: is an exchange rate system that allows a nation's central bank to intervene regularly in foreign exchange markets to change the direction of the currency's float and/or reduce the amount of currency volatility.
• South Korea: In the mid-1950s, South Korea was one of the poorest countries in the world. The country is now classified by the World Bank as a high-income economy, with 2018 Purchasing Power Parity (PPP) income per capita of $40,450.