Adverse economic shocks from external factors
Other Names: Exogenous economic conditions hindering development
Nature: All countries, but particularly developing ones, are vulnerable to violent disturbances in world, regional or bilateral economic relations and conditions. Import costs and export earnings vary unfavourably with exchange rate fluctuations, the volume of trade is negatively impacted by recession, and world interest rates and inflation may be susceptible to erratic but persistent increases. Other foreign constraints on domestic conditions are oil price increases and disturbances due to wars or hostile actions. The inadequacies of developing countries' reserves are apparent when externally caused crises emerge.
Claim: The reasons for the difficulties of some countries are not purely endogenous, but, in large measure exogenous. Poor countries cannot prosper because the odds are clearly stacked against them. The international environment in which they must operate is not conducive to their success. Because of the protectionist measures, many are effectively precluded from any significant participation in the world trading system. At the same time, the poor, low- and middle-income countries are overburdened by debt and denied the financial assistance which they need to escape from their prisons of poverty.
Problem Type: F: Fuzzy exceptional problems
Date of last update 01.01.2000 – 00:00 CET