Problem
Uncertainty of development programmes due to short-term loans
Nature:
The lack of symmetry between the long-term requirements of development and the short- to medium-term nature of commercial bank external financing places clear obstacles in the way of broad-based socio-economic development. Policy makers can confront the problem in a variety of ways, but in order to illustrate the gravity of the matter for a country that is heavily indebted to commercial banks, policy options can be simplified and reduced basically to two: (a) to focus development strategies on activities with high short-term private commercial rates of return and wait for social development to 'trickle down' to the population; or (b) to seek balanced socio-economic development today and hope that banks will refinance their short maturities. Broader Problems:
Economic uncertaintyLack of long-term development assistanceDifficulty of implementing development programmesDeteriorating terms of international financial loans to vulnerable countries Strategies:
Providing loans for urban developmentProviding low-interest loansProviding loans for communicationsProviding loans to fisheriesFinancing energy efficiencyProviding loans for the environmentProviding loans to the transportation sectorProviding loans to agricultureProviding loans for planning and reformProviding preinvestment loansProviding loans for educationProviding loans to industry/miningProviding loans for tourismProviding loans for export financingProviding loans for national institutional changeFinancing science and technology for developmentSecuring short term loansProviding loansCriticizing short range planning for long-term development Subject(s):
Commerce → CreditDevelopment → Development
Related UN Sustainable Development Goals:
Problem Type:
F: Fuzzy exceptional problems Date of last update
04.10.2020 – 22:48 CEST