NGO Another Way (Stichting Bakens Verzet), 1018 AM Amsterdam, Netherlands.


Edition 03: 06 March, 2011.

Edition 08 : 24 October, 2013.


01. E-course : Diploma in Integrated Development (Dip. Int. Dev)



Quarter 1.






Study value : 04 points out of 18.

Indicative study time: 112 hours out of 504.


Study points are awarded only after the consolidated exam for Section A : Development Problems has been passed.



First block : Poverty and quality of life.


Study value : 02 points out of 18.

Indicative study time: 57 hours out of 504.


Study points are awarded only after the consolidated exam for Section A : Development Problems has been passed.



First block : Poverty and quality of life.


First Block : Section 1. Analysis of the causes of poverty. [26.50 hours]

First Block : Section 2. Services needed for a good quality of life.

First Block : Exam. [ 4 hours each attempt]



Block 1 of Section 1. Analysis of the causes of poverty. [26.50 hours]


Part 2 : In depth analysis of the causes of poverty. [14.00 hours]


01. In depth : definition of poverty.

02. In depth : some factors linked with poverty.

03. In depth : debts and subsidies.

04. In depth : financial leakages : food and water industries.

05. In depth : financial leakage : energy.

06. In depth : financial leakage : means of communication..

07. In depth : financial leakage : health and education.

08. In depth : financial leakage : theft of resources.

09. In depth : financial leakage : corruption.

10. In depth : the industry of poverty.


Report on Section 1 of Block 1 : [06.00 Hours]



Part 2 : In depth analysis of the causes of poverty. [14.00 hours]


03. In depth : debts and subsidies. (At least one hour)


Look at slide:


03. Interest and subsidies.


Consider :




“ Currency came into existence merely as a means of exchange; usury tries to make it increase [as though it were an end in itself]” Aristotle, Politics, Book I, Chapter X,  transl. Barker E., Oxford University Press, 1957 reprint, p. 35.




Almost all new financial means are actually created by private banks in the form of loans. This means our financial system is based on debt. The net  profit of the banks is called the «bank spread », which is the difference between the rate of interest the banks charge their clients and the sum of interest they pay to their depositors, plus administration costs. In principle, “bank spread” forms part of what we call the real economy. Depositors, people who have positive bank balances, keep the interest paid to them by their banks.


The positive interest the banks pay to their depositors is unearned investment income. This accumulates exponentially. It forms the basis of what we call the “paper economy” or the “speculative economy”.


Look at the following graph. (Source L.F.Manning, Paraparaumu. New Zealand, 2009)


Figure 5.9 : Debt Model of the New Zealand Economy 1978-2009.


1. Research.


Note and describe the relation between total debt M (the blue line), the speculative unearned income MS (the red line), and the total of the Gross Domestic Product (GDP), which is the area between the red line and the blue line. Which changes occurred between 1978 and 2008 ?


2. Opinion


What do you think would happen if the rate of increase of speculative income MS (the area under the red line) were greater than the rate of  increase of the    Gross Domestic Product (the area between the red line and the blue line) ?




During your work on 02.Some factors linked with poverty you traced the production chain of a can of peas or another industrial product of  your choice.


3. Opinion.


Make a list of the points along your production chain where interest would be charged. What are your conclusions?




During work on factors linked with poverty the production chain of a can of peas or another industrial product of  your choice was studied.


4. Opinion.


Make a list of the points along your production chain where subsidies might have been given to interested parties. What are your conclusions?


The list of possible subsidies is very long. They include the following. There are many others.

Discount on the purchase of industrial land.

Infrastructures development.

Tax exemptions

Subsidies for advanced technologies (for example, innovation and the use of better technologies).

Compensatory subsidies (protectionism  -example,  agricultural subsidies for U.S., European, and Japanese farmers)

Subsidies under the Kyoto treaty.

Ecological liberalisation  - or  - free pollution. 

Research subsidies.

Sales subsidies.




“The root cause of the business and human rights predicament today lies in the governance gaps created by globalization - between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. These governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation. How to narrow and ultimately bridge the gaps in relation to human rights is our fundamental challenge.” Ruggie J., Protect, Respect, and Remedy: A Framework for Business and Human Rights, Report of the Special Representative of the Secretary-General on Human Rights and Transnational Corporations and Other Business Enterprises’, Human Rights Council report A/HRC/8/5 dated  7 April 2008, [Office of the United Nations High Commissioner for Human Rights (OHCHR), Introduction, Para. 3.


“To attract foreign investment, host States offer protection through bilateral investment treaties and host government agreements. They promise to treat investors fairly, equitably, and without discrimination, and to make no unilateral changes to investment conditions. But investor protections have expanded with little regard to States’ duties to protect, skewing the balance between the two. Consequently, host States can find it difficult to strengthen domestic social and environmental standards, including those related to human rights, without fear of foreign investor challenge, which can take place under binding international arbitration.” .” Ruggie J., (2008, see above), par. 34.


The major issue of indirect subsidies caused by the socialisation of the environmental costs of modern industrial activity was first brought up by Hohmeyer, O., Social Costs of Energy Consumption, Springer Verlag, Berlin etc, 1988. ISBN 3-540-19350-2; ISBN 0-387-19350-2. The author calculated that even in 1988, the cost of wind energy was directly competitive with conventional energy if the social costs of conventional energy generation and distribution were taken into account. For more on this, see Nicolson, A., The Next Revolution : Discarding Dangerous Fuel Accounting Practices, Renewable Energy World, Nashua, 23 October 2014.


“The science tells us that GHG emissions are an externality; in other words, our emissions affect the lives of others. When people do not pay for the consequences of their actions we have market failure. This is the greatest market failure the world has seen.” ( Stern, N. “The Economics of Climate Change : The Stern Review”, Cambridge University Press, Cambridge, 2007 as reported in New Economist, 30 October, 2006.)


The environmental costs from global human activity have been assessed at US$ 6.6 trillion in 2008. This was 11% of the world’s GDP. In 2008, the environmental damage caused by the world’s 3000 largest publicly listed companies was assessed at US$ 2.5 trillion. In 2008, the proportion of company earnings that could be at risk from equity costs in an equity portfolio weighted according to the MSCI All Country World Index was assessed at 50%. This means that in 2008 50% of the profits of multinational businesses was due to the socialisation of the costs of their activities. (Trucost, Universal Ownership : Why Environmental externalities matter to institutional investors,  PRI (Principles for Responsible Investment) Association with UNEP Finance Initiative, London, 6 April, 2011.)



5. Research.


Look at the total public budgets of five  multinationals  active in your country .Make a comparison between them and the budget of your country and with the National Domestic Product of your country What are your conclusions?.


Contrary to what is often said, neither the concentration of control over productive and service sectors nor the use of modern technologies necessarily makes a multinational more efficient than a smaller operator. This is even so with banks “that are too big to fail” :


“Evidence strongly suggests that the cost of capital intermediation – the cost of a productive user of capital to secure investment from capital sources – has increased in recent decades, a period in which it should have fallen significantly because of IT and quantitative advances. The only possible cause of this is that incremental transaction volume, enabled by deregulation, has exacted costs on capital raising for the productive economy.” (W.C.Tuberville, Cracks in the Pipeline : Restoring Efficiency to Wall Street and Value to Main Street,, Financial Pipeline Series, New York, 5th December 2012.)


 First  block : Poverty and quality of life.

Index : Diploma in Integrated Development  (Dip.Int.Dev)

 List of key words.

 List of references.

  Course chart.