2B: The Changing Economic World Flashcards
what is an LIC?
a low income country
what is a NEE?
a country which is getting richer as their economy is progressing from the primary industry to the secondary industry
what is a HIC?
a high income country
what is the development gap?
the difference in standards of living and wellbeing between LICs and HICs
what is GDP?
the total value of goods and services a country produces in a year
what is Gross National Income (GNI)?
the total value of goods and services that people of that nationality produce in a year (GDP + money from people living abroad)
what is the Human Development Index (HDI)?
a number calculated using life expectancy, number of years of education and GNI
what are the limitations of GNI?
1) Doesn’t show variations that might exist (inequality) between the population especially between rural and urban areas.
2) It can neglect work that isn’t included in the calculation e.g. subsistence farming or informal sector work.
3) Ignores social development.
what is infant mortality?
The number of children who die before reaching 1 per 1000 babies born.
what is the limitation of using infant mortality as a measure of development?
In some LICs, not all infant deaths are recorded so data may be underestimated
what is the literacy rate?
The percentage of population over the age of 15 who can read and write.
what is the limitation of using the literacy rate as a measure of development?
Difficult to be accurate, particularly in rural areas, conflict zones or squatter settlements
what is life expectancy?
The average lifespan of someone born in that country.
what is the limitation of using life expectancy as a measure of development?
In countries, with high infant mortality, the life expectancy will be far higher than the figure suggests.
what is birth rate?
The number of live births per 1000 people per year
what is the limitation of using birth rate as a measure of developemnt?
NONE: This is a reliable measure. As a country develops, women are likely to become educated and want a career rather than staying at home. They marry later and have fewer children.
what is death rate?
The number of deaths per 1000 people per year
what is the limitation of using death rate as a measure of development?
HICs like the UK tend to have older populations and death rates will be high. LICs like Bangladesh, tend to have more young people, so the death rate may be lower
what are the physical causes of uneven development?
1) People in poorer countries are disproportionately affected by climate change and increasingly vulnerable to climate related hazards. Extreme weather and Natural Hazards can slow development and it is costly to repair damaged infrastructure. E.g. Haiti
2) Landlocked countries may find trade difficult which is important for economic growth.
what are the economic causes of uneven development?
1) Government corruption: leaders steal a country’s money which creates lack of investment in infrastructure (building of roads, railways and water networks) and public services such as education and health.
2) LICs are dependent on selling primary products such as minerals and agricultural products. This makes them more vulnerable to dramatic changes in the international prices for raw materials. Processing, which adds value, takes place in the richer developed countries. In this way, the rich countries get richer and the poorer countries are not able to develop.
3) International organisations like the World Trade Organisation have been criticised for not doing more to establish fair terms of global trade.
what are the historical causes of uneven development?
Colonialism: Many countries in Asia, S. America and Africa have spent a lot of time and money on civil wars and political struggles for power since being made separate from European superpowers. Civil war makes countries poor as, on average, civil war reduces GDP by 2.3% per year.
what are the consequences of uneven development?
rich countries are healthier, richer and experience higher levels of immigration
what is short term aid?
emergency help usually in response to a natural disaster
what is long term aid?
substantial aid that seeks to improve resilience
what is bilateral aid?
aid from one country to another (which is often tied)
what is multilateral aid?
when richer governments give money to an international organisation, which redistributes money as aid to poorer countries
what is tied aid?
aid that is given with certain conditions
what is voluntary aid?
money donated by the general public in richer countries and distributed by NGOs (non-governmental organisations)
what is immediate technology?
sustainable technology that is suitable for the local environment and must not put people out of work
what is top down aid?
aid that is well finances but doesn’t consider the needs of the locals
what is bottom up aid?
aid on a small scale which involves locals in the decision making
what are the pros and cons of aid?
PROS: improves literacy rates and infrastructure
CONS: can be wasted by corrupt governments or countries can become overly reliant on it
How does investment and industrial development help to reduce the development gap?
1) Governments, organisations of companies invest in big projects.
2) Provides employment and income leading to development.
3) TNCs from NEEs and HICs inject FDI leading to multiplier effect
describe the multiplier effect
1) factory generates employment and taxes for the government
2) money is invested in infrastructure
3) the population becomes better educates and healthier
4) opportunity for new investment etc.
what are the pros and cons of investment and industrial development?
PROS:
1) Leads to better access to finance, technology and expertise (technology transfer)
2) Help countries move from primary products to manufactured goods which leads to more profit
CONS:
1) Investment can come with strings attached that country’s will need to comply with
what is debt relief?
when richer countries write off poorer countries debt if certain conditions are met
what are conservation swaps?
when richer countries write off some of the debt of poorer counties if the poorer county agrees to protect its environment
what are the pros and cons of debt relief?
PROS: Means more money can be spent on development.
CONS: Locals might not always get a say. Some aid can be tied under condition from donor country.
what is a microfinance loan?
a small amount of money lent at a very low interest to people, so they can set up a business without being swamped by debt
what are the pros and cons of microfinance loans?
PROS: Loans enable people to begin their own businesses
CONS: Its not clear they can reduce poverty on a large scale.
how does fair trade reduce the development gap?
1) minimum price means that the farmer receives a fair amount stopping exploitation
2) farmers have more money to spend in their local economy
3) premium on the produce is invested in infrastructure
4) fair trade trains farmers on sustainable farming
what are the pros and cons of fair trade?
PROS: Farmers paid fairly so they can spend money in the local economy and help develop schools and health centres.
CONS: Only a tiny proportion of the extra money reaches producers and it increases the cost of the products, so consumers might not buy fair trade.
why do tourists visit tunisia?
1) Mediterranean climate attracts sun seeking Brits and other Europeans
2) Tunisia’s coastline is close to Europe and t is French Speaking
3) It contains seven UNESCO world heritage sites
4) Landscapes (Sahara Desert, Coastline, and Dorsal Mountains)
what are the benefits of tourism in Tunisia?
1) In 1970s listed as LIC but now one of the wealthiest countries in Africa with increasing life expectancy, literacy rates, jobs and gender equality
2) Since 1960 life expectancy has risen from 42 to 75
3) Income of Tunisians quadrupled in 1970s
4) Literacy rated increased from 66% to 79% since 1995 as families can now afford to send their children to school and education is now compulsory for girls
5) In 2009, tourism provided 370,000 jobs
6) Multiplier effects helped souks and farmers
how many jobs did tourism in Tunisia provide in 2009?
370,000
how has the life expectancy in Tunisia changes since the 1960s?
risen from 42 to 75
what happened to the income of Tunisians in the 1970s?
it quadrupled
how has the literacy rate changed in Tunisia since 1995?
increased from 66% to 79%
what are the concerns about tourism in Tunisia?
1) Pollution of the environment, especially beaches
2) Leakage of profits as holiday companies keep a large % of the profits, which limits how much money is in the local economy.
3) Tourists do not always spend much money outside their resorts.
4) Tourism is vulnerable to recession (2009 - ) and terrorism (2015). Some countries say that Tunisia is no longer a safe country to visit
when did Tunisia experience a terrorist attack?
2015
what are the three causes of economic change in the UK?
1) deindustrialisation and decline of traditional industrial base
2) globalisation
3) government policies
describe deindustrialisation and decline of traditional industrial base in the UK
1) Less manufacturing, more services and quaternary industries
2) Machines and technology replaced people
3) Lack of investment, high labour costs and outdated machinery means UK goods expensive
describe how the areas of employment have changes in the UK since 1800
1800: 1) Primary 75% 2) Secondary 15% 3) Tertiary 10% NOW: 1) Primary 2% 2) Secondary 16% 3) Tertiary 73% 4) Quaternary 9%
describe how globalisation has caused economic change in the UK
1) increase in quaternary sector due to foreign investment
2) less reliance on the primary and secondary sectors as goods can be imported
3) outsourcing of jobs means loss of jobs and lower wages for people still working in the UK
what was the government policy in the UK 1945-1979?
the government created state run industries and spent money supporting declining UK industries- ineffective due to outdated equipment and too many employees
what was the government policy in the UK 1979-2010?
state run industries were sold off to private shareholders making it more competitive. Derelict deindustrialised areas were transformed into financial centres and retail outlets
what was the government policy in the UK 2010+?
the government aimed to rebalance the economy by relying less on the tertiary sector and rebuilding the manufacturing sector. It invested more in manufacturing, improved transport infrastructure, encouraged global firms to locate within the UK and giving easier access to loans
describe the Cambridge science park
1) A major quaternary industry on the outskirts.
2) Good transport access to the A14 and M11.
3) A good location for sourcing highly educated workers from Cambridge University.
Staff benefit from attractive working conditions.
4) Attracts clusters of related high-tech businesses.
how many jobs do science parks provide in the UK?
75,000
how many science parks are there in the UK?
over 100
what are the negative impacts of the car industry on the physical environment?
1) Negative visual impact
2) Air and water pollution
3) Soil degradation
4) Landfill
5) Impacts of roads
how is Nissan managed sustainably?
1) Produces 500,000 cars per year (third of all cars produced in the UK
2) 7% of energy used is from windfarms so less CO2 emissions
3) More electric and hybrid cars built (such as new Nissan LEAF)
4) Less electricity and water used
what are the economic impacts of population decline in the Outer Hebrides?
1) Many shops close due to population decline
2) Current infrastructure is unable to support the scale of tourism needed to provide an alternative source of income (between 2007 – 2014; there has been a 27% increase in visitors)
3) Sheep farming is main economic activity but only provides enough work for 2 days a week
what are the social impacts of population decline in the Outer Hebrides?
1) Number of school children will decline and may result in school closures
2) Brain drain – young people are moving away
3) Increasingly ageing population, with fewer young people may lead to care issues in the future
what are the social impacts of population growth in Hustpierpoint?
1) Rising house prices have caused tensions in villages.
2) Villages are unpopulated during the day causing loss of identity.
3) Resentment towards poor migrant communities.
4) Increased traffic on narrow country roads
what are the economic impacts of population growth in Hustpierpoint?
1) Lack of affordable housing for local first time buyers.
2) Sales of farmland has increased rural unemployment.
3) Influx of poor migrants puts pressures on local services.
how do local employment partnerships (LEPs) help close the North South divide?
LEPs encourage companies to invest in an area which creates jobs and boosts the local economy
how do enterprise zones help close the North South divide?
They encourage the establishment of new businesses, supported by the government, by…
1) Providing a business rate discount
2) Ensuring the provision of superfast broadband
3) Giving financial allowances for plants and machinery
4) Simplifying planning regulations to speed up the establishment of new businesses
how do assisted areas help close the North South divide?
Assisted areas receive grants and loans from the government for industrial development
describe the London Gateway
1) opened in 2013
2) can accommodate the largest container ships in the world
3) employs 2,000 people
4) 6,000 people employed in the logistics park next to it
describe the HS2
1) planned to start running in 2026
2) will cost £40bn
3) run from London to Sheffield and Leeds to Manchester
4) will create thousands of jobs in the Midlands and Northern England, where deindustrialisation has led to a loss of jobs
how many enterprise cones were establishes in the North in 2011?
24
describe heathrow airport
1) UK’s busiest airport (plane takes off every 45s)
2) recommended 3rd runway to be built
what are the UK’s trade links?
1) 50% of the UK’s exports go to EU countries
2) 50% go to non-EU countries such as the USA and China
describe UK involvement in the commonwealth
1) These are 53 states across the world that were part of our colonial history and they make up the commonwealth
2) Many expats live there (Brits who live abroad)
3) It promotes democracy, good governance, human rights and economic development as the UK trades with its previous colonies
describe UK involvement in the EU
1) joined the EU in 1973 and opted to leave in 2016.
2) About 50% of exports and imports are to the EU
3) European Structural and Investment funds for disadvantaged regions in the UK
suggest how micro finance loans can help to reduce the development gap
1) people are given small loans appropriate to their needs
2) microloans work by allowing subsistence farmers or those in the informal sector to escape poverty
3) loans are not a handout so people feel empowered
