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How did foreign debt arise?
Evaluation: Borrowing shows an injection of new resources in the domestic economy and also an opportunity for development.
• When borrowed resources are used to raise productive capacity, in that case the loan and interest repayments can be met through economic growth.
• When the loan is used to finance current account deficits in that case there is no net investment as well as future economic growth. Debt is a burden.
What is good governance? Governance is fundamentally another word for government and is a necessary precondition for development. It is how governments employ their authority
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How does colonial background influence the development process? Colonial experience influences: • Language for example the official language of US is English. • Legal and
constraints
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