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Strategies to reduce the development gap - Coggle Diagram
Strategies to reduce the development gap
Investment by TNCs
How does it work? Any examples?
Countries, organisations (e.g. the World Bank) and TNCs invest in LICs to increase profits.
Investments lead to improvements in infrastructure (e.g. airport construction), services (e.g. water and electricity), dams and reservoirs (for hydro-electro power & irrigation) and industrial development
Over 2,000 Chinese companies have invested in Africa, e.g. HEP in Madagascar and the Tazara railway linking Tanzania and Zambia
Companies such as Google, IBM and Walmart have all invested in Africa
Investment can provide employment opportunities and increase incomes, thereby reducing the development gap.
Evaluation of strategy
Improves skill of local people
Increases trade
Offers jobs
Transfers technology ideas
Misuse of environment
Poor wages & working conditions
Economic leakages
Long term
Global scale
Industrial development
How does it work? Any examples?
Industrial development provides employment, increases individual wealth and results in improvements in education, healthcare and service provision
Industrialisation has promoted development in countries such as Brazil, Mexico and Malaysia (e.g. the development of the Proton car)
Tourism provides a valuable source of foreign exchange and can lead to improvements in infrastructure (airports, roads, electricity and water), education and healthcare
Tourism creates an employment opportunities and raises income
Evaluation
Increases local infrastructure
Offers jobs
Local scale
Improves local economy
Deforestation to allow room for infrastructure
Where does the money come from
Aid
How does it work? Any examples?
Aid often takes the form of financial support offered by countries, international organisations (such as the EU) and charities.
Short-term emergency aid is given in response to natural disasters
Long-term aid supports development projects, such as improving water supply, sanitation and energy provision
UK aid supports education projects in Pakistan
Evaluation
Could have ties - pay back? Debt? Trade?
Can help build infrastructure
Could have no ties
Improves economy slightly
Intermediate technology
How does it work? Any examples?
Intermediate (sustainable) technology is appropriate in many countries for supporting local development projects involved with agriculture, water and health.
For example, local labour and materials were used to construct a small dam to improve water supply at Adis Nifas in Ethiopia
Through improvements at the grassroots level, the development gap can be reduced
Evaluation
Only uses technology that is sustainable for the country
Sustainable
Create jobs
Improves skill of local people
Long-term
Possibly could link to Fairtrade
Fairtrade
How does it work? Any examples
Fairtrade is an organisation that promotes fair wages for farmers in LICs
The international organisation guarantees the farmer a fair price and invests money in local community projects
In Uganda, coffee farmers have benefited from Fairtrade, processing their own coffee beans to increase the export value of the crop.
This helps to reduce the development gap
Evaluation
Gives money to local traders
Could link with intermediate technology
Improves skill of local people
Local scale
Offers jobs
Debt relief
How does it work? Any examples?
Many countries borrowed money in the 1970s and 1980s to invest in development projects
Some countries have fallen into serious debt, unable to pay back the loans or pay the high rates of interest
In 2006, the International Monetary Fund (IMF) agreed to cancel the debts of nineteen of the world's poorest countries
This money can now be used for development projects (e.g. road building and health care in Ghana), improving the lives of millions of people and helping to improve the development gap.
Evaluation
Could have ties
Improves econoly
Global scale
Some more corrupt governments may not be as willing
Could prevent deforestation
Microfinance loans
How does it work? Any examples?
Small-scale financial support to help individuals or community groups to start small businesses
If successful, these businesses will create jobs and increase people's incomes
A good example is the Grameen Bank in Bangladesh
The bank lends money to women to buy a mobile phone so that they can check market prices when selling agricultural
Evaluation
Local scale
Short term
Could have ties
Could help wages