Question

Manyoftheunderdevelopedcountrieswillpromotethegrowthoftheir

economiesinonewayortheother,nomatterwhethertheyreceivesubstantial

outsideaidintheprocessornot.Thecharacterofthatdevelopment,however,

islikelytobestronglyinfluencedbythetypesofandamountsofaidavailable.

Theoutcomeismuchmorelikelytobefavourable,fromthestandpointofthe

objectivesforsuccessfuldevelopmentsetuppreviously,ifthereissubstantial

internationalaidthanifthereisnot.

II. BysubstantialaidImeannotonlylargeamountsoftechnicalassistancebut

alsoofcapital.Initially,thecapacityofanunderdevelopedcountrytouse

capitalproductivelymaybesurprisinglysmall,limitedbylackoforganisation,

trainedpersonnelandothersocialobstacles.Atthisstagetechnical

assistanceisthemainneedfromoutside,withcomparativelysmallamounts

ofcapital,muchofwhichmayhavetobeintheformofgrantsfornon-self

liquidatingprojects,ineducation,health,accesstoroadsinruralareas,and

thelike,if,atthisstage,substantialcapitalisavailablefromoutsideto

supplementwhatcanbeformedinternally(andtosimulateinternalcapital

formation,foritdoesthattoo)therateofeconomicgrowthcanbe

consistentlyincreased,andthestrainsandfrustrationsandpoliticalrisksof

thedevelopmentarelikelytobeconsiderablyless.

III. Itispossibleforunderdevelopedeconomiestomodernisethemselveswith

verylittlecapitalfromoutside.Japanimportsofcapitalweresmallthough

someofitcameatcrucialtimes.Thecontributionofforeigndirect

investmentstotheadvancementoftechnicalknow-howalsowasgreaterthan

wouldbeindicatedmerelybythesizeoftheinvestment.TheSovietUnion

industrialiseditseconomywithpracticallynoaidfromforeigninvestment

capitalexceptfortheforeignownedinstallationsconfiscatedafterthe

revolution,thoughitimportedmachineryintheearlydaysonshortterimmediatetermcreditsandhiredservicesofforeignexperts.

IV. BothJapanandRussiaachievedtheirdevelopmentinanauthoritarian

politicalandsocialframework.Theoutcomeinbothcasesfromstandpointof

thepeaceintheworldanddemocraticideals,washighlyunfavourable.

V. Intheabsenceofoutsideaid,theonlywaytoaccumulatecapital,isto

increaseproductionwithouttakingmuchofthebenefitinmoreconsumption

orevenwhilepushingconsumptionstandardsdown.Wherethepeopleare

alreadynearthesubsistencelevelthismaymeanextremehardship.

Somehowthepeoplemustbemotivatedtochangetheiraccustomedways

quickly,toworkhardandtoforgopresentconsumptionsothatcapital

investmentcanbemade. Questions:

A.Choosethemostappropriateoption: (1x4=4

marks)

(a)Thepassagesaysthat…………………….

i. withoutforeignaidnounderdevelopedcountrycangrow.

ii. underdevelopedcountrymustrefrainfromtakingforeignaid.

iii. theeconomiesoftheunderdevelopedcountriesaremorelikelytogrowfaster

withsubstantialforeignaidthanwithout.

iv. underdevelopedcountriesareeconomicallybackwardbecausetheir

governmentshavenotgottheirprioritiesright.

(b)Substantialaidinthiscontextmeans…………………….

i. technicalassistanceintheformoftrainedpersonnel.

ii. capitalintheformofbankloansandoverdrafts.

iii. largeamountsoftechnicalassistanceandcapital.

iv. acheapandplentifulsupplyoflabour.

(c)Whichofthefollowingpointsorstatementsdidthewriteractuallymake?

i. JapanandRussiaachievedtheirdevelopmentinademocraticframework.

ii. JapanandRussiaachievedtheirdevelopmentinanauthoritarianpoliticaland

socialframework.JapanandRussiawouldhavedevelopedfasteriftheyhadreliedon

democraticmethods.

iv. JapanandRussiaarestillamongtheunderdevelopedcountriesoftheworld.

(d)Accumulationofcapitalwithoutgettingoutsideandmaymean

i. extremehardship

ii. moreinvestment

iii. highlivingstandard

iv. lowlivingstandard

B.Answerthefollowingquestionsbriefly: (1x4=4

marks)

(a)Howdoestheavailabilityofsubstantialcapitalhelp?

(b)Howcananationaccumulatecapitalifitdoesnotgetoutsideaid?

(c)HowdidJapanandRussiabecomedeveloped?

(d)Whatproblemsdoesanunderdevelopedcountryface?

C.Findwordsinthepassagesimilarinmeaningas: (1x2=

2marks)

(a)substantial

(b)aid​

Answer 1

Answer:

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Explanation:

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