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The Changing Economic World-paper 2 (Reducing the Global development gap…
The Changing Economic World-paper 2
Economic development
Some countries are more developed than others
Richer
countries used to be classed as
More Economically Developed Countries
(MEDCs) and
poorer
countries were class as
Less Economically Developed Countries (LEDCs).
MEDCs
were generally found in the
north
, e.g. the USA, European countries, Australia and New Zealand.
LEDCs
were generally found in the south, e.g. India, China, Mexico, Brazil and all the African countries.
Countries can be classified based on how wealthy they are
HICs (Higher Income Countries)
The
wealthiest
countries in the world, where the
GNI per head
is
high
and most citizens have a
high quality of life.
E.g. UK, USA, Canada, France.
LICs (Lower Income Countries)
The
poorest
countries in the world, where
GNI per head
is
very low
and most citizens have a
low quality of life.
E.g. Afghanistan, Somalia, Uganda and Nepal.
NEEs (Newly Emerging Economies)
Rapidly
getting
richer
as their economy is moving from being based on
primary
industry (e.g. agriculture) to
secondary
industry (manufacturing).
Quality of life
for many citizens is
improving
.
E.g. China, Brazil, Russia, India
Using wealth on its own can cause problems
GNI per head
can be
misleading
when used on its own because its an
average
-
variations
within the country
don't show up.
It can
hide variation
between
regions
in the country, and between
classes
- the rich in big cities may have much higher measures of development than the poor in rural areas.
For example, if you looked at the GNI per head of Russia might seem high developed, but in reality there are a small number of extremely wealthy people and a lot of very poor people.
Causes of Uneven Development
Physical factors can affect how developed a country is
Poor Climate
Poor climate means
not much will grow
- this
reduces
the amount of food
produced
. In some countries this can lead to
malnutrition
,
e.g. Chad and Ethiopia.
People who are
malnourished
have
low quality of life.
Few Raw Materials
Countries
without
many
raw materials
like
coil
,
oil
or
metal
ores tend to
make less money
because they've got
fewer products to sell.
This means they have
less money
to spend on
development
.
Some countries
do
have a lot of raw materials but still
aren't very developed
as they don't have the money to develop
infrastructure
to
exploit
them (
e.g. roads and ports
).
Poor Farming Land
If the land in a country is
steep
or has
poor soil
(or no soil) then they won't
produce
a lot of
food
. This has the same
effect
as poor climate (
malnourished
).
Lots of Natural Hazards
Countries that have
a lot of natural disasters
(
e.g. Bangladesh, which floods regularly
) have to spend a lot of money
rebuilding
after
disasters
occur.
Natural disasters
reduce quality of life
for affected people and
reduce the amount of money
the government has to spend on
development
projects.
There can be historical reasons for uneven development
Colonisation
Countries that were
colonised
are often at a
lower level of development
when they gain
independence
than they would had they
not
been colonised.
European countries
colonised much of
Africa
in the 19th century. They controlled their
economies
,
removed raw materials
and
slaves
, and
sold
back
expensive manufactured goods.
This was
bad
for African
development
as it made parts of Africa
dependent
on Europe, and led to
famine
and
malnutrition
.
Conflict
War
, especially civil wars, can
slow
or
reduce
levels of
development
even
after
the war is over.
E.g. healthcare becomes much worse and things like infant mortality increase a lot.
Money
is spent on
arms
and
fighting
instead of development, people are
killed
and
damage
is done to
infrastructure
and
property
.
For example, 10 years after the civil war in Uganda ended in 1986, levels of development had barely returned to pre-war levels.
Economic factors can cause uneven development
Lots of debt
2) This money has to be paid back(sometimes with interest)
3) Any money a country makes is used to pay back the debt, so isn't used to develop.
1) Very poor countries borrow money from other countries and international organisations e.g to help cope with aftermath of natural disaster.
An economy based on primary products
2) This is because you don't make much profit by selling primary products. Their prices also fluctuate.
3)This means people don't make much money, so the government has less to spend on development.
1) Countries that mostly export primary products(raw materials like wood, metal and stone) tend to be less developed.
4)Countries that export manufactured goods tend to be more developed
5) This is because you make decent profit by selling manufactured goods. Wealthy countries can also force down the price of raw materials that they buy from poorer countries.
Poor trade links
2) World trade patterns(who trades with who) seriously influence a country's economy and so affect their level of development.
3) If a country has poor trade links it wont make a lot of money, so there'll be less to spend don development.
1) Trade is the exchange of goods and services between countries
Uneven development has consequences
Health
2) People in HICS live longer- UK life expectancy is 81 but Chad's is 51
3) Infant mortality is also much higher in less developed countries- e.g it is 85 per 1000 births in Chad, compared to 4 per 1000 births in the UK.
1) Healthcare in more developed countries is better than in less developed countries
International migration
2)For example Mexico(NEE) borders USA(HIC). Every year over 130.000 Mexicans move to the USA legally(thousands more illegally) to seek better paid jobs and a higher quality of life.
1) If neighbouring or nearby countries have a higher level f development, people will seek to enter that country to make use of the opportunities and quality of life
Wealth
1)People in more developed countries have a higher income than those in lower income countries
2)For example, GNI per head in the UK is over 40 times higher than in Chad.
Development and the DTM
Development Is linked to the DTM
4)Population growth also changes within a country over time as it develops.
5) Changing birth and death rates are linked to a country's economic development
3) Birth rates and death rates differ from country to country. This means population grows faster in some countries, especially in less developed countries.
2) When the birth rate is higher than the death rate the population grows-
this is called natural increase.
Its called natural decrease
when the death rate is higher than the birth rate.
6) So the five stages of the DTM are linked to a country's level of development.
1) The DTM shows how birth and death rate affects population growth
Stages of the Demographic Transition Model
Stage 2
Not very developed , many LICS are in stage 2
The economy is based on agriculture so people have lots of children to work on farms- meaning birth rates are high.
Death rate will fall due to improved healthcare and diet so life expectancy increases.
Stage 3
The birth rate falls rapidly as women have a more equal place in society and better education.
The use of contraception increases and more women work instead of having children
More developed - most NEES are at stage 3.
The economy also changes to manufacturing, so income increases and fewer children are needed to work on farms.
Healthcare improves so life expectancy increases
Stage 1
Least developed
Death rate also high- poor healthcare or famine, and life expectancy is low.
High birth rate- no contraception. Poor health care means many children die
Income very low
Stage 4 and 5
Birth rates are low because people want possessions and a high quality life, and may have dependant elderly relatives, so there is less money available for having children.
Healthcare is good so death rates are low and life expectancy is high. Income is also high.
Most developed- most HICS are at either of these stages.
Economic Development - Case study
Lots of Trans-National Corporations Operate in India
TNC'S can help economic development by increasing the amount of manufacturing industry and they can bring great benefits to the countries they operate in, but they also have disadvantage.
Advantages
More companies mean a greater income from tax in India. Hindustan Unilever has annual sales of over 4.5 billion.
Some TNC'S run programs to help development in India. E.g Unilever's
Project Shakti
helps poor women in rural villages become entrepreneurs by providing loans and products for them to sell in places that sell in places that Unilever would otherwise struggle to supply. There are now about 45,000 women in the scheme.
Provide employment-Unilever employs 16,000 people in India.
Unilever also helps with charities to help run hygiene education programs and provide sanitation to 115 million people in India. This improves health.
Many TNC'S operate in India , including Unilever-one of the biggest food and consumer goods manufactures. Hindustan Unilever limited is its Indian division.
Disadvantages
1) Some profits from TNCs leave India,
e.g. Unilever is a Dutch-British company.
2) TNCs can cause environmental problems, e.g. mercury contaminated glass from a Unilever factory in Kodaikanal ended up in a waste dump instead of being safely disposed of. Mercury is a poisonous chemical that can cause environmental damage and health problems, e.g. brain damage. Unilever did remove the waste and dispose of it safely, and now monitors the area and those affected.However, environmental and public interest groups remain unhappy.
3) TNC'S may move around India to take advantage of local government incentives. Unilever have been accused of closing factories in Dharwad and Mumbai once local tax breaks ended.
Indias's Relationship with the Wider World Is changing
India is playing a
large role
in
regional
and
global politics
as it develops. In recent years the Indian government has
improved relations
with its
immediate neighbours and global trading partners
. International trade is growing...
India is
reducing barriers
to trade and encouraging
foreign direct investment
(FDI).
Trade with
foreign businesses,
particularly those who get companies in India's
large service sector
to do
office jobs
for them is
increasing
.
India is working with its
neighbours
to build the
TAPI pipeline
to carry
natural gas
from
Turkmenistan
, through
Afghanistan
and
Pakistan
to
India
.
India's Rapid Development means its Industrial structure is changing
Primary industry(e.g agriculture) employs 50% of the working population, but is becoming a smaller part of India's economy. It makes up only 17% of the GDP.
Secondary industry(manufacturing) has grown to employ 22% of the workforce. They provide people with reliable jobs(compared to season agricultural work), and selling manufactured goods overseas brings more income into India than selling raw materials.
Tertiary(services) and quaternary(knowledge) industries have become a much larger part of the economy, employing 29% of the workforce. Lots of this is due to growth in IT firms and in supplying services for foreign companies. These contribute to most of India's GDP-53%.
India Receives Different Types of Aids
Long term aid.
1) Intended to help the recipient countries
funded to become more developed
2) E.g. until 2015, India received over £200m
each year from the UK to tackle poverty.
3) Impact can vary — India has had
problems with corruption and aid does not always reach the poorest people.
Top down aid.
1) When an organisation or government receives the
aid and decides where it should be spent.
2) Often large infrastructure projects like dams for
hydroelectric power or irrigation schemes.
3) Can improve a country’s economy, but may not
improve the quality of life of the poorest people.
Short term aid.
2) The UK sent £10m, a rescue team and 1200 tents
to India after an earthquake in 2001. NGOs like Oxfam provided supplies and temporary buildings.
3) Helps with immediate disaster relief, but often not
able to help longer-term recovery efforts
1) Intended to help recipient countries cope with
emergencies. Can come from foreign governments or non-governmental organisations (NGOs).
Bottom up Aid
1)Money is given directly to local people e.g. to maintain a well.
2)E.g. water aid trains local people to maintain village handpumps in India
3)Cab have large impact- schemes are generally supported by local health.
India is a Newly Emerging Economy in Sothern Asia
India was a British colony until 1947, but now has its own democratically elected government.
India has a medium level of development(HDI=0.610. There are large inequalities - some are very wealthy, but most are poor, over 20% live in poverty. Education improving but adult literacy rate is still less than 70%/
India is a rapidly growing NEE. It has the second largest population in the world(approx. 1.3 billion) and is still growing.
It exports services and manufactured goods across the world.
Economic Development has impacts on quality of life and environment.
Environment
India's energy consumptyion has increased with economic development. Fosiil fuels like coal and oila are the most readily available and affordable fuesl, but release lots of pollution and greenhouse gases/ The capital, Delhi is he most polluted city in the world.
Demand for resources can lead it destruction of habitats e.g., mining in Karnataka
But increased income from economic development means people can afford to protect the environment. For example in India 1990 forest cover has stopped decreasing and started to grow.
Quality of Life
There are more jobs and India's daily wages have increased by about 42 Rupees since 2010. This means that people have more money for improvements their life.
But some jobs in industry e.g. coal mining, can be dangerous.
Reducing the Global development gap
Aid
Aid is
given
by one country to another as
money
or
resources
, e.g. food, doctors.
It is spent on
development projects,
for example constructing schools to improve literacy rates, building dams and wells to improve clean water supplies and providing farming knowledge and equipment to improve agriculture.
Aid can definitely help, but sometimes it is wasted by
corrupt governments.
Or once the
money runs out,
projects can
stop working
if there isn't enough
local knowledge
and
support
to keep the projects going.
Debt Relief
When some or all of a country's
debt is cancelled
, or interest rates are
lowered
. This means they have
more money
to
develop
rather than to
pay back
the debt.
For example, Zambia had $4 billion of debt cancelled in 2005. In 2006, the country had enough money to start a free healthcare scheme for millions of people living in rural areas, which improved their quality of life.
Fair Trade
The
fair trade movement
is all about farmers getting a
fair price
for goods produced in
LICs
,
e.g. coffee and bananas, allowing them to provide for their families.
Companies who want to
sell products
labelled as 'fair trade' have to
pay producers
a
fair price.
Buyers
also pay
extra
on top of that to
help develop
the area where the goods come from,
e.g. to build schools or health centres.
Problem
- only a
tiny proportion
of the
extra money
reaches the
original
producers. Much goes to
retailers' profits.
Investment
Foreign-direct investment
(FDI) is when
people
or
companies
in one country
buy
property or infrastructure in
another
.
FDI leads to better access to
finance
,
technology
and
expertise
, and improved
infrastructure
, improved
industry
and an
increase
in
services
.
Industrial Development
In countries with a
very low
level of
development
,
agriculture
makes up a
large
portion of the economy.
Developing
industry increases
GNI
and helps
improve
levels of development as
productivity
, levels of
skill
and
infrastructure
are
improved
.
Using Intermediate Technology
Intermediate technology
includes
tools
,
machines
and systems that
improve
quality of life but are also
simple
to use,
affordable
to buy or build and
cheap
to
maintain
.
For example, solar powered LED light bulbs are used in parts Nepal where the only other lighting options are polluting and dangerous kerosene lamps or wood fires.
Tourism
Tourism
can provide
increased
income as there will be
more money
entering the economy.
Countries like Kenya are using tourism to increase their level of development.
Micro-finance Loans
Micro-finance
is when
small loans
are given to people in
LICs
who may not be able to get loans from
traditional banks.
The loans enable them to
start their own businesses
and become
financially independent
.
Although
micro-finance
works for
some
people, it's
not clear
that micro-finance can reduce
poverty
on a
large
scale.
Economic Development in the UK
Changes in the UK Economy are changing Rural areas
2)In North Somerset the population of some North Somerset towns and villages have increased in years due t quiet towns and east access to the centre of Bristol.
These changes have social and economic effects:
As the population has dropped it's caused a decrease in services, schools and other businesses are closing and unemployment is rising.
In North Somerset, house prices are rising which risks pricing out locals. Roads are congested with people commuting to Bristol.
1)In Cumbria the population has decreased, especially in western Cumbria mainly due to fewer jobs, agriculture and manufacturing are in decline.
The Government is Trying to Resolve Regional Differences
Creating Enterprise Zones
55 Enterprise Zones have been created across England, Scotland and wales
Offer a wide range of benefits
Simpler planning rules - certain developments are automatically allows within enterprise zones
Financial benefits -in some enterprise zones, businesses who invest n buildings or equipment can reduce future tax bills.
Reduced taxes - reduced by up to 100%
Improved infrastructure - the government ensures superfast broadband.
These measures can be used to encourage companies to locate in areas of high unemployment.
The Northern Powerhouse
Governments plan to reduce the inequality between north and south by attracting investment into the north and improve transport links.
Devolving More Powers
1) Scotland, wales and NI have their own devolved governments and some power are being developed to local councils
2)This allows them to use money on schemes that benefit the community like new bus links.
Evidence for a North-South Divide in the UK
Health is generally worse in the north, life expectancy for male babies born in Glasgow in 2012 was 72.6 years but in East Dorset it was 82.9 years.
Education - GCSE results are generally better in the south of England than the Midlands.
Wages are lover in there north in 2014 the weekly wage was 40% lower in Huddersfield than London
There are expectations - some cities don't fit the trends and not everything is worse inn the north.
The decline of heavy industry has had a greater negative impact on the north, but the growth of post-industrial service industry has benefited the south
The UK has a good but improving transport network
Railways - Cross rail will increase central London's rail capacity by 10% when it opens in 2018 - it links London, Birmingham, Leeds and Manchester
Airports - the UK government has agreed to a new runways in the south east.
Roads - capacity on motorways is being increased by upgrading to "smart motorways" with extra lanes.
Ports - a new port, London Gateway is operating at the mouth of the River Thames and is able to handle the worlds largest shipping ships.
Services are Most Important as Economy becomes Post - Industrial.
Information technology - this is now an important part if the UK's. 60,000 people are employed in the IT sector.
Finance - Home to many global financial institutions, some like HSBC have headquarters in London
Services - e.g. Retail is the UK's largest sector, employing 4.4 million people
Research - research and development is increasing in the UK, making use of the UK's skilled university gradates. in 2013 £30 billion was spent on R and D
Tertiary and quaternary industries are growing as secondary manufacturing is declining in the UK. In 2011 they employed 81% of the UK's workforce.
Science and Business Parks
2)Close to housing for the workforce.
3)Near in universities so that businesses have access to university research.
1)On the outskirts of sites near to good transport links.
It has grown because.
The UK has a high number of strong research universities.
Clusters of related businesses in one place can boost each other.
There is a large demand for high-tech products.
The UK has strong Links to Other countries
Transport - The channel tunnel links the UK to France providing a route to mainland Europe.
Electronic communications - USA well was being home to offices for many global IT firms, most of the trans-Atlantic cables linking Europe with the USA.
Culture - The UK's strong creative industries mean that UK culture is exported worldwide e.g. Shaun the Sheep TV is shown in 170 countries.
European Union - Economic and political partnership of 28 countries it gives us businesses access and in 2015 £130 billion of the UK's exports were to the EU in 2015.
Trade - Overseas exports are worth £250 billion each year- USA, Europe and Asia.
The commonwealth - association of 53 independent states and exists to improve the well being of everyone in it.
Key causes of economic change
2)Globalisation - manufacturing has moved overseas where labour costs are low.
Government polices - decisions on investment in new infrastructure and technology and support fir businesses affect how well the economy grows.
1)De-industrialisation and the decline of the UK's industrial base- fewer jobs in manufacturing and industry.
The Effect of Industry on the Physical Environment can be Reduced
2)Modern industrial developments are more environmentally sustainable than older plants as a result of more strict environmental regulations, better environmental awareness and increasing energy and waste disposal costs.
3)Example - Jaguar Land Rover opened a new engine manufacturing centre in Wolverhampton in 2014. The factory is designed to operate more sustainably - it was built maximise natural cooling and natural light to reduce energy use, and has solar panels in the roof that generate 30% of the electricity, all waste is recycled or goes to a landfill site..
1)Industry can have a negative effects on the environment e.g. greenhouse gases.
Measuring Development
Development is when a country is improving
Development
is the progress in
economic
growth, use of
technology
and improving
welfare
that a country has made.
When a country
develops
it basically gets better for the people living there - their
quality
of life
improves
,
e.g. their wealth, health and safety.
There are loads of measures of development
GNI
(Gross National Income) -
total value
of goods and services produced by a country in a year, this includes
income
from
overseas
. It is a measure of
wealth
and as a country develops, GNI gets
higher
.
GNI per head
- this is the GNI
divided
by the country's
population
, it is often given in
US
$ and is sometimes called GNI per
capita
. It is a measure of
wealth
and as a country develops, GNI per head gets
higher
.
GDP
(Gross Domestic Product) - the
total value
of goods and services a country produces in a year. Often given in
US$
. It is a measure of
wealth
and as a country develops, GDP gets
higher
.
Birth rate
- the number of
live
babies born
per thousand
of the
population
per year. It is a measure of
women's rights
and as a country develops, birth rate gets
lower
.
Death rate
- the number of
deaths per thousand
of the population per year. It is a measure of
health
and as a country develops, death rate gets
lower
.
Infant mortality rate
- the number of babies who die
under 1 year old,
per thousand babies
born
. It is a measure of
health
and as a country develops, infant mortality rate gets
lower
.
People per doctor
- the
average
number of people for each
doctor
. It is a measure of
health
and as a country develops, people per doctor gets
higher
.
Literacy rate
- the
percentage
of adults who can
read
and
write
. It is a measure of
education
and as a country develops, literacy rate gets
higher
.
Access to safe water
- the
percentage
of people who can get
clean
drinking water. It is a measure of
health
and as a country develops, access to safe water gets
higher
.
Life expectancy
- the
average age
a person can
expect
to live to. It is a measure of
health
and as a country develops, life expectancy
rises
.
Individual indicators
can be
misleading
if they are used on their own because as a country develops,
some
aspects develop
before
others.
To
avoid
these problems, you can use
more than one
more measure of development or use the
Human Development Index
(HDI).
HDI measures three things;
life expectancy
at birth, number of
years of education
and
GNI per head.
Increasing Development - Tourism and TNCs
Tourism is helping Kenya to increase its development
Kenya
is a LIC in
East Africa.
It attracts
tourists
because of its
tribal culture
,
safari wildlife
,
warm climate
and
beautiful unspoiled scenery.
Kenya's
government
is trying to
boost tourism
as a way of
increasing
its
development
.
Visa fees
for
adults
were
cut by 50%
in
2009
to make it
cheaper to visit
the country. They were also
scrapped
for
children under 16
to encourage
more families
to visit.
Landing fees
at airports on the Kenyan
coast
have been
dropped
for charter airlines.
Tourism has increased from
0.9 million
visitors per year in
1995
to
1.8 million
in
2011
.
Effectiveness - Benefits
1)
Tourism
now contributes
over 12%
of Kenya's GDP - money that can be spent on
development
and
improving quality of life.
2) Nearly
600,000
people are
directly
or
indirectly
employed by the tourism industry - that's
10% of all employment in Kenya.
3) The
24 national parks
charge
entry fees
to tourists. This money is used to
maintain
the national parks, which helps to protect the
environment
and
widlife
.
4) Since 2000,
Kenya's score
on the
HDI
has
increased
from
0.45 to 0.55.
Effectiveness - Negatives
1) Only a
small proportion
of the money earned goes to
locals
. The rest goes to
big companies
, often based in
HICs overseas
, so doesn't help to
close
the
development gap.
2) Some
Maasai tribes
people were
forced off their land
to create national parks for
tourists
.
3) Tourist
vehicles
damage the
environment
,
e.g. safari vehicles destroying vegetation and disturbing animals.
Trans-National Corporations have advantages and disadvantages
TNCs
(trans-national corportations) are companies that are
located
in, or
produce
and sell products in
more than one country.
E.g. Sony is a TNC - it makes electronic products in China and Japan.
TNC
factories
are usually located in
poorer countries
because
labour is cheaper,
and there are fewer environmental and labour regulations, which means they make
more profit.
They can
improve
the
development
of countries they work in by
transferring jobs
,
skills
and
money
to less developed countries,
reducing
the
development gap.
TNC
offices
and
headquarters
are usually located in
richer
countries because there are more people with
administrative skills
as education is
better
.
Advantages
TNCs
create jobs
in all the countries they're located in.
Employees in poorer countries
get a
more reliable income
compared to jobs like farming.
TNCs
spend money
to
improve
the
local infrastructure,
e.g. airports and roads.
New technology
(
e.g. computers
) and
skills are brought to poorer countries.
Disadvantages
Employees in poorer countries
may have to work
long
hours
in
poor
conditions.
Most TNCs
come from richer countries
so the
profits go back there
- they
aren’t reinvested
in the poorer countries the TNC
operates
in.
Employees in poorer countries
may be paid
lower wages
than employees in
richer
countries.
The
jobs created
in poorer countries
aren’t secure
- the TNC could
relocate
the jobs to another country at
any time.
Changes in the economy of the UK are affecting employment patterns and regional growth
Colonised means ruled by a foreign country.
Picture of the Demographic Transition Model:
https://drive.google.com/file/d/1OsE6PR4TXrxwW08IkmzIrrwFDw-ooVtl/view?usp=sharing