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V. Answer the following questions:

  1. What are the most common features of the LDCs?

  2. What are the barriers to the growth?

  3. What does the labor problem consist of?

  4. What does a lack of capital result in?

  5. Can domestic saving finance the whole of inputs?

202

203

  1. What are the sources of external financing?

  2. What is the difference between loan and foreign aid? ■;-:

  3. What is the role of the market mechanism?

  4. What are the growth strategies?

VI. Define the terms:

debt servicing foreign aid

market shortage infrastructure

nonmarket prices subsistence level

market mechanism GNP per capita

foreign investment loan

VII. Translate info English:

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VIII. Read and dramatize the following dialogue:

A.: Most countries continue to experience economic growth. But the relationship between GNP growth is very different in rich and poor countries.

B.: What are the differences?

A.: The populations of rich countries are growing very slowly and gains in per capita GNP are easily achieved. In the poorest countries, population is increasing rapidly, making it difficult to raise living standards.

8.; Which countries are rich and which are poor?

A.: Rich countries are the United States, Sweden, Japan and Germany. Peru, Nigeria, Thailand, Honduras, Egypt, Phili­ppines are poor countries, and Pakistan, Kenya, China, Haiti, India, Ephiopia are the poorest.

B.: What is the reason for that? \

A.; As I have already told, it is low growth. Before growth can accelerate, though, the present barriers to growth must be identified and overcome.

B.: What are the barriers?

A.; Some of the major barriers are lack of labor and capital resources.

8.: As far as I know the World Bank makes loans to LDCs for specific development projects.

A.: Yes, the other multinational banks provide financial and technical assistance.

8.: But a loan requires repayment.

A.; During the 1980s the LDCs nearly doubled their external debt. Annual servicing on these loans exceeded $170 billion.

8.; And then, some of the major debtor nations declared a moratorium on debt repayment.

A.; First Mexico, then Brazil and Peru announced that they were stopping or reducing debt servicing. It gave some of the LDCs some "breathing rooms. They could use this temporary relief to channel more of their export earnings into investment.

8.: Do the United States and other developed countries lose from the debt crises?

A.;The developed (creditor) countries and the developing (debtor) nations had a joint interest in resolving the debt crises. The resolution has included increased exports by developing countries, a reduction in imports of developing countries, greater priority to investment and growth in LDCs, more loans and aid from developed countries.

8.: It's very convenient, isn't it? And beneficial to both parties, I'm sure.

IX. Make up your own dialogue using the following ■expressions:

low incomes .*■ developing countries loans foreign investments

slow growth to raise living standards

to accelerate the growth foreign aid

a lack of capital a lack of trained labor

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