Transcript Lec 7.ppt

2. Economic Development –
Basic Need Approach or Physical
Quality of Life Approach
Lecture 7
Background
To measure economic development the traditional approaches are
concerned with,
(i) increase in GNP,
(ii) increase in per capita GNP.
But with the passage of time a dissatisfaction developed against these
measures.
Rather these measures, it was emphasized to use the measures of
"Employment and Distribution".
But so many economists are of the view that criteria of 'Increase in
Employment' is not a suitable index of economic development. It is
so because that the unemployment which is found in UDCs is
different from that unemployment which exists in DCs. Therefore, it
will be least attracting to measure economic development with
increase in employment.
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In the same way, to link 'Redistribution of Income' with economic
development may not be accepted as it may happen that poverty is
existing in a country despite equal distribution of income, or unequal
income distribution is co-existing with fall in absolute poverty.
In such state of affairs the economic development would require the
abolition of absolute poverty and adversity, which could be possible
only if people get the 'Basic Needs' of life.
Therefore, the economists use the criterion of basic needs to measure
economic development.
According to this approach if people are in a position to avail more
amount of food, have better access to educational facilities, and have
greater command over the civic amenities like water supply, water
sewerage, health care and shelter etc., all such would represent
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economic development.
Therefore, according to this approach whether GNP and per
capita GNP increase or not, whether a fairer distribution of
income is made or not, the real matter lies with the
'Provision of Basic Needs or facilities to the people'.
This index identifies the components of the produced goods
and the segments of the society which are benefited by
such goods and services.
Therefore, if people fail to get more goods and services even
GNP has gone up, it will not represent economic
development.
Therefore, for the sake of economic development we shall
have to make such a measures whereby the availability of
basic needs to the masses could be made sure.
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Accordingly, to measure economic development we will have
to select those measures which are concerned with the
basic needs, despite certain differences.
As in case of country like Pakistan the supply of doctors is
increasing, but a common man fails to get medical facilities
as the doctors are reluctant to go to small cities and
villages, and majority of the doctors and medical services
remain confine to big cities.
In such situation, the increase in doctors and medical services
will be of least benefit to the common men.
Again, if the infant mortality rates are decreased in cities
while such may not occur in case of rural areas.
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Moreover, if in so many countries it is stressed upon to enhance
education facilities
• but the educational system is not made effective,
• the defects of educational system are not removed
• and the ratio of students to teachers is not improved,
in such situation just expansion in educational facilities can not be
accorded as an indicator of economic development.
Thus, in spite of lot of flaws in the indicators of increase in education,
health, water supply, level of calories and shelter, this measure of
economic development presents a realistic picture of economic
development than, GNP, GNP per capita and GNP redistribution
methods.
These measures represent the determination on the part of govt.
regarding supply of social services. Thus, the basic needs approach
presents a better explanation to remove poverty than the
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"Redistribution Theory".
• Thus in the basic needs approach, the following
aspects are analyzed:
• (i) How much goods and services are produced?
• (ii) What goods and services are being produced?
• (iii) How goods and services are being produced?
• (iv) What will be the effects of production and
distribution on the society?
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This shows that in this theory the 'Amount of goods
and services' is of crucial importance and the
increase in the quantity of goods and services will
help in removing poverty.
The increase in GNP per capita represents the rise in
standard of living.
But the criterion of 'Basic Needs' tells us what are the
components of GNP and which segments of the
society have utilized such components.
This approach works like social indicators of economic
development. We will have to define some better
indicator for each basic need.
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Important Needs
Basically, the more important needs are concerned
with the provision of foods, basic education, health
services, water supply, water sewerage, residential
facilities and infrastructure.
On the basis of stipulated indicators regarding Basic
Needs, we can make comparison between the
countries. These indicators or measures will reflect
the relative difference between the rich and the
poor countries.
Moreover, with these measures we can find that
which countries are serious regarding provision of
basic needs, and which are non serious.
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Thus, according to the Basic Needs approach to economic development,
following indicators can become helpful to measure economic
development:
(i) Health Standard: Here it is considered;
(a) the life expectancy of the citizens of the country,
(b) the infant mortality rates (IMR) in the country.
(ii) Education Level: Here it is considered the 'Literacy Rate' in the
country. Moreover, what is the enrolment ratio at primary level.
(iii) Food Availability: Here it is considered that what is per capita food
availability in the country.
(iv) Water Supply: What is the percentage of the population which is
getting the facility of clean water supply.
(v) Water Drainage: Here it is assessed that what is the percentage of
the population which is getting the facility of water drainage etc.
(vi) Shelter And Residence: Here it is estimated that what is the ratio of
the population who is having suitable shelter and residences.
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Growth of GNP Versus Basic Needs Approach
The growth of income (GNP) method identifies that path
which leads to increase the real incomes of the poor
people.
As a result, they will become more productive, the value of
their assets will increase, hence they will be able to have a
basket of basic needs.
This shows that because of increase in income people will
eventually be able to have a greater command over goods
and services, and their poverty could be eliminated.
Therefore, whether it is of increase in GNP or of increase in
basic needs both measures aim at elimination of poverty
It is the GNP method which directly aims at abolition of
poverty, while the basic needs approach indirectly aims at
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abolition of poverty.
The increase in basic needs like education, foods,
health care, shelter, clean and piped water, and
water drainage facilities will become helpful in
increasing productivity.
• Their health standards will improve,
• their life expectancy will increase and
• they will be able to work more diligently.
Consequently, the outputs both the total as well as
per head will increase. The proponents of basic
needs approach give the following superiority over
GNP approach:
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(i) The basic needs approach is better than income approach
because most of basic needs are concerned with the
supply of social services on the part of government.
But for such all; govt. is in need of funds and such funds can
be raised through imposing direct taxes or taxing the
luxurious goods.
In this way, on the one side, the unnecessary consumption
will be controlled, and unequal income distribution could
also be checked.
Moreover, the efficiency of the middle and lower middle class
will increase when they will be provided greater social
services.
In this way, the fruits of economic development could be
availed of by a majority of population.
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(ii) It is not guaranteed that increase in incomes due to economic
growth could be spent over better education, better residential
facilities and better health care services etc.
It happens that so many persons do not follow optimal behavior in
respect of making expenditures on food and health care, particularly,
those people whose class changes.
As the case of Pakistani and Indian labor who earn a lot while migrating
to Middle East, but they fail to spend more of their incomes on better
fooding and lodging etc.
Again, the farmers in these countries whose incomes increase when
they grow 'Cash Crops', but they fail to spell their increased incomes
on education, health water supply and water sewerage etc.
Perhaps the income elasticity for these goods is lower. I
n such situation, basic needs approach will present a better picture of
economic development than GNP approach.
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(iii) In so many cases the means and ways which lead to increase the
incomes may air affect the level of foodings.
As due to economic growth the women have to work out of their houses
and there will be reduced 'Breast Feeding'.
Consequently, the health standards of offspring's will be affected,
though the incomes of the mothers have gone up.
The economic development may lead to increase the production of cash
crops at the cost of decrease in the production of food staples etc.
In such situation, the economic development will lead to reduce the
production and consumption of sugar, wheat and maize etc.
Those lands which used to produce maize now will be utilized for dairy
farms. In this way, the production of cheaper foods will come down.
The hydro-electricity (HE) projects will lead to increase the income of
the country, but the canal system in the country will promote water
logging and salinity in the country. They will reduce the fertility of
lands.
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As a result, the cost of HE projects may exceed their benefits.
(iv) It is not necessary that because of increase in incomes all
the members of the family could equally benefit.
Sometimes, the major share is taken away by the women and
the children who have not contributed to earning, as the
case of Pakistani and Indian men.
In such situation, the division of income and food will not
occur on the basis of work.
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(v) The Income approach does not tell us that what will be the
nature of produced goods.
If along with increase in GNP those goods are produced or
imported which are consumed by the rich class, then only a
limited segment of the society will be benefited by increase
in GNP.
On the contrary, the basic needs approach selects the
appropriate final goods and guides in respect of
appropriate technique of production to produce such
goods.
In such situation, the employment opportunities will increase;
income will be distributed equally; and optimum and a
balanced demand for goods will come into being in the
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society.
(vi) In each society there are so many destitute
orphans, old aged and ailing persons who do not
contribute to national output of the economy, and
they depend upon transfer payments.
If even along with increase in GNP their poverty does
not come down, then it will be better to use basic
needs approach, rather GNP approach to measure
economic development.
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(vii) The increase in income or GNP only becomes
possible due to increase in outputs of the society,
whereas it ignores the production and consumption
of immaterial goods.
As GNP approach suggest that the immaterial goods
and services like recreation, mental peace and
participation in social and political affairs do not
add any thing to national output.
On the other hand, the basic needs approach includes
even those immaterial factors which lead to
increase human efficiency.
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MILLENIUM DEVELOPMENT GOALS
(MDGs)
A global agenda for development
1. THE MDG FRAMEWORK
2. ISSUES FOR DISCUSSION
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MDG FRAMEWORK
―
COMMITS INTERNATIONAL COMMUNITY TO AN EXPANDED VISION OF DEVELOPMENT
―
PROMOTES HUMAN DEVELOPMENT AS KEY TO SOCIAL AND ECONOMIC PROGRESS
―
CREATES GLOBAL PARTNERSHIP FOR DEVELOPMENT
―
―
―
CONSOLIDATES TARGETS ESTABLISHED BY INTERNATIONAL CONFERENCES INTO EIGTH
ESSENTIAL GOALS
FIRST SEVEN MUTUALLY REINFORCING, AIMED AT REDUCING POVERTY IN ALL FORMS
EIGTH GOAL – GLOBAL PARTNERSHIP FOR DEVELOPMENT – IS ABOUT MEANS TO ACHIEVE
FIRST SEVEN – “A GRAND BARGAIN”
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The Millennium Development Goals
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 1: Eradicate extreme poverty and hunger
Target 1.A: Halve, between 1990 and 2015,
the proportion of people whose income is less
than one dollar a day
1. Proportion of population below $1 (PPP) per day[i]
Target 1.B: Achieve full and productive
employment and decent work for all,
including women and young people
1. Growth rate of GDP per person employed
2. Poverty gap ratio
3. Share of poorest quintile in national consumption
2. Employment-to-population ratio
3. Proportion of employed people living below $1 (PPP)
per day
4. Proportion of own-account and contributing family
workers in total employment
[i]
Target 1.C: Halve, between 1990 and 2015,
the proportion of
1. Prevalence of underweight children under-five years
of age
people who suffer from hunger
2. Proportion of population below minimum level of
dietary energy consumption
For monitoring country poverty trends, indicators based on national poverty lines should be used, where available.
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 2: Achieve universal primary education
Target 2.A: Ensure that, by 2015, children
everywhere, boys and girls alike, will be able
to complete a full course of primary
schooling
1.
Net enrolment ratio in primary education
2.
Proportion of pupils starting grade 1 who reach last
grade of primary
3.
Literacy rate of 15-24 year-olds, women and men
Goal 3: Promote gender equality and empower women
Target 3.A: Eliminate gender disparity in
primary and secondary education, preferably
by 2005, and in all levels of education no
later than 2015
1.
Ratios of girls to boys in primary, secondary and
tertiary education
2.
Share of women in wage employment in the nonagricultural sector
3.
Proportion of seats held by women in national
parliament
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The Millennium Development Goals
Goals and Targets
(from the Millennium
Declaration)
(cont.)
Indicators for monitoring progress
Goal 4: Reduce child mortality
Target 4.A: Reduce by two-thirds, between
1990 and 2015, the under-five mortality
rate
1. Under-five mortality rate
2. Infant mortality rate
3. Proportion of 1 year-old children immunised against
measles
Goal 5: Improve maternal health
Target 5.A: Reduce by three quarters,
between 1990 and 2015, the maternal
mortality ratio
1. Maternal mortality ratio
Target 5.B: Achieve, by 2015, universal
access to reproductive health
1. Contraceptive prevalence rate
2. Proportion of births attended by skilled health
personnel
2. Adolescent birth rate
3. Antenatal care coverage (at least one visit and at
least four visits)
4. Unmet need for family planning
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 6: Combat HIV/AIDS, malaria and other diseases
Target 6.A: Have halted by 2015 and begun
to reverse the spread of HIV/AIDS
1. HIV prevalence among population aged 15-24 years
2. Condom use at last high-risk sex
3. Proportion of population aged 15-24 years with
comprehensive correct knowledge of HIV/AIDS
4. Ratio of school attendance of orphans to school
attendance of non-orphans aged 10-14 years
Target 6.B: Achieve, by 2010, universal
access to treatment for HIV/AIDS for all
those who need it
1. Proportion of population with advanced HIV infection
with access to antiretroviral drugs
Target 6.C: Have halted by 2015 and begun
to reverse the incidence of malaria and other
major diseases
1. Incidence and death rates associated with malaria
2. Proportion of children under 5 sleeping under
insecticide-treated bednets
3. Proportion of children under 5 with fever who are
treated with appropriate anti-malarial drugs
4. Incidence, prevalence and death rates associated
with tuberculosis
5. Proportion of tuberculosis cases detected and cured
under directly observed treatment short course
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 7: Ensure environmental sustainability
Target 7.A: Integrate the principles of
sustainable development into country
policies and programmes and reverse the
loss of environmental resources
Target 7.B: Reduce biodiversity loss,
achieving, by 2010, a significant reduction
in the rate of loss
1.
2.
3.
4.
5.
6.
7.
Proportion of land area covered by forest
CO2 emissions, total, per capita and per $1 GDP (PPP)
Consumption of ozone-depleting substances
Proportion of fish stocks within safe biological limits
Proportion of total water resources used
Proportion of terrestrial and marine areas protected
Proportion of species threatened with extinction
Target 7.C: Halve, by 2015, the proportion of
people without sustainable access to safe
drinking water and basic sanitation
8.
Target 7.D: By 2020, to have achieved a
significant improvement in the lives of at
least 100 million slum dwellers
10. Proportion of urban population living in slums[i]
9.
Proportion of population using an improved drinking
water source
Proportion of population using an improved sanitation
facility
The actual proportion of people living in slums is measured by a proxy, represented by the urban population living in households with at least one of the four characteristics: (a)
lack of access to improved water supply; (b) lack of access to improved sanitation; (c) overcrowding (3 or more persons per room); and (d) dwellings made of non-durable material.
[i]
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 8: Develop a global partnership for development
Some of the indicators listed below are monitored
separately for the least developed countries (LDCs),
Africa, landlocked developing countries and small island
Includes a commitment to good governance, developing States.
Target 8.A: Develop further an open, rulebased, predictable, non-discriminatory trading
and financial system
development and poverty reduction – both
nationally and internationally
Target 8.B: Address the special needs of the
least developed countries
Includes: tariff and quota free access for the
least developed countries' exports; enhanced
programme of debt relief for heavily indebted
poor countries (HIPC) and cancellation of
official bilateral debt; and more generous
ODA for countries committed to poverty
reduction
Official development assistance (ODA)
1. Net ODA, total and to the least developed countries,
as percentage of OECD/DAC donors’ gross national
income
2. Proportion of total bilateral, sector-allocable ODA of
OECD/DAC donors to basic social services (basic
education, primary health care, nutrition, safe water
and sanitation)
3. Proportion of bilateral official development assistance
of OECD/DAC donors that is untied
4. ODA received in landlocked developing countries as a
proportion of their gross national incomes
5. ODA received in small island developing States as a
proportion of their gross national incomes
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 8: Develop a global partnership for development (cont.)
Target 8.C: Address the special needs of
landlocked developing countries and small
island developing States (through the
Programme of Action for the Sustainable
Development of Small Island Developing
States and the outcome of the twenty-second
special session of the General Assembly)
Target 8.D: Deal comprehensively with the
debt problems of developing countries through
national and international measures in order to
make debt sustainable in the long term
Market access
6. Proportion of total developed country imports (by
value and excluding arms) from developing countries
and least developed countries, admitted free of duty
7. Average tariffs imposed by developed countries on
agricultural products and textiles and clothing from
developing countries
8. Agricultural support estimate for OECD countries as a
percentage of their gross domestic product
9. Proportion of ODA provided to help build trade
capacity )
Debt sustainability
10.Total number of countries that have reached their
HIPC decision points and number that have reached
their HIPC completion points (cumulative)
11.Debt relief
Initiatives
committed
under
HIPC
and
MDRI
12.Debt service as a percentage of exports of goods and
services
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium
Declaration)
Indicators for monitoring progress
Goal 8: Develop a global partnership for development (cont.)
Target
8.E:
In
cooperation
with
pharmaceutical companies, provide access
to affordable essential drugs in developing
countries
13. Proportion of population with access to affordable
essential drugs on a sustainable basis
Target 8.F: In cooperation with the private
sector, make available the benefits of new
technologies, especially information and
communications
14. Telephone lines per 100 population
15. Cellular subscribers per 100 population
16. Internet users per 100 population
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PROGRESS ACHIEVED
―
HALVING EXTREME POVERTY REMAINS (ED) WITHIN REACH
LARGELY DUE TO EXTRAORDINARY SUCCESS IN MOST OF ASIA. BUT SOME IN
SOUTH ASIA AND SUBSAHARIAN AFRICA REMAINS OFF TARGETS
―
GLOBAL ECONOMIC CRISIS COULD ENDANGER GAINS
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PROGRESS ACHIEVED (CONT.)
―
OTHER SOCIAL GOALS – SOME PROMISE
 PRIMARY SCHOOL ENROLMENT
 90% REACHED IN EIGTH OUT OF TEN REGION
 GENDER PARITY 95% IN SCHOOL IN SIX OF TEN REGIONS
 DEATH FROM MEASLES CUT ONE THIRD 2000-2006
 VACCINATION RATE 80% FOR CHILDREN IN DEVELOPING WORLD
 1.5 BILLION PEOPLE GAINED ACCESS TO CLEAN DRINKING WATER
 ACCESS TO MEDICINES SPREADING
 THANKS TO DEBT WRITE OFFS AND REDUCED DEBT SERVICE, SOCIAL SERVICES SPENDING
UP
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CONTINUING CHALLENGES
―
―
SOCIAL GOALS REMAIN IN JEOPARDY
MATERNAL MORTALITY STILL WAY HIGH (1/2 MILLION MOTHERS DIE EVERY YEAR AT
CHILD BIRTH)
―
ONE QUARTER OF CHILDREN IN DEVELOPING COUNTRIES UNDERNOURISHED
―
HALF DEVELOPING WORLD POPULATION STILL LACK IMPROVED SANITATION
―
OVER ONE THIRD LIVE IN URBAN SLUMS
AND ON AND ON
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BREAKING NEWS!
―
―
―
―
DUE TO ECONOMIC CRISIS, “DEVELOPMENT EMERGENCY” DECLARED
WHICH WILL PUT MDGs OUT OF REACH FOR MANY COUNTRIES
WHILE EMERGING ECONOMIES WILL GROW AT 1.5 PERCENT IN 2009,
ANOTHER 55-90 MILLION WILL SLIP BACK INTO POVERTY
PER CAPITA INCOME WILL FALL IN SOME 50 POOR COUNTRIES, MOST OF
THEM IN AFRICA
DISPARITIES WILL INCREASE AND VULNERABLE POPULATIONS WILL BE
MOST AT RISK
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OF INTEREST HERE:
―
―
ACCESS TO ESSENTIAL MEDICINES. IMPROVED FOR HIV/AIDS,
MALARIA & TB; NOT FOR OTHER CHRONIC DISEASES
ACCESS TO NEW TECHNOLOGIES

TO INCREASE THE POTENTIAL OF TECHNOLOGY TO CONTRIBUTE TO
DEVELOPMENT, WE NEED GREATER DIFFUSION OF APPRIATE NEW
TECHNOLOGIES, INCLUDING ICT, AGRICULTURE, AND TO ADDRESS CLIMATE
CHANGE
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WHAT OF THE FUTURE?
―
―
―
―
DEVELOPMENT LANDSCAPE COULD BE VERY DIFFERENT






MORE COMPLEX
CLIMATE CHANGE ISSUES
OTHER CHRONIC DISEASE (CANCER, CARDIAC)
ODA REDEFINED
NEW DONORS, NEW ACTORS, NEW FORMS OF COOPERATION
LARGE UNFINISHED AGENDA
FOR NEXT GENERATION OF MDGs (MDGs+), TECHNOLOGY COULD BE KEY
NEW TARGETS, NEW INDICATORS
COULD THIS AGENCY PLAY AN IMPORTANT ROLE? IF SO, WHAT ISSUES?
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ISSUES FOR DISCUSSION
―
―
GIVEN ITS UNIQUE MANDATE, IS AN MDG FRAMEWORK APPROPRIATE? NOW, AT THE
NEXT STAGE?
HOW TO ADDRESS BROADER DEVELOPMENT AGENDA


―
EFFECTIVE PARTNERSHIPS (WITHIN UN, EXTERNALLY)
RESOURCE LIMITATIONS? HOW TO EXPAND


―
ACCESS TO BROADER NATIONAL COUNTERPARTS
PROGRAMME APPROACH
DIFFUSION OF TECHNOLOGIES
ARE NUCLEAR TECHNOLOGIES FOR DEVELOLPMENT A GLOBAL PUBLIC GOOD?
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