2.4.2 developed, emerging and developing economies Flashcards
What are some indicators of growth? [3]
- GDP per capita
- Literacy and health
- Human Development Index (HDI)
What is GDP per capita?
The value of total GDP divided by the population of the country.
What are the limitations of GDP? [4]
- Does not give any indication of distribution of income, countries with similar GDP’s per capita may have different distributions which lead to different living standards
- GDP may need to be recalculated in terms of purchasing power, so that it can account for international price differences
- Large hidden economies, such as the black market, which are not accounted for in GDP
- Gives no indication of welfare
What information does consideration of education and health provide?
It can provide information about the country’s infrastructure and opportunities, as well as how successful government policies have been.
What was the Millennium Development Goal (MDG)?
To half the number in extreme poverty and hunger by 2015.
This goal has been met, since the proportion of people in poverty has halved and around 90% of children now have primary education, and almost 90% of people have access to improved water sources.
How can life expectancy be used to give information about education and health?
Example; Malawi has a life expectancy below the world average, which is closely linked to poor access to clean water (and other sanitation).
What can be indicators of education? [2]
The literacy rate and the proportion of the population who has attended primary school.
What can be an indicator of healthcare?
A country might consider how many doctors are available for every patient.
What are the components of HDI? [3]
- Education
- Life expectancy
- Standard of living
What does HDI do?
It measures economic and social welfare of countries over time.
What does the education component of HDI combine?
Statistics of the mean number of years of schooling and the expected years of schooling.
What is the range of the life expectancy component of HDI?
It uses a life expectancy range of 25 to 85 years.
Why is GDP no longer used as a measure of standard of living?
It fails to account for remittances and foreign aid, and so GNI is used now as it reflects average income per person.
What did average world HDI rise from between 1970 and 2010?
0.48 to 0.68
Why did HDI rise so much between 1970 and 2010?
Mainly due to growth of East Asia, the Pacific and South Asia.
What value of HDI indicates a high level of economic development?
A value close to 1, with a value close to 0 suggesting a low level of development.
What are the disadvantages of using HDI? [3]
- Does not consider how free people are politically, their human rights, gender equality, or cultural identity
- Does not take the environment into account, can be argued that this should be included to focus on human development more
- Does not consider the distribution of income, a country could have a high HDI but be very unequal and many can still be in poverty
What is the benefit of using HDI?
It allows for comparisons between countries to be made, based upon which countries are generally more developed than other countries. Provides a much broader comparison between countries than GDP does.
What are the characteristics of a developed economy? [8]
- Long life expectancies
- High income per capita
- High levels of education
- Slow population growth per year
- Low mortality rates
- Low birth rates
- Urban and city populations are large
- Dominant industrial sector and weaker agricultural sector
What are the characteristics of a developing economy? [11]
- Low life expectancies
- Low or middle incomes
- High mortality rates
- High dependency ratio
- Low GDP
- Fast population growth
- Low levels of education, which results in low levels of productivity
- Poor standard of living
- Poor nutrition, lack of access to clean, safe drinking water and a lack of sanitation
- Poor or absent health care provision
- Low savings rate
What are examples of emerging economies?
The BRIC economies are emerging markets, which are Brazil, Russia, India and China.
What are the characteristics of an emerging economy?
- Fast growth and recent industrialisation
- Moving away from agriculture
- Have significant influence in global affairs and all 4 BRIC nations are part of the G20
- Rely heavily on industry: manufactured and engineered goods make up a lot of their exports
- A lot of potential for innovation, particularly in renewable energy
- Seeing a considerable increase in demand for a higher standard of living
Where are the BRIC nations ranked for growth in renewable energy?
Brazi - 3rd
Russia - 5th
India - 6th
China - 1st
What is driving demand for higher standards of living in India and China?
The growing middle class, who are demanding more goods and services, such as mobile phones.
How can the average income in a country be measured?
By both the mean and the median.
