10) Evaluate the impact of the performance of emerging economies on other economies Flashcards
Developed economies (e.g. USA/France) have …HDI scores
high
what are the 3 components of HDI?
- GNI per capita
- adult literacy rates
- life expectancy
how do you have a high HDI?
- high GNI per capita (eg $50,000) (includes form abroad)
- high adult literacy rates (eg 100%)
- high life expectancy at birth (eg 80+)
- very high GDP per capita (eg $45,000)
eg 0.88
examples of low HDI for developing countries
- HDI less than 0.6
- GNIPC - average $2,500 or lower
- literacy rates may be less than 75%
- life expectancy less than 70
- GDP per capita may be less than $1,000
- high levels of extreme poverty
- rapidly increasing population - eg 3% per annum
- very limited financial sector
- business activity dominated by the primary sector
best examples of emerging economies
- India 2. China 3. Brazil 4. Mexico 5. Turkey 6. Indonesia 7. Vietnam 8. Bansladesh
features of HDI in emerging economies
- features HDI: from 0.83 (Turkey) to 0.63) India
- Life expectancy- in the 70’s
- Adult Literacy: Mainly in the 80% range, though China is 96% and Bangladesh is 65%
- GNIPC: from Turkey $36,000 to Bangladesh ($7,000) (average $20,000)
- GDP per capita (average about $15,000).
how are emerging economies all unique
Some emerging economies are almost developed (e.g. Turkey & China) and some are still closer to developing (e.g. Bangladesh and India). All are unique! China has very little in common with Bangladesh.
why are emerging economies not developed?
emerging economies have at least one feature that prevents them being developed (e.g. extreme poverty prevalent in one or more regions) and at least one feature that distinguishes them from developing.
In the main, that feature is about power and market size, meaning the emerging economy (e.g. India/Bangladesh and Vietnam) is highly attractive to inward FDI and a preferred destination for MNCs, producing & selling.
what sector are emerging economies dominated by?
Emerging economies are industrialised, often dominated by secondary sector and have growing financial sector. However, they are invariably imbalanced- e.g. cities rich/sophisticated, rural areas poor/backward.
how do emerging economies benefit developed economies?
1.Most MNCs are from developed economies. Emerging markets provide big potential new customers bases for MNCs, increasing their profits, enhancing GNI per capita in developed economies.
- MNCs from developed economies have engaged in
large-scale offshoring to emerging economies, significantly increasing profitability of MNCs - Improved education/training systems in emerging economies have helped provide skilled labour to fill shortages in developed (e.g. nurses NHS)
How have developing economies benefitted from emerging economies?
1.Emerging economies are often physically closer to developing economies and therefore most likely to trade with them. Being industrialised, they also demand a large % of the natural resources produced by developing economies
2.MNCs from emerging economies (e.g.TikTok, Tata etc) are more likely to target developing markets so improve the consumer choice available in developing economies.
how do emerging economies harm developed economies?
1.Offshoring has led to large-scale job losses in developed economies. This has increased structural unemployment and created many social problems.
- The benefits experienced by the MCs in developed economies have remained in the hands of the already rich and powerful, therefore increasing income and wealth inequality in developed countries
how have emerging economies harmed developing economies?
- Emerging economies are more attractive destinations for FDI, crowding out some FDI that might go to developing economies
2.Some emerging economies (particularly China and Russia) use their increased power to exploit developing economies for their own political and economic objectives
