Key words

Aid

Aid is money given to poor countries by rich countries to help them solve problems of poverty. Very often aid is only given on very strict conditions about what can be done with the money. Sometimes it has to be spent on buying goods from the rich country that gave it. There is a United Nations target that each of the rich countries should give 0.7 per cent of their income (less than one penny in every pound) to the poor countries in aid. No rich country has reached this target. Britain gives less than 0.3 per cent.

Average Income

If the total amount of income earned in a country in a period of one year is divided by the total population of the country, that is the average income per head, per year. In fact most countries have some very rich people who receive much more than the average, and many poor people who receive a lot less.

Currency Devaluation

Every country has its own currency (money). In Britain we have the pound, America has the dollar, South Africa has the rand. When countries sell things to each other it is important to know how much one currency is worth in terms of another. For example £1.00 is approximately equal to $1.40 at the moment. The values of currencies change for various reasons. If a currency falls in value compared to another we say the currency has devalued. When a currency devalues it has the effect of making that country's exports cheaper, and its imports more expensive.

Deforestation

Many years ago most of the Earth's surface was covered with forest. Today most of that forest is gone, and the speed at which the forest is being cut down is accelerating. This process is known as deforestation. Deforestation is an important issue for many reasons, including the fact that trees help to reduce the problem of global warming.

Export

When a country sells its products to another country, it is said to be exporting those products. Exports are important to earn other countries currencies, with which to buy imports.

G7

The G7 (or group of seven) is the name given to the seven richest countries in the world, who meet every year to discuss the world economic and financial situation. The seven countries are Canada, France, Italy, Germany, Japan, the United Kingdom and the United States of America.

Highly Indebted Poor Country (HIPC)

Forty-one of the world's poorest countries are so heavily in debt, and suffering so many problems because of this, that they have been officially recognised by international bodies such as the United Nations and the International Monetary Fund as Highly Indebted Poor Countries (HIPCs). HIPCs may qualify for extra help to try to solve their debt problems.

Illiterate

A person who cannot read and write is said to be illiterate. For most types of job some ability to read and write is essential, and illiterate people will find it very difficult to find work and are therefore likely to be poor.

Import

When a country buys products from another country it is said to be importing those products. Countries tend to import products that they cannot produce themselves, or that other countries can produce at better quality or at cheaper prices.

International Monetary Fund (IMF)

The IMF is an international body that exists to lend money to the governments of countries that fall into financial and economic difficulties, to help solve those problems. In order to be given a loan the governments have to agree to very strict conditions, known as Structural Adjustment Programmes.

Interest

If you borrow money from a bank you will have to pay back the money plus a fee for borrowing it. This fee is known as interest. Interest is normally calculated as a percentage of the amount borrowed. Similarly, someone who lends money to a bank can be expected to be paid interest.

Life expectancy

The average number of years that people live in a given country. In most rich countries, people live for over 70 years on average. (Some will die younger, and some will live longer). In many of the worlds poorest countries, life expectancy can be as low as 40 years due to poverty related illnesses.

Poverty

Poverty means being poor. Poverty is a very complicated subject. There are different forms of poverty. It is useful to separate two basic types; absolute poverty and relative poverty. A person who is in absolute poverty is barely able to exist, has only just enough food and drink to survive. If a person remains in this state for very long then they are unlikely to live. Many millions of people in the poorest countries in the world are in absolute poverty. A person who is in relative poverty is considered poor compared to the standards of living that are normal for the country in which they live. For example people in Britain who cannot afford a TV set and a fridge, who perhaps cannot afford to keep their homes warm in winter are poor compared to, or relative to, other people in Britain. However, provided they have enough money to feed, clothe and house themselves properly - and are not at risk of losing their lives because of poverty - they are not absolutely poor.

Recession

A recession is a period of time in which a country (or many countries) experiences severe economic difficulties. During a recession incomes and spending fall, and unemployment increases.

Sickness Benefit

In most rich countries, if people are unable to work because of illness, they are entitled to some payment of money from the government or their employer until they are able to work again. This is known as sickness benefit. Most poor countries have no form of sickness benefit.

Structural Adjustment Programme

If an indebted country receives a loan from the International Monetary Fund, it is expected to undertake a Structural Adjustment Programme (SAP), designed to ensure that it can pay off its debts. A SAP involves cutting government spending on things like health and education and devaluing the currency and producing goods mainly for export.

Sub Saharan Africa

The area of Africa south of the Sahara desert is known as Sub Saharan Africa. This area contains many of the world's poorest and most heavily indebted countries.

Sustainable

There is great concern in the world about whether the way we live our lives is sustainable (can be carried on in the long-term future). For example, we are cutting down the worlds trees - for fuel, to clear land for farming, to make furniture and so on - but if we carry on at the present rate then there may soon be no trees left. Many of our current practices in areas such as energy use, agriculture and mineral exploitation are thought by many to be unsustainable. The question of sustainability is a global problem.

Unemployment

When people are unable to find a job they are said to be unemployed. In Britain and other rich countries if people are unemployed they may be entitled to unemployment benefits. These benefits will be just enough to enable them to live adequately, but unemployed people will be relatively poor. However, in poor countries there are no such benefits and the unemployed may not be able to afford food, clothing and shelter, and therefore suffer absolute poverty.

Unemployment Benefit

Unemployment benefit is money paid to people who are unemployed so that they are able to feed and clothe and house themselves. Most of the rich countries have some form of unemployment benefit, but poor countries cannot afford it.

World Debt

Most countries borrow money from other countries, from international institutions like the IMF, or from banks at some stage. This is not a problem when countries can afford to repay the debt. However, many of the worlds poorest countries have become so heavily in debt that there is no realistic prospect of them ever being able to repay the money, and because of the debts many people in those countries are living in extreme poverty.