2-B The Changing Economic World

Question 1

What are the different ways of classifying parts of the world according to their level of economic development and quality of life?

Answer 1

LICs – The average person has low incomes. Agriculture still plays an important role in their economy

NEEs – They start to experience higher rates of economic growth. Usually due to a rapid increase in factory expansion and industrialisation

HICs – They have high average incomes. Office work has taken over factory employment; post-industrial economy.

Question 2

What are the different economic and social measures of development?

Answer 2

Gross National Income (GNI) – Considers the value of goods and services, and the income earned from investments overseas

Birth and death rates – Number of deaths / births in a year per 1000

Infant mortality – Average number of deaths of infants under 1 year of age, per 1000 live births, per year

Life expectancy – Average number of years a person might be expected to live

Literacy rates – Percentage of people who have basic reading and writing skills

Human Development Index (HDI) – measures development by combining GDP per capita, life expectancy and adult literacy. This combined measure uses economic and social indicators to produce an index figure that allows comparison between countries

Question 3

What are the limitations of economic and social measures?

Answer 3

No complete list of factors affecting quality of life can be created

The way people weight these factors are different

It is not clear which set of measures best reflects desirable states in various areas

Question 4

What is the level of development within Stage 2 of the Demographic Transition Model?

Answer 4

LICs – even the poorest countries have seen a decline in death rate due to global efforts to tackle hunger and diseases. Sierra Leone’s death rate in 1960 was 33, but now it is 17 deaths per 1000.

Question 5

What is the level of development within Stage 3 of the Demographic Transition Model?

Answer 5

NEEs – Fewer families (compared to LICs) live on subsistence means – parents don’t have lots of children to help farm. Women’s lives have changed. Fertility rates in Bangladesh was 7 in 1970 and now it is 2.2

Question 6

What is the level of development within Stage 4 of the Demographic Transition Model?

Answer 6

HICs – health care is very good, so death rates have dropped. Birth rates have dropped as children are now economic hindrances and not help. Women are putting careers first, so children are born later in their life and are less wanted

Question 7

What is the level of development within Stage 5 of the Demographic Transition Model?

Answer 7

HICs that have an ageing population – due to the death rate rising (the proportion of people above the age of 80 is growing) and the decrease in birth rate. For example, Japan and Denmark

Question 8

What are the causes of uneven development?

Answer 8

Physical factors – Natural disasters (LICs have less resources to deal with them. Food and income are affected); Man-made environmental problems (Hinder development by affecting food)

Economic factors – Presence of raw materials (countries with rich natural resources develop faster. But, it depends on how wealth is redistributed)

Historical factors – Colonialism (Countries under strong colonial powers develop faster. Some countries became dependent on colonial powers)

Question 9

What are the consequences of uneven development?

Answer 9

Disparities in wealth: LICs may become dependent on HICs/NEEs on aid/debt. Many LICs borrow money from World Bank to pay for hospitals and health care are now in debt. Every year the debt increases, so they need even more money.

Health issues: Many LICs tend to have deteriorated hospitals due to the country’s low income and indebtedness. For example, Sierra Leone (place most impacted by Ebola) has very bad hospitals

International Migration

1) Economic Migrants – move from LIC to HIC or NEE. They can see the development gap through technology. Sometimes some migrants leave NEEs too. For example, computer engineers from India and doctors from Poland to UK.
2) Refugees – flee certain places due to persecution or disasters.
3) Remittances – when migrants send money back home

Question 10

What strategies are used to reduce the development gap?

Answer 10

Investment / Industrial Development
- Companies inject foreign direct investment (FDI) into local areas. e.g. Apple setting up factories in China due to cheap labour, which creates jobs for locals

International Aid

• Economic Development: large-scale power and transport schemes (e.g. DR Congo’s US$ 73 mill. hydroelectric dam)
• Social and Political Development: aid to make education better (e.g. Google’s One Laptop per Child project in S. America and Africa)

Intermediate Technology
- Technology that local areas can maintain (e.g. WaterAid’s Afridev hand pump provides clean water). This reduces illnesses so children go to school more, life expectancy increases …

Fair Trade
- Provides a regular income of an appropriate ammount

Debt Relief
- Sometimes LICs and HICs do ‘conservation swap’ (e.g. US paid part of Indonesia’s debt in return for Indonesia to conserve the Sumatran forests)

Microfinance Loans
- Locals borrow small amounts of moneys to kickstart their business. If enough villages improve, then the nation will develop. (e.g. Grameen Bank in Bangladesh loan $200 to women so they can check market prices before they go)

Question 11

Give an example of how the growth of tourism in Tunisia has helped to reduce the development gap

Answer 11

Tunisia is a popular tourism site due to the Mediterranean climate and its historic sites (it has 7 UNESCO World Heritage Sites). Also, it has a diverse physical landscape - Mediterranean beaches, Dorsal Mountains and the Saharan Desert.

How has tourism reduced the development gap?

• Jobs have been created by tourism.
• These jobs often have knock on effects (e.g. literacy rates have increased by 13% since 1985; there is greater equality for women, which is shown by the fact that school is now compulsory for girls; the average Tunisian income has 4x)

Why are the limitations of tourism within Tunisia?

• ‘Leakage’ of profits - international companies might keep some of the profits made in Tunisia. This limits the amount of money that is reinvested locally
• Terrorism – in 2015, there were two terrorist attacks aimed directly at tourists. As a result, EU governments have stated that it is no longer safe, so there is less foreign investment

Question 12

Where is Nigeria located and what is its importance, regionally and globally?

Answer 12

Country in West Africa, with its south coast on the Gulf of Guinea (part of the Atlantic Ocean)

Nigeria has the best economy in Africa.
Nigeria is estimated to be the fourth most populous country in the world by 2040 and is estimated to have a GDP of $4.2 trillion

Question 13

What is the social, cultural, environmental and political situation that Nigeria is currently experiencing?

Answer 13

Social and Cultural Context:

• Gained independence from Britain; previously it was a small tribal kingdom
• There are three main ethnic groups - two are Christian and one is Muslim

Environmental Context:

• Located in tropical Africa
• Tropical rainforest in the South
• Savanna grasslands in the North
• A lot of the vegetation has been replaced for agriculture

Political Context:

• Civil War (1967-70) caused several military dictatorships. This has changed to a stable democracy today
• Boko Haram in the north want to abolish democracy and use Islamic laws
• Ebola was eradicated efficiently due to good medical health care and planning

Question 14

What is Nigeria’s current economic situation like and how has it changed?

Answer 14

Current Economic Situation:

• the GDP has doubled in the last few years
• inequality is growing within Nigeria (most people are poor and there are a few people who work in the city with stable, well-paying jobs)

How is Nigeria’s economic situation changing? - it is changing from an agriculture-based economy to a industry-based economy due to urbanisation

• Many small business that were in the informal sector is now in the formal sector
• Nigeria has the 3rd largest film industry in the world
• Nigeria’s oil makes up about 14% of its GDP and 95% of its export

Question 15

What role has TNCs had in relation to the industrial development of Nigeria and what are its advantages and disadvantages?

Answer 15

Oil within Nigeria relies on TNCs (e.g. Shell) in Europe and America

• they built drilling platforms on oil fields in Niger Delta Region
• they linked pipelines from these oil fields to export terminals in the Gulf of Guinea
• the oil is shipped to the US and Europe, where it is refined

Advantages:

• Bring new investments
• Provide jobs, often at higher wages
• Have international links that bring access to world markets

Disadvantages:

• Take profits out of the country to pay shareholders or invest in other places
• They can exert political influence due to their power
• Wage levels in LICs and NEEs are much lower than workers for the same job in HICs

Question 16

How has Nigeria changed its political and trading relationship with the wider world?

Answer 16

Nigeria’s past relationship with Britain

• 1650, enslaved Nigerians and sent them to America and the Caribbean
• 1800s, Nigeria began to trade palm oil
• Late 19th Cent, became a colony of Britain
• Nigeria became independent, but remained trade partners

Development of what Nigeria trades
- Oil has replaced other natural commodities of trade

Influence of China on Nigeria now

• China is Nigeria’s main import partner
• China Railway Construction Corporation won a US$12 bill. contract to build a new railway in Nigeria
• A Chinese corporation has invested $10 billion in exploration and drilling in new oilfields in Nigeria

Question 17

What type of aid has Nigeria received and what are its impacts?

Answer 17

International Aid

• 60 million mosquito nets were distributed from 2009 to 2013 as part of an international aid project funded by the World Bank, IMF and US Government to eradicate malaria
• UK gives £300 million a year. Even though Nigeria is more developed, 60% of its population still lived under the poverty line

How has Nigeria used this aid?

• Nigeria wanted to increase the number of voters in their elections. 40 million people voted in 2011 compared to 35 million in its previous election
• Nigeria wanted the number of children who received an education to increase. Nigeria used £30 million to allow 480,000 more children to receive an educaiton

Question 18

How has Nigeria’s quality of life improved due to economic development?

Answer 18

How has quality of life in Nigeria improved?
- Over a long period, Nigeria’s HDI has improved significantly. However, today it is still ranked 152 out of 187 countries

How are the improvements connected with economic development?

• New jobs come with development, as people can pay for the things they need. Government also earns money through taxes
• But, the benefits of economic development are not equal. It changes from North and South; Urban and Rural Areas; Educated and Uneducated People

Question 19

How has economic development impacted the environment within Nigeria?

Answer 19

• Industrialisation leads to higher energy consumption. This means that the demand for fossil fuels have increased, which contributes to climate change.
• Urban sprawl leads to land and water pollution - lack of infrastructure means that a lot of Lagos’ sewage is dumped into the Lagoon - where a lot of squatter settlements are
• However, economic development does allow the country to provide long-term environmental protection. For example, by creating new sewage schemes within Lagos.

Question 20

How has the current UK economy changed?

Answer 20

Primary and Secondary industries are declining
(e.g. the number of coal mines declined from 3000 to 30 in the 21st Cent.)

Tertiary and Quaternary industries are increasing
(e.g. in 2011, 80% of the workforce worked in these industries)

Question 21

Why has the current UK economy changed?

Answer 21

Globalisation

• Factories have shut down in the UK and opened in LICs where costs are cheaper.
• The UK has a highly educated workforce (in 2013, nearly 50% of the young people in the UK entered university), which results in an increase in services and the quaternary sector

Deindustrialisation

• Mechanisation has occurred, which means that workers have been replaced for machines
• Many secondary industries pollute the environment. As the UK and the EU have strict laws for environmental pollution, this makes it expensive to make products in the UK

Government Policies

• Primary industries have declined due to laws and treaties (e.g. fishing is limited by quotas imposed by the EU)
• the UK government have invested in the “knowledge economy” rather than primary and secondary industries

Question 22

How is the UK moving towards a post-industrial economy?

Answer 22

The Knowledge Economy is increasing

• Information Technology: businesses that use computers and other hardware to store, process and use date to help governments and businesses
• Service Industries: businesses that do work for a customer and sometimes provide goods, but is not involved in manufacturing
• Finance: they provide services to do with money (e.g. accounting, money transfer, trading and credit)
• Research: they involve research and development, where ideas are transformed into workable products
• Science and Business Parks: business parks are purpose built areas of offices. science parks are often located near universities with many high-tech sites.

Question 23

What is the impact of industry on the physical environment?

Answer 23

Air Pollution
- Industries release lots of air pollution. They release sulphur dioxide and nitrogen oxides, which can cause acid rain. The release of carbon dioxide can cause climate change

Wastewater
- Waste water produced can pollute underground reservoirs of water and rivers, which can damage wildlife and ruin potential drinking water. (e.g. NE of England, salmon disappeared for many years form major rivers due to poor water quality)

Land Pollution
- Hazardous chemicals can leak onto the land and soil, which can cause soil pollution

Noise Pollution
- Factories are often very noisy and can disturb the local wildlife

Question 24

How has the car industry tried to become more environmentally friendly?

Answer 24

• Car companies are manufacturing electric and hybrid cars in response to consumer and government requests
• The amount of waste that are going into landfills are reducing. New technology is finding ways of disposing old cars. Previously, a lot of substances within cars were hard to recycle and batteries would often leak acid.
• The average carbon dioxide emission per car is reducing due to new technology developing better filters and engines that release less carbon dioxide

Question 25

What is the social and economic situation like in rural areas that have an increasing population?

Answer 25

Social

• Rural services (schools, churches and shops) that would otherwise close down keep running
• Older people often retire in these areas, which increases the average age
• Newcomers are often wealthy, which can raise local houseprices

Economic
- There is an increase in local businesses as newcomers begin to start their own

Question 26

What is the social and economic situation like in rural areas that have a decreasing population?

Answer 26

Social
- There is migration of people out of these areas, which means that services begin to close down

Economic
- The lack of people means that there are less businesses open. This can have a social knock-on effect, which is that people have to travel far to access shops

Question 27

What are the improvements and new developments of transport within the UK? - road and rail, port and airport infrastructure

Answer 27

Road and Rail Infrastructure

• Improve motorways by using flexible speed limits to reduce traffic. New road schemes to increase its capacity
• Plans for a new high-speed railway network to reduce pressure of roads, decrease journey times and bring econ. benefits to the Midlands and Northern England. However, many environmental groups object to it and the people that would live near to this railway

Port Infrastructure
- A new port on the Thames Estuary (near London) has opened to increase the number of large container ship imports, create 8000 jobs and reduce carbon emissions by reducing the transport distance of trucks

Airport Infrastructure - should Heathrow expand?

• Heathrow Expansion to help London compete with other world cities, to employ 76,000 people and to boost the UK economy by over £200 billion
• Against Heathrow Expansion as it will increase the emissions of the largest emitter in the UK, increase noise pollution and destroy one village and put two more under threat
• Manchester Expansion as less people will be impacted by noise and it would boost the N. England economy
• Against Manchester Expansion as the boosted economy would not be as impactful as if it were in London and emissions would still get worse overall

Question 28

What strategies are being used to reduce the differences between the North and the South?

Answer 28

1. Provide money as aid to business in assisted areas. For example, the BBC created MediaCityUK in Manchester and moved a lot of its offices there. This started the multiplier effect.
2. Improve transport infrastructure to link London to the major cities in the North
3. Devolution Measures - give more money to individual councils so that they can decide how they want to improve their city

Question 29

How does the UK play a major role around the world?

Answer 29

Language and Culture

• English is the main language of business around the world and used by many countries.
• There are certain British cultural brands that are global (e.g. football teams, actors, singers, etc.)

Trade

• The UK depends heavily on trade with other countries. It’s main trade partner in the EU is Germany and outside of the EU is the US.
• Many British companies and TNCs have branched out all over the world (e.g. Shell and Barclays Bank)

Electronic Communication
- The UK has an extensive electronic communication network linking the country to other parts of the world. The UK is linked to South America, Europe and Africa by underwater cables

Transport
- The UK is a major transport hub in the world and many of the world’s transport systems are connected to the UK. The UK has two international airports and huge freight ports around the country including Teesport and Thames Port. It also has an underground tunnel to connect the UK with mainland Europe.

Commonwealth
- The commonwealth includes 53 countries that are all linked together by history, culture, language and 3 shared values: democracy, human rights and rule of law

European Union
- The EU includes 27 countries that have common goals and close ties to one another. Many countries within the EU share a currency and have many rules that they must follow to remain part of it. The UK joined it in 1973.