Article published: Nov 6, 2019
IB Economics syllabus: Development economics (foreign aid, humanitarian aid)
A very unfortunate real-world example of when economic growth does not lead to economic development: Venezuela, which used to be the richest Latin American country is now having millions in abolute poverty, and the situation is worsening: “Most Venezuelans have been affected by a years-long political and economic crisis in what was formerly Latin America’s wealthiest nation, leading to a major shrinking of the economy, fueled by hyperinflation.” It can also be seen though, how economic recession leads to lower living standards in a country, where “[m]illions cannot afford the bare minimum of food, water, and health care” said UN Emergency Relief Coordinator Mark Lowcock.
This is also a useful example of a country stuck in a poverty trap where external help ()in the form of humanitarian aid) is absolutely vital in order to reduce “the immediate suffering of the people of this country.”
Source of image: OCHA/Gema Cortes
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