Short Answer Question #1
What comes to mind when you here the term “Third World”? Most of the people in the United States find it hard to come to terms with the life style and struggles that are associated with this term. The term, “Third World” was first introduced during the Cold War. During this time, the “First World” referred to the United States and its’ allies, “Second World” consisted of the Soviet Union and its allies and the “Third World” was associated with the non-allied and neutral countries. After the second world war, these countries, who were mostly new to independence, were left trying to keep up with the fast growing world economy. The countries that couldn’t keep up were in dyer need of foreign involvement to help them develop. Thus, the term Third World ‘development’ was introduced. These underdeveloped countries were categorized by their low per-capita incomes, high illiteracy rates, limited development of industry, agriculture based economies, short life expectancy, and were often unstable politically (class notes).
Plans to help promote development in these “Third World” countries were first conceived at the Bretton Woods conference in 1944. Representatives of 44 countries met in Bretton Woods, N.H to talk about postwar financial arrangements. It was at this meeting that the International Bank for Reconstruction and Development (World Bank) and International Monetary Fund were developed. The World Bank consisted of five divisions the International Bank for Reconstruction and Development (IBRD; its main component), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Center for Settlement of Investment Disputes (ICSID) (answers.com/topic/worldbank). The two main divisions associated with development were the IFC and IDA. The IFC did its part by lending money to private business in developing countries. With fresh capital, the hope was that these businesses would be able to produce goods, which could then be purchased by the countries people and in-turn create a stable economy within the developing country. The purpose of the IDA was to help out the banks poorest countries by providing interest free loans. As seen in the class film “Life and Debt,” Jamaica was able to go to the World Bank and ask for a loan when they’re country was forced to come up with money that wasn’t available. This loan request was most likely handled by the IDA. Another institution that was created was the International Monetary Fund. With more than 180 countries as members, the purpose of the IMF was to help ensure the smooth international buying and selling of currency. The IMF met this requirement by stabilizing currency-exchange rates and by providing advice and technical assistance to its barrowing countries. Member countries do their part by contributing operating funds and receive voting rights based on their involvement in international trade and national income.
There are many terms that are associated with countries that have not reached an industrial state. Developing nations, third world, and global south are some terms that can be used in describing these nations (class notes). Being a country that is labeled by one of these terms can be tough. If you were a developed nation would you want to get involved economically with a country with lifestyle associated with these terms. This is why its it so difficult for the underdeveloped countries to get involved with the world economy because of their reputation and the biased judgment that comes with it. Short Answer Question #2
One of the main indicators of development in a country is its Gross Domestic Product or GDP. Gross Domestic Product is measures the amount of goods and services produced in a specific country or region. GDP has become one of the main statistics used by scholars to measure a...