Key Issues 9.4: Obstacles to Development

In contrast to the international trade approach, the self-sufficiency approach to development:

• begins when an elite group initiates innovative activities.
• results in uneven resource development.
• suffers from market stagnation.
• spreads investment through all sectors of the economy.

Traditional barriers to international investment have included:

• low taxes on imports.
• making domestic goods more expensive.
• requiring licensing for importers.
• elimination of quotas on imports.

In recent years, countries such as India have:

• embraced the international trade approach.
• raised taxes on imports.
• embraced the self-sufficiency approach.
• returned to traditional agricultural methods.

The principal benefit of the self-sufficiency approach is to promote:

• global competitiveness for local industries.
• balanced growth of all economic sectors.
• the maintenance of a large government bureaucracy.
• unequal distribution of resources.

Which of the following is not a characteristic of the Fair Trade Movement?

• Products are made and traded according to the standards intending to protect workers and small businesses in LDCs.
• Cooperatives intend to benefit local farmers and arisans, rather than absentee corporate owners.
• Employers must pay fair wages and comply with environmental and safety standards.
• Protection of workers' rights is a high priority for multinational corporations.

The biggest problem faced by LDCs in financing development is:

• confrontation with MDCs.
• identifying unique economic assets.
• inability to repay loans.
• currency inflation.