Glossary of Terms

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Acronyms & Abbreviations

ACP - African, Caribbean and Pacific countries
BWI - Bretton Woods Institutions (IMF and World Bank)
CAP - Common Agricultural Policy
CARICOM - Caribbean Community and Common Market
DANIDA - Danish International Development Agency
DfID - Department for International Development (UK)
DTI - Department of Trade and Industry
EITI - Extractive Industries Transparency Initiative
EPAs - Economic Partnership Agreements
EU - European Union
FCO - Foreign and Commonwealth Office
GATS - General Agreement on Trade in Services
GDP - Gross Domestic Product
G8 - Group of Eight
HIPC - Heavily Indebted Poor Countries
IDA - International Development Association (of the World Bank)
IDB - Inter-American Development Bank
ILO - International Labour Organisation
IMF - International Monetary Fund
ITD - International Trade Department, DFID
JDC - Jubilee Debt Campaign
LDCs - Least Developed Countries
MDGs - Millennium Development Goals
MDRI - Multilateral Debt Relief Initiative
NEPAD - New Partnership for Africa's Development
NGO - Non-Government Organisation
OECD - Organisation for Economic Co-operation and Development
PRS - Poverty Reduction Strategy
PSA - Public Service Agreement
RTAs - Regional Trade Agreements
SAARC - South Asian Association for Regional Co-operation
SADC - Southern African Development Community
SATIN - South Asia Trade and Investment Network
UN - United Nations
UNCTAD - United Nations Conference on Trade and Development
UNDP - United Nations Development Programme
UNIDO - United Nations Industrial Development Organisation
WHO - World Health Organisation
WTO - World Trade Organisation

Definitions

Aid – Providing assistance to those in need. All developing countries need more money to be able to reduce poverty, provide healthcare, education and services for their citizens.

Balance of Trade – the financial difference between imports and exports.

Bilateral Aid – Aid given from one country to another.

Bilateral Loans – A loan from one country to another country.

Capital or Principle - The initial amount of the loan.

Commercial Loans – the creditor is a private financial institution, such as a bank.

Conditions or Strings – Actions or policies that a country must take or implement in order to qualify for debt relief. Damaging conditions are those which are imposed above general levels of transparency and accountability, and are detrimental to the country in some fashion.

Debt – Owing money.

Debt Relief – Debt Relief may take the form of cancellation, rescheduling, refinancing or re-organisation.
Debt cancellation is relief from the burden of repaying both the principle and interest on past loans.
Debt rescheduling or re-organisation is a form of relief by which the dates on which principal or interest payments are due are delayed or rearranged.

Debt Service - Interest plus repayments of principal.

DFID (Department for International Development) - This UK Government department plays a major role in influencing trade policy so far as it relates to developing countries. It is headed by a cabinet minister - the Secretary of State for International Development (currently Hilary Benn MP), who is assisted by a junior minister (currently Gareth Thomas MP).

Disbursement - Payment of principal from creditor to debtor.

Environmental Debt – In agreement that all citizens of the world have an equal right to the global commons of the world’s resources of air and sea; those consuming more than their share – particularly of the atmosphere’s capacity to absorb carbon dioxide without irreversible damage to the environment – owe a debt to the rest of the world. This is a debt owed by the rich, overwhelmingly living in financial creditor countries, to the poor who largely inhabit the so-called debtor countries. This massive unacknowledged debt puts the financial debts of the South into a very different perspective.

Escrow account - An account in which assets are held in trust by a neutral third party until the conditions are fulfilled for their release.

Exports – goods which are sold to other countries.

Fair Trade - An alternative approach to conventional international trade. It is a trading partnership which aims at sustainable development for excluded and disadvantaged producers. It seeks to do this by providing better trading conditions, by awareness raising and by campaigning.

Free Trade - Trade without intervention from governments. Prices and products are determined by market forces of supply and demand.

Globalisation - The growing interdependence and interconnectedness of the modern world through increased flows of goods, services, capital, people and information. The process is driven by technological advances and reductions in the costs of integrated transactions, which spread technology and ideas, raise the share of trade in world production and increase the mobility of capital.

Gross Domestic Product -The total value of goods and services produced within a country.

Gross National Income - Previously known as Gross National Product, Gross National Income comprises the total value of goods and services produced within a country (i.e. its Gross Domestic Product), together with its income received from other countries (notably interest and dividends), less similar payments made to other countries.

G8 (Group of 8) – group of the world’s most powerful countries: Canada, France, Germany, Italy, Japan, Russia, UK, USA.

HIPC (Heavily Indebted Poor Countries) – used to refer both to the major international debt relief scheme, and to the countries eligible for it. Established in 1996 and run by the World Bank and IMF.

Illegal Debt - This is where the legal procedures of the recipient country have not been followed. For example, the loan requires (but did not receive) authorisation by parliament or the executive, or the signatory was not authorised to sign.

Illegitimate Debt - This is the issue of lender liability. If poor countries are paying debts that they not only are not able to pay, but also in many cases should not pay, these are illegitimate debts.

IMF (International Monetary Fund) - established in 1945 as the central institution of the international monetary system. Based in Washington DC, USA.

Imports – goods which are bought from other countries.

Interest - Payment from debtor to creditor as the price of the loan.

Least Developed Country - Those countries assessed as having particularly severe long-term constraints to development. Inclusion on the list of Least Developed Countries is now assessed on two main criteria: economic diversity and quality of life.

Low Income Countries - Countries in the Low Income Group, as defined in Income Groups.

MDRI (Multilateral Debt Relief Initiative) – the debt cancellation initiative that came out of 2005 G8 meetings.

Millennium Development Goals - The anti-poverty targets adopted by every member of the United Nations. Each country has until 2015 to meet them.

Multilateral Aid – Aid given by a group of countries such as the European Union or United Nations or through institutions such as the World Bank.

Multilateral Loans – A loan between an international financing institution, such as the World Bank or Inter-American Bank and a country.

NGO (Non-Government Organisation) - These are private non-profit making bodies which are active in development work. To qualify for official support UK non governmental organisations must be registered charities.

Odious Debt – Odious debt arises from loans which should never have been extended in the first place because of the oppressive, tyrannous or corrupt nature of the regime to which they were granted. Sometimes known as 'odious lending'.

Official Loans – the creditor is a government or multilateral institution.

Onerous Debt - Debts are recognised as being unenforceable if their terms are unreasonable. This could be applicable to some sovereign debt, especially in cases where the borrower could be considered to have had no choice in their financial circumstances but to accept the terms of the loan.

OPEC (Organisation of the Petroleum Exporting Countries) - is an example where countries that sell the same product (petroleum) form an alliance.

Paris Club – An informal group of 19 creditor countries that negotiate as a bloc, behind closed doors, with individual poor countries that approach them over debt crisis. Deals only with bilateral debts, ie those being paid direct to the countries and not to multilateral organisations like the World Bank.

Poverty – literally means being poor but can be understood as the lack of good food, clean water, clothing and reasonable shelter.

Poverty Reduction Strategies - Prepared by developing country governments in collaboration with the World Bank and International Monetary Fund as well as civil society and development partners. These documents describe the country's macroeconomic, structural and social policies and programmes to promote growth and reduce poverty, as well as associated external financing needs and major sources of financing.

Principle or Capital - The initial amount of the loan.

Public/Private Partnership - Brings public and private sectors together in partnership for mutual benefit. The term Public/Private Partnership covers a wide range of different partnerships, including the introduction of private sector ownership into businesses that are currently state-owned, the Private Finance Initiative, and selling Government services into wider markets.

Rescheduling - Changing the terms of the loan, often to allow a longer repayment period.

Sovereign Debt – the debtor is a government.

Strings or Conditions – Actions or policies that a country must take or implement in order to qualify for debt relief. Damaging conditions are those which are imposed above general levels of transparency and accountability, and are detrimental to the country in some fashion.

Trade – Buying or selling items or services. At the moment, the rules of international trading are unfair and in favour of countries in the northern hemisphere.

Trade Alliance – often countries join together and create trade agreements and alliances. The European Union is an example of a trade alliance.

UN (United Nations) - an international organisation established immediately after World War II. It replaced the League of Nations. In 1945, when the UN was founded, there were 51 members; 192 nations are now members.

UNICEF (United Nations Children's Fund) - A UN special agency responsible for programs to aid education and the health of children and mothers in developing countries.

Unsustainable Debt - Where a debt may be legal and used for the benefit of the people and in isolation its terms are not overly onerous, it may nevertheless be unpayable because of the overall level of indebtedness of the country relative to its debt-servicing capacity.

Voluntary Aid – Aid sent through voluntary organisations and charities also known as Non-Government Organisations.

WHO (The World Health Organisation) - Public-health agency of the UN, established in Geneva in 1948 to succeed two earlier agencies. Its mandate is to promote “the highest possible level of health” in all peoples.

World Bank – The world’s biggest development organisation, providing low-interest loans and grants to developing countries. Established in 1945 and based in Washington DC, USA.