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Data Processing and Analysis Guide

Poorer countries face devastating impacts from preconditions imposed by developed nations, leading to increased dependency and economic instability. They are forced to export more to pay off debts, resulting in a race to the bottom that decreases labor value and causes social unrest. This cycle is exacerbated by currency stabilization measures that can lead to economic collapse, as seen in past financial crises.

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Manjur Hossain Shovon
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11 views1 page

Data Processing and Analysis Guide

Poorer countries face devastating impacts from preconditions imposed by developed nations, leading to increased dependency and economic instability. They are forced to export more to pay off debts, resulting in a race to the bottom that decreases labor value and causes social unrest. This cycle is exacerbated by currency stabilization measures that can lead to economic collapse, as seen in past financial crises.

Uploaded by

Manjur Hossain Shovon
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

The impact of these preconditions on poorer countries can be devastating.

Factors such as the following lead to further misery for the developing nations and keep them dependent on developed nations:
y y

y y

y y

Poor countries must export more in order to raise enough money to pay off their debts in a timely manner. Because there are so many nations being asked or forced into the global market place before they are economically and socially stable and readyand told to concentrate on similar cash crops and commodities as others, the situation resembles a large-scale price war. Then, the resources from the poorer regions become even cheaper, which favors consumers in the West. Governments then need to increase exports just to keep their currencies stable (which may not be sustainable, either) and earn foreign exchange with which to help pay off debts. Governments therefore must: o spend less o reduce consumption o remove or decrease financial regulations o and so on. Over time then: o the value of labor decreases o capital flows become more volatile o a spiraling race to the bottom then begins, which generates o social unrest, which in turn leads to IMF riots and protests around the world These nations are then told to peg their currencies to the dollar. But keeping the exchange rate stable is costly due to measures such as increased interest rates. Investors obviously concerned about their assets and interests can then pull out very easily if things get tough o In the worst cases, capital flight can lead to economic collapse, such as we saw in the Asian/global financial crises of 1997/98/99, or in Mexico, Brazil, and many other places. During and after a crisis, the mainstream media and free trade economists lay the blame on emerging markets and their governments restrictive or inefficient policies, crony capitalism, etc., which is a cruel irony. When IMF donors keep the exchange rates in their favor, it often means that the poor nations remain poor, or get even poorer. Even the 1997/98/99 global financial crisis can be partly blamed on structural adjustment and early, overly aggressive deregulation for emerging economies. Millions of children end up dying each year.

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