Final Exam Review, Q. 1-5

1. Offshore banks, located outside the country of residence of the depositor, in a low tax jurisdiction/tax haven.

2. Offshore banks are convenient for transnational corporations:
a) greater privacy
b) low or no taxation
c) easy access to deposits, less regulation of deposits
d) protection against local or political instability

3. The Cayman Islands, Dutch West Indies, and other pacific islands are used to launder money for the U.S. government and multinational corporations. As a result, individual taxpayers have to bear the burden for Social Security,taxes are not levied at North American or European rates. Nonexistent taxes in Panema and Liberia. Profits fell on paper, not in actuality.

4. 3rd World governments considered private bank loans as an attractive way of financing their economic efforts because they had no alternative means of development.

5. Banks were not careful about monitoring what loans were used for because financial liberalization eased the cross-border movement of money. p. 118

Class 01/28/2009

• social rights: because you are a citizen, somebody will give you a place to live, food to eat
  
• civil rights: rights to free-speech
  

• racial doctrine: unsophisticated "colonized"
  
• white man's burden, ruling over other people
• colonizers received the raw materials from the colonies

Consequences Of Colonialism:

cultural inferiority complex
a. advanced state of discouragement, embedded in one's lifestyle
b. cultural cringe: the belief that one's culture is inferior to others
c. embarassment about colonial roots

denial of citizenship: lack of political rights
a. freedom of religion
b. freedom of the press
c. freedom of assembly
d. freedom to own guns (USA)
e. protection for those accused of crimes

wealth was funneled out, not reinvested in a way that would improve living
standards
a. Leopald II example: funneled wealth away from the Congo
b. Leopald ran the Congo as a personal fiefdom, extracted wealth from Congo
c. built the Royal Palace in Brussels, fascade built after 1900,

-extreme social disorganization

-artificial territories

-racial doctrines

-compradore classes

-depletion of natural resources

-"underdeveloped"

-meet some basic human needs

-recover some traditions

-own currency

-sovereignty

-means/military support

-job creation

-education/skill

-stable and self sustaining economy

-land reform, self sufficiency for food

-equal rights, end slavery

-national identity

-bring manufacturing

-get rid of middle men

-language

-basic health care

Teacher's lecture:

• Western culture is superior
• socio-psychological implications
• a lot of infrastructure was implemented, to take product from place of production to market
• rail was installed for export-uses
• didn't meet the population's needs
• essentially a dictatorship
  
• military conflict, not a wise use of financial resources
• economic dependencies
• problem: nations need manufacturing capacity & skilled labor
• point of colonialism, not to empower the colonized! Obvious!
• environmental policy according to national boundaries, ineffective. Environmental problems need to be dealt with a new way.

Development States

• living standards
• strong role for the government to manage economic growth
• internal division of labor/inner-oriented industrialization
• centralized economic operations
• 1. skilled workers but cheap-high return on investment, makes your product cheaper/more competitive
  
• 2. identify products you can produce internally, master, and export
• 3. push, development alliance
• 4. you want to be exporting automobiles, not bananas
• 5. land reform, by creating property owners, socialism is less attractive.
• small domestic market, highly motivated to transfer into exports
• Phases: ISI, begin exporting/be competitive
• easy access "booty call?"