Relationship between countries
Introduced| English | Meaning |
|---|---|
| aid/eɪd/ | Resources or assistance supplied to support people, governments or organisations, often for development or relief. |
| debt/det/ | An obligation to repay money or other resources owed to another party. |
| dependence/dɪˈpendəns/ | dependence |
| foreign direct investment/ˈfɒrən daɪˈrekt ɪnˈvestmənt/ | Investment that establishes a lasting ownership interest and significant influence in a business in another country. |
| multinationals/ˌmʌltɪˈnæʃənlz/ | multinationals |
| tied aid/taɪd eɪd/ | tied aid |
How countries help — and hinder — each other
- No economy develops alone. Trade, aid 援助, debt 债务 and foreign investment all link rich and poor countries, for better and worse.
- These relationships can speed development — or entrench dependence 依赖.
Economics case lab
Classify real examples by the economic idea they show.
Foreign direct investment by multinationals can bring a developing country:
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FDI brings capital, employment and know-how — though profits may flow abroad.
Trade and investment
- Trade lets developing countries specialise and earn foreign exchange — but reliance on a few primary exports is risky.
- Foreign direct investment 外国直接投资 (FDI) by multinationals 跨国公司 brings capital, jobs and technology — but profits may flow abroad and bargaining power is uneven.
Countries trade, invest and lend across borders — global trade through a container port
A drawback of aid is that it can:
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Aid can foster dependence and may be "tied" to the donor's interests.
High debt repayments can divert a developing country's money away from health and education.
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Servicing large debts crowds out spending on development priorities.
Aid that must be spent on the donor's own goods is called ______ aid.
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Tied aid benefits the donor and limits the recipient's choice.
Aid and debt
- Aid (grants and loans) can fund investment and relief — but can create dependence or come with strings attached.
- Debt can finance development, but high repayments can trap a country, diverting money from health and education.
Tied aid 附带条件援助. Aid that must be spent on the donor's goods/services ("tied aid") helps the donor's firms and limits the recipient's choice — less effective than untied aid.
Match each relationship to a benefit or risk.
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Each link is double-edged depending on its terms.
The balance
- These relationships are double-edged: trade, FDI, aid and borrowing can all accelerate development or deepen dependence, depending on the terms.
You've got it
- trade and FDI (multinationals) bring exchange, capital, jobs and tech — but with risks
- aid can fund development but risks dependence; debt can finance or trap a country
- each relationship is double-edged — the terms decide whether it helps or hinders
Write from debt equal to 4 times exports
- External debt is 80 billion.
- Annual export revenue is 20 billion.
How many years of export revenue equal the debt?
Debt divided by yearly exports measures the repayment load.
How does the debt compare with one year of exports?
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80 divided by 20 is 4.