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Examine the part that national debt and global trade patterns play in the continuing cycle of poverty in many countries. - Leaving Cert Geography - Question 14 - 2007
Question 14
Examine the part that national debt and global trade patterns play in the continuing cycle of poverty in many countries.
Worked Solution & Example Answer:Examine the part that national debt and global trade patterns play in the continuing cycle of poverty in many countries. - Leaving Cert Geography - Question 14 - 2007
Step 1
Identify the Role of National Debt
Answer
National debt often limits a country's ability to invest in critical infrastructure and social programs. Higher debt levels lead to significant portions of national budgets being allocated to interest payments, which can hinder development initiatives. Furthermore, countries with high national debt may be forced to prioritize austerity measures that exacerbate poverty, leading to a cycle where the lack of investment in human capital perpetuates poverty.
Step 2
Explore Global Trade Patterns
Answer
Global trade patterns frequently favor wealthier nations, creating an uneven playing field for poorer countries. This often results in terms of trade that disadvantage developing countries, where they export raw materials at low prices while importing higher-value goods. Such trade dynamics can impede economic growth in impoverished nations, reinforcing the cycle of poverty.
Step 3
Analyze the Interaction Between Debt and Trade
Answer
The interrelation between national debt and global trade patterns can further entrench poverty. For instance, a country reliant on foreign loans might have to agree to trade policies that favor lenders over local interests. This dependence can lead to economic policies that prioritize debt repayment over development objectives, further deepening the cycle of poverty.