3.2.2 Section B: The Changing Economic World - Development Flashcards
1
Q
What is development?
A
development means positive change that makes things better
as a country develops it usually means that people’s standard of living and quality of life will improve
2
Q
Different factors that affect a country’s level and speed of development:
A
environmental factors such as natural hazards e.g. earthquakes
economic factors such as trade and debt
social factors such as access to safe water and education
political factors such as a state government or civil war
3
Q
Development gap:
A
the difference in standards of living between the world’s HIC’s, LIC’s and NEE’s
4
Q
Gross National Income (GNI):
A
- wealth and income can be used to describe a country’s level of economic development
- a common measure used by the World Bank
- GNI is the total value of goods and services produced by a country, plus money earned from and to other countries
- is expressed as per head (per Capita) of the population
- the World Bank uses 4 levels of different levels of income to divide the countries of the world into: high, upper middle, lower middle, low
- the UK, most of Europe, North America, Australia, Argentina and Japan are all HICs
- not all LICs are in Africa
- some countries may seem to have a high GNI as they are relatively wealthy and have a small population - doesn’t always mean that their citizens enjoy a good quality of life
- some countries have begun of experience higher rates of economic development with a rapid growth of industry
- known as NEEs e.g. Brazil, Russia, India, China, and South Africa (BRICS countries) and the MINT countries (Malaysia, Indonesia, Nigeria and Turkey)
5
Q
What is the HDI?
A
- devised by the UN, HDI links wealth to health and education
- it aims to show a country’s economic growth
- it is a social measure
6
Q
What measures are used by the HDI?
A
- life expectancy at birth
- number of yrs of education
- GNI per capita
7
Q
How is HDI expressed?
A
HDI is expressed in values of 0-1 where 1 is the highest - this enable countries to be ranked
8
Q
What were the top 3 countries in HDI in 2014?
A
highest ranked country in 2014 was Norway (0.944), followed by Australia (0.935) and then Switzerland (0.930)
9
Q
What place was the UK in terms of HDI in 2014?
A
- in 2014 UK was ranked 14th (0.930)
10
Q
What was the lowest ranked country in 2014 in terms of HDI?
A
lowest ranked country was Niger (188th) with a HDI of (0.348)
11
Q
Where were the top 10 lowest ranked countries in terms of HDI all found in 2014?
A
the lowest ranked 10 countries were all in Africa
12
Q
Factors that may limit the usefulness of social and economic measures of development:
A
- a single measure of development can give a false picture, and it gives the average for the whole country which can skew statistics
- data could be out of date or hard to collect
- data may be unreliable (infant mortality rate is way higher than the figures given by some countries)
- focus on certain aspects may not take into account subsistence or informal economy which are important in many countries
- government corruption may mean that data is unreliable
- in many countries the top 10% may own 80% of the countries wealth
- wealth may also be concentrated in cities rather than rural areas
13
Q
How useful is the birth rate for measuring development?
A
- a reliable measure
- as a country develops women are more likely to become educated and have a career rather than staying at home
- they may marry later and have fewer children
14
Q
How useful is the death rate for measuring development?
A
- a less reliable measure
- developing countries may have proportionally lower death rates than developed countries as there may be proportionally more young people
15
Q
How useful is the infant mortality rate for measuring development?
A
useful measure of a country’s healthcare system
16
Q
How useful is knowing the number of doctors per 1000 people for measuring development?
A
indicates how much money a country has for medical services
17
Q
How useful is the literacy rate for measuring development?
A
- shows whether a country has a good education system
18
Q
How useful is the % of people who of access to clean water for measuring development?
A
- shows a country has a modern infrastructure such as dams, reservoirs and water treatment plans
19
Q
What sort of indicators are generally more useful?
A
an indicator with several variable e.g. the Human Development Index (HDI) or the Physical Quality of LIfe Index (PQLI)
20
Q
How can we measure quality of life?
A
- economic and social measures use broad statistics to measure standard of living for whole countries - they cannot give an accurate measure for an individuals quality of life
- a good quality of life will mean different things in different countries e.g. safety and security, freedom, right to vote, women’s rights, happiness etc.
21
Q
How can we compare people’s quality of life and standard of living?
A
- people in different countries have different ideas of what affects their quality of life
- refugees fleeing war-torn Syria in 2016 to seek sanctuary in Europe - they have virtually nothing but are at least relatively safe
- very difficult to use social indictors to compare different countries’ level of development
22
Q
Standard of living:
A
the level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area
23
Q
Quality of life:
A
an individuals perception of their position in life in the context of the culture and value systems in which they live, and in relation to their goals, expectations, standards and concerns
24
Q
What does a demographic transition model show?
A
- the changes over time in the population of a country
25
What is the demographic transition model based on?
- the changes that took place in Western countries such as the UK
26
What is a part of and what isn't a part of the demographic transition model (DTM)?
- the gap between birth rate and death rate (natural change) is included on the DTM - is usually shows the natural increase in population but in Stage 1 and Stage 5 of the DTM natural decrease happens
- the total population of a country responds to variations in birth and death rates (natural change) - it will also be affects by migration, immigration and emigration which is not part of the DTM
27
What links the demographic transition model with development?
- as a country becomes more developed its population characteristics change - the DTM graph shows the general increase of development from stage 1 to 5
28
Examples of areas in stage 1 of the demographic transition model:
- traditional rainforest tribes
- indigenous people living in isolation - in parts of Indonesia, Malaysia and Brazil small groups of people live separately with little contact with the outside world, they have high birth and death rates
29
Characteristics of stage 1 of the demographic transition model:
- high birth rate
- high death rate
- both fluctuate because of disease, famine and war
- population is fairly stable
30
Examples of areas in stage 2 of the demographic transition model:
- Afghanistan - One of the poorest and least developed countries in the world. Its birth rate is 32 per 1000 and its death rate is 6.4 per 1000. About 60% of the population are farmers who often need children to support them in the fields and tending livestock
31
Characteristics of stage 2 of the demographic transition model:
- death rate decreases
- birth rate remains high
- population grows
32
Examples of areas in stage 3 of the demographic transition model:
- most countries at lesser stages of development e.g. India, Kenya, Brazil etc.
- Nigeria - An NEE experiencing economic growth
- the death rate is much lower than the birth rate
- the country’s population is growing rapidly
33
Characteristics of stage 3 of the demographic transition model:
- birth rate drops rapidly
- death rate continues to decrease but more slowly
- population still continues to grow but not quite as fast
34
Examples of areas in stage 4 of the demographic transition model:
- most countries at further stages of development e.g. USA, France, UK
- USA - The USA is one of the most developed countries in the world. Good quality health means death rates are low (8.2 per 1000). Women tend to have small families, choosing to study and follow careers. Therefore, birth rate is low (12.4 per 1000). Population growth is mainly due to immigration
35
Characteristics of stage 4 of the demographic transition model:
- low birth rate
- low death rate
- birth rate tends to fluctuate depending on the economic situation
36
Examples of areas in stage 5 of the demographic transition model:
- Italy, Germany and Japan
- Germany - Germany is a well-developed country experiencing population decline as death rate exceeds birth rate. The birth rate is 9.4 per 1000, one of the lowest in the world. Women often have careers and few children. Germany’s death rate (11.5 per 1000) will continue to rise.
37
Characteristics of stage 5 of the demographic transition model:
- birth rate very low and falls below death rate
- death rate increases slightly because of ageing population
- total populations starts to decrease
38
How can a falling birth rate reflect increased economic development?
a falling birth reflects increased economic development as women may tend to have smaller families choosing to study and follow their career paths
39
How can an increased death rate reflect increased economic development?
- an increased death rate reflects high levels of development because it may me due to an ageing population which shows people living longer due to a more developed healthcare systems and higher standard of living and quality of life
40
What are the negative impacts of Germany being in Stage 5 of the demographic transition model?
- well-developed country experience population decline as death rate exceeds birth rate - the birth rate is 8.2/1000 which is the lowest in the world
- women have careers and fewer children
- with an ageing population Germany’s death rate (11.2/1000) will continue tor rise
41
What does a population pyramid show?
- is a type of graph which shows the % of number of males and females in each age group - how many ages 0-4yrs, 5-9yrs etc.
42
What does a population pyramid mean if it is wide at the bottom?
it means that there is a high proportion of young people in the population
43
What may shorter bars on a population pyramid show?
- shorter bars could indicate high death rate intros certain age groups - perhaps through war or famine
44
Historical causes of uneven development:
- many richer countries have long histories of industrial and economic development
- whilst some in Asia, South America, China, Malaysia and Mexico have recently emerged as industrialised nations
- many other countries are yet to experience economic growth
45
How is colonialism a historical cause of uneven development?
- by the end of the 19th C much of Africa and parts of South America and Asia were divided up between the Europeans superpowers
- UK, Germany, Spain, France etc. had powerful empires and colonies
- since 1950 former Europeans colonies have gained independence - in many cases, this has been difficult resulting in civil wars and political struggles for power
- money has been spent on armament and some governments have been corrupted
46
How is trade an economic causes of uneven development?
- North America and Europe dominate world trade
- most of the world’s trade is between richer countries
- important of Asia has increased as it includes Japan and NEEs e.g. India and China
- rich countries and large TNCs have a lot of power
- they want to pay as little as possible for their raw materials, many of which come from LICs
- there is often more supply than demand for raw materials - this keeps prices low
- processing (which adds value) takes place in HICs - this means rich countries get richer and poor countries aren't able to develop
- LICs and NEEs have traditionally exported primary products such as minerals and agriculture products
- in the last 20yrs many of these countries have developed manufacturing
- manufactured products now make up about 80% of exports of NEEs
- some countries have trade surpluses, while others have trade deficits
- trade deficits often lead to a ‘debt trap’ that makes further development difficult
47
In Zambia what % does copper account for for its total value of exports?
in Zambia copper accounts for over 60% of the total value of exports
48
What are Zambia’s main exports?
- copper
- sugar
- tobacco
- gemstones
- cotton
49
Who is Zambia’s main trading partners?
its main trading partner is Switzerland (45% of total exports)
50
How has the price for copper changed?
the price for copper has fluctuated a lot since 2000
51
What is the HDI of Zambia?
with a HDI of 0.39 Zambia is described as having a low human development
52
What are the physical causes of uneven development?
- geographical location
- diseases
- weather conditions
- lack of safe water
53
How is geographical location a physical cause of uneven development?
- most landlocked countries on Earth are in Africa
- with no access to seas country cut off from seaborne trade which is important for development
54
How are diseases a physical cause of uneven development?
- Tropical Africa, South America and Asia have more climate related diseases and pests (mosquitoes can spread malaria) that cooler parts of the world don’t have
- diseases effects the ability of country’s population to work
55
How are weather conditions a physical cause of uneven development?
- extreme weather, such as cyclones, droughts of floods, often hit Tropical regions - Africa in particularly is badly affected
- extreme weather season can slow development and it can be costly to repair damaged infrastructure
56
How is a lack of safe water a physical cause of uneven development?
- the lack of adequate supplies of safe water us a barrier to economic development
- many countries lack the money to develop water storage and distribution systems
- clean water is essential to ensure a good health and enable people to work effectively
- people spend several hours a day asking to collect water
- drought affects many of the world’s poorer countries, particularly in Africa
- poor irrigation limits the development of commercial farming
57
What are the consequences of uneven development?
- disparities in health
- disparities in wealth
- International migration
58
Immigrant:
a person who moves into a country
59
Emigrant:
a person who moves out of their country
60
Refugee:
a person forces to move from their country of origin as a result of civil war or a natural disaster such as an earthquake
61
What has happened to Syria?
a country in the Middle East that has been torn apart by civil war
62
What was Syria like the yr before civil war broke out?
- in 2010 Syria was moderately wealthy, depending upon oil and agriculture - accounted for approx. half the country's GDP
- 25% of population worked in a agriculture, living off the land and enjoying a modest standard of living
63
When did the Syrian civil war start?
- has been raging since 2011
64
By March 2021 how many people did the UN estimate had died in Syrian civil war and how many had fled the country and what % of the world’s refugees does this represent?
- 594,000 people had died
- 6.6. mn people fled the country - accounting for 25% of the world’s refugees
65
What % of people live below the poverty line in Syria and what does this mean?
80% - means they earn less than US$1 per day and 9.3mnn Syrians don't have enough food
66
How did Syria’s HDI change from before the civil war to now?
- 109th in 2010
- 151st in 2019
67
What is the economic impact of the civil war in Syria and what has this forced many Syrians to do?
unemployment rate of 55% or more - forced many Syrians to leave Syria and to find employment and a better way of life
68
By 2020 how many Syrians had sought refuge and where had they done this primarily?
- 6.6 mn and primarily in Lebanon, Jordan, Egypt and Turkey (currently the largest host community for Syrian refugees)
- in Lebanon there are no formal refugee camps - over 1 mn Syrians live in crowded temporary apartments
69
By 2021 how many Syrians had settled in Europe?
- 1000s of Syrians had settles in Europe, mainly in Germany (800,000) and Sweden (190,000)
- By 2021 approx. 20,000 Syrians were resettled in the UK
70
Benefits of economic migrants to the UK (host country):
- UK has long history of accepting migrants from all over the world
- UK known for its tolerant approach and many parts of the UK benefit from being multicultural
- most migrants pay tax - good for the economy
- migrants prepared to work hard, often during manual jobs such as working on farms
71
Negatives of economic migrants to the UK (host country):
- since 2004 over 1.5 mn economic migrants have moved to the UK - 2/3 are Polish
- unemployment rate in Poland is over 10% and can earn up to 5x much in UK - money often sent home to friends and relatives - remittance payment
- migrants can put pressure on services such as health and education
72
What is the Gini Coefficient?
a measure of statistical dispersion intended to represent the income inequality or the wealth inequality within a nation or a social group
73
How did Nigeria get ‘promoted’?
- newfound trading has helped Nigeria get ‘promoted’ from an LIC to NEE status
- however, wealth is not distributed evenly across the nation
74
Gini Capacities:
- studied using the Gini Coefficient
- ratio of values evenly across the nation
- 0 means wealth is evenly distributed (everyone has the same income)
- 1.0 means all the income in the nation controlled by one person
75
What is a global scale impact on uneven development on LICs?
- LIC’s become dependent on HIC’s and some NEE’s for aid
- many LIC’s had to borrow money from the World Bank - become in debt
76
In LIC’s what is the main cause of death from children under the age of 5?
childbirth
77
In LICS’s how many children die under 15?
4 in 10 children
78
In LIC’s how many people die over the age of 70?
2 in 10 people
79
What are the main causes of death in LIC’s?
- communicable diseases - infectious diseases e.g. lung infections + malaria account for 1/3 of deaths
80
What are the main causes of death in HIC’s?
- chronic diseases + cancer + dementia + diabetes
81
What is the only main infectious cause of death in HIC’s?
lung infections
82
Which age group has the most deaths in HIC’s?
7 in 10 deaths in people over the age of 70
83
How many people die under the age of 15 in HIC’s?
1 in 100 people
84
What is malaria?
malaria is a life threatening disease caused by parasites transmitted to people by infected mosquitoes
85
Where is the highest conc. of malaria cases found?
Central Africa
86
In 2019 how many deaths did malaria cause in Africa?
- 490,00 deaths mostly among African children - accounts for 90% of malaria deaths worldwide
- don't have as much access to vaccinations + medication to prevent malaria unlike HIC’s
87
How is the climate in Africa suited for malaria?
Tropical climate allows malarial mosquitoes to thrive
88
Top down development:
- tends to be large scale projects with high inputs from governments and global institutions such as IMF and TNC
- based on the idea that the benefits will ‘trickle down’ through the economy from the top so everyone will benefit
89
Bottom up development:
- small-scale
- it is community/individual level development
- the idea of bottom up development is that the benefits will grow from the bottom
- if people have more money, they will spend more money in the local economy and others will benefit too
90
How to reduce the development gap:
- debt relief
- micro finance
- economic investment
- trade
- intermediate technology
- industrial development
- aid
- tourism
91
Debt relief:
- forgiving a debt (of a country) in part or total i.e. writing it off
- means the country will have more money to develop rather than pay back the debt
92
How have poor countries built up debt?
- many of world’s poorest countries built up debt in 1970s and 1980s
- led to a debt crisis
- many poor countries borrowed money to develop their economies by investing in industry, manufacturing and infrastructure
- low commodity prices reduced the value of their exported and high oil prices increased the price of imports
- both these factors increased the debt of poor countries
93
What are the HIPCs?
- the highly indebted poor countries (HIPCs) are the 39 countries with the highest level of poverty and debt
- unable to repay their debt and high level of interest
94
By 2020 how many HIPCs were receiving full debt relief and what was the total amount of debt relief for the the HIPCs?
- 37 of the HIPCs and met the certain conditions and were receiving full debt relief from the IMF
- total amount of debt relief for all HIPCs is approx US$7bn
95
What are the two countries yet to satisfy the terms and receive debt relief?
- Eritrea
- Sudan
96
How much debt do African HIPCs still have?
- despite debt relief African HIPCs still have a debt of over US$350bn and are unlikely to ever repay it
97
How much debt did Zambia have cancelled and what did this allow Zambia to do (debt relief)?
- Zambia had $4 bn of debt cancelled in 2005
- in 2006 the country had enough money to start a free healthcare scheme for millions of people living in rural areas
98
What did the worlds richest countries decide to do in 2005 (G8)?
- To cancel the debts of many HIPCs. To qualify the country’s had to:
- demonstrate they could manage their own finances
- show there was no corruption in their government
- agree to spend the saved money on education, healthcare and reducing poverty
99
Disadvantages of country’s borrowing money from other country’s:
- 1960 - 1980 some HICs loaned LICs huge amounts of money to develop their country’s
- countries such as Laos borrowed money to build a dam and will use the hydroelectric power from the dam to pay back the loan and increase its GNI
- in Indonesia there was a World Bank funded project for roads, power stations and ports, but lots of money went missing through corruption
100
Advantages of debt relief:
means the country will have more money to develop rather than pay back the debt
101
Disadvantages of debt relief:
- debt relief could be seen as a reward to countries that lack financial discipline and doesn't give the ‘good guys’ anything
- debt relief comes with tied and complex conditions
102
How does debt relief reduce the development gap?
- means the country will have more money to develop rather than pay back the debt
- debt relief can help poorer countries invest money in development projects e.g. industry resources, infrastructure etc.
- by cancelling debts some countries have used the money saved to improve QoL for their people
103
What has Tanzania been able to provide due to debt relief?
in Tanzania free education is now available resulting in a 66% increase in school attendance
104
To how many people has Uganda been able to provide safe water due to debt relief?
- in Uganda government has spent money to provide safe water to over 2mn
105
Microfinance:
- the provision of financial help (mainly money) to small businesses and private enterprises which do not have access to banking services
- the loans enable people to start their own business or develop their business and become financially independent
106
When was Grameen bank set up (microfinance)?
- set up in Bangladesh in 1976
- name comes from Sanskrit word for ‘village’
107
Why was the Grameen bank founded (microfinance)?
- founded to help local people, especially women, use their skills to develop small businesses
- borrowers have a share in the ownership of the bank, so there is a good rate of repayment
108
What are loans from the Grameen bank generally like (microfinance)?
loans often less than US$100 with low interest
109
By 2017 how many branches did the Grameen bank have, how much money had it lent and to how many members (microfinance)?
- 2,600 branches
- lent US$12.5bn+ to 9mn+ members
110
What % of Grameen’s bans loans are provided to women and what do they allow women to do (microfinance)?
- 97%
- allow millions of women to lift themselves and their families out of poverty
111
What does the Grameen bank do in Bangladesh (microfinance)?
well-known provider to phones to women in Bangladesh
112
How much money does the Grameen bank lend to women in Bangladesh and what does this allow them to do (microfinance)?
- the bank lends $200 to village women to buy a mobile phone
- phones help people to check prices before they go to market
- can keep in touch with relatives
- receive health advice
- other villagers then pay her for the use of it
- they might use it to check the price of items at markets in surrounding villages or talk to family how have moved to the city
113
How many people has the Grameen bank lent money to and how has this helped reduce the development gap (microfinance)?
- it has lent money to 9 mn people, 97% of whom are women
- improved the role of women in many communities
- the loans can play a crucial part in kick-starting development at a local level
- if enough villagers are helped then, in time, a whole country can develop
114
Negatives of schemes that have been based of Grameen bank mode (microfinance):
- money loaned isn't always used for business
- loans often went to less poor because of emphasis on repayment
- interest rates have generally risen, making it difficult to repay the loan
- it has limited the effect on empowering women, as husbands often refuse to repay loans, even if they were taken out in their wife’s name
115
Why are microfinance loans needed?
- subsistence farmers find it hard to escape poverty
- they only grow enough food for their own needs, rather than selling it
- the seeds they use do not always yield good enough crops, the soil they use might not be fertile
- Microfinance loans can help to provide farmers with cash to escape the poverty cycle
116
Advantages of microfinance loans:
- Microfinance loans help to provide subsistence farmers with the cash to escape the poverty cycle
- works well on a small, local level
- when compared to charitable aid, it can be seen as better as the poor feel they are able to stand on their own two feet and provide for themselves, rather than being dependent on others
117
Disadvantages of microfinance loans:
- Microfinance loans must be paid back
- the impact Microfinance loans have on a larger scale in unclear
118
How do microfinance loans reduce the development gap?
allow communities to gain independence and develop their businesses in turn slowly helping the whole country develop
119
Economic Investment:
the action or process of investing money for profit - usually from a HIC to an LIC
120
Foreign Direct Investment:
when TNC’s produce goods all around the world and the money invested into other countries is called FDI
121
How many Chinese companies have invested how much into Africa and in what?
- more than 2000 Chinese companies have invested billions of dollars in Africa, mainly in energy, mining, construction and manufacturing
122
What has Chinese investment in Africa led to?
- oed to new roads, bridges, stadiums and other projects being built all over Africa
- the building of the new headquarters of the African Union was funded entirely by China, at a cost of US$20mn
123
How many Chinese countries are operating in Africa and what are they involved in?
- approx. 10,000 Chinese companies are now operating in Africa, inc. 920 in Nigeria and 861 in Zambia
- many involved in massive infrastructure projects including railways, port developments, water supply (e.g. dam construction) and communications
124
Benefits of Chinese companies investing in Africa:
- new roads, stadiums and other projects have been built all over Africa
- employment opportunities and investment
125
Costs of Chinese companies investing in Africa:
argues that China is exploiting Africa’s resources to benefit China’s own economy
126
What do European chocolate companies invest in in the Ivory Coast (economic investment)?
European chocolate companies invest in cocoa bean production in Ivory Coast
127
What are the negatives of economic investment of European chocolate companies into the Ivory Coast (economic investment)?
- quality of life is poor for the growers and development progress is slow
- this is because bean prices are low
128
Where are Apple’s iPhones manufactured (economic investment)?
- Apple’s iPhones are invented in the USA but manufactured in Shenzhen, China
129
How much do skilled Chinese workers earn working for Apple and what has this allowed China to do (economic investment)?
- skilled Chinese workers earn around US$600 a month
- these kind of jobs have allowed China to develop rapidly
130
What Indian company has outreached to the UK and what is this helping to do (economic investment)?
- Chinese and Indian companies are buying companies in HICs
- Tata an Indian company Owens the Jaguar factory in Coventry
- This strategy is helping TNCs from NEEs increase their wealth
131
How is economic investment of Chinese companies into Ethiopia benefitting Ethiopia (economic investment)?
- some Chinese manufacturing companies have moved their factories to Ethiopia because Chinese workers are now very expensive
- Ethiopia’s GNI is now increasing as a result
132
Benefits of economic investment:
- new roads, stadiums and other projects have been built all over Africa
- employment opportunities and investment
133
Disadvantages of economic investment:
- argues that China is exploiting Africa’s resources to benefit China’s own economy
134
Why do TNCs want to locate in LICs and NEEs?
- gain access to new markets and customers to more people to buy their goods - their is an increasing ‘middle class’. with disposable income in these countries
- cheaper labour - TNCs relocate operations to countries where labour is cheaper so they get more profit - can lead to exploitation of workers
135
How does economic investment reduce the development gap?
- local people may be employed to build factories or offices
- people get jobs in the factories or offices
- a multiplier effect and develop
- this is where investment by a TNC can trigger further investment and help other local businesses thrive, creating work for even more people
- increasingly NEE’s have their own TNC’s that invest globally too - e.g. many Indian and Chinese TNC’s helping African LICs to develop
- can support a country’s development by providing employment, higher incomes and opportunities to invest in housing, education and infrastructure
- money can be invested in schools, roads, and services such as water and health care ——> the population becomes better educated and healthier ——> opportunities are created for new investments such as supply industries, shops and community facilities ——> a factory creates employment for its workers and money (taxes) for the government
136
Free trade:
when countries don't charge tariffs and quotas to restrict trade with each other
137
Benefits of free trade:
- has potential to benefit world poorest countries and help tor educe the development gap
138
Is trade fair?
- richer countries benefit more from world trade than poorer countries
- explains why sometimes the development gap is widening
139
How do richer countries protect their trade?
- Tariffs: Taxes paid on imports. They make imported goods more expensive and less attractive than home-produced goods.
- Quotas: Limits on the quantity of goods that can be imported. They are usually applied to primary products so mainly affect poorer countries.
140
What does WTO (World Trade Organisation) do?
aims to make trade easier and remove barriers
141
What is one of the main barriers to trade?
- one of main barriers to trade is agricultural subsidy - this is financial support from governments to help their farmers
- rich countries can afford to pay subsidies and so their products are cheaper than those produced by poorer countries - goes against free trade
142
Trading group:
trading groups are countries which have grouped together to increase the level of trade between them by curbing tariffs and discouraging trade with non-members - e.g. the EU
143
Advantages of poor countries joining a trading group:
- encourages trade between member countries
- richer countries cannot shop around for cheaper prices
- members can command a greater share of the market
- members are able to get higher prices for their goods
144
How much of the world’s cocoa comes from two West African countries (Côte d’Ivoire and Ghana) (trade)?
50%
145
Does the EU impose tariffs on imported cocoa beans (trade) from the two West African countries (trade)?
- no - to encourage processing and packaging (which adds value to the products) to be done in Europe
- much of this takes place in the Netherlands
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What does the EU impose tariffs on for cocoa trade with Côte d’Ivoire and Ghana (trade)?
- tariffs applied on imported cocoa powder, cocoa butter and cocoa paste
- discourages the development of processing industries in the LICs which grow the cocoa
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What does the WTO estimate the average EU tariff on cocoa powder chocolate and other foods is (trade)?
- 8% - however 51 of smallest producers of processed cocoa products no longer have to pay tariffs due to EU trade agreements
- large producers scubas Ghana hope to reach trade agreements with the EU to reduce or remove import tariffs on processed cocoa products
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Fair trade:
an international movement whereby agricultural producers in countries at lesser stages of development are paid a fair price for their produce - helps them to attain a reasonable standard of living
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What is the fair trade movement?
about farmers getting a faire price for goods produced in LICs e/g/ Coffe, cocoa and bananas, allowing them to provide for their families
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What do companies who want to sell products labelled as fair trade have to do?
have to pay producers a fair price and give farmers a price guarantee - this means that if the global price of the crop falls them the farmers still receive their regular income, protecting their quality of life
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What is the ‘social premium’ in fair-trade?
buyers also pay extra on top of the fair trade with a ‘social premium’ to help develop the are where the good comes from e.g. to build schools, education and health centres
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Examples of fair trade products:
- chocolate
- bananas
- wine
- clothing
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Example of fair trade product Divine Chocolate bars:
- Divine is the only Fair-trade company that is owned 44% by cocoa farmers
- while Fair-trade ensures farmers receive a better deal for their cocoa and additional income to invest in their community, company ownership gives farmers a share of Divine’s profits and a stronger voice in the cocoa industry
- have invested the Fair-trade premium in developing farming communities and farming skills - focusing particularly on water, health education and sanitation to improve standards of living
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What have many coffee farmers in eastern Uganda joined and what does it mean (fair trade)?
- 90% of small coffee farmers in eastern Uganda have joined the Gumutindo Coffee Cooperative to gain economies of scale
- this means making savings by buying and selling large amounts of coffee
- the farmers also earn extra income from the Fairtrade Premium - wouldn't be possible if individual farmers tried to sell their coffee
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How is doing the 1st state of processing the coffee bean helpful to farmers in LICs (fair trade)?
- 1sts take of processing the coffee bean done on the farm
- semi-processed beans are worth more to the farmer than unprocessed beans
- they are sent to a nearby warehouse for milling, before being packed for export abroad where the final roasting takes place
- processing of the coffee bean adds value to the products and increases the farmer’s income
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Benefits of fair trade:
- buyers also pay extra on top of the fair trade with a ‘social premium’ to help develop the are where the good comes from e.g. to build schools, education and health centres
- increasingly consumers in HICs are spending their money on Fair-trade foods and goods
- some consumers are happy to pay more knowing that a higher % of money is going back to some of the world’s poorest
- farmer gets all the money from the sale of the crop
- guarantees the farmer a price
- part of the price is invested in local community development projects
- in return, farmer must agree to farm in an environmentally way
- products gains a stronger position in the global market
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Disadvantages of fair trade:
- only tiny proportion of the extra money reaches the original producers - most of it still goes to retailer (shop)
- due to high cost many shoppers in HICs avoid buying them - limits the development of farms or villages that can be part of the scheme
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How does fair trade reduce the development gap?
- buyers also pay extra on top of the fair trade with a ‘social premium’ to help develop the are where the good comes from e.g. to build schools, education and health centres
- reduces the development gap by improving QoL for ordinary farmers
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Intermediate technology:
- includes tools, machines and systems that improve quality of life but are also simple to use, affordable to buy or build and are cheap to maintain
- sustainable technology that is appropriate to the needs, skills, knowledge and wealth of local people - must be suitable to the local environment and put people out of work
- the local community can take ownership of and is able to use relatively easily and without much cost
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Example of intermediate technologies (Afridev hand pump):
- Wateraid’s provision of the Afridev hand pump to help provide clean water
- although hand pump isn't very sophisticated, when a more advanced machine breaks it requires specialist engineers to fix, leaving local people without water
- in contrast, the Afridev pump can be quickly repaired by the community when it breaks down
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How has the Afridev hand pump (intermediate technology) helped contribute to Tanzania’s development?
- life expectancy increased due to fewer deaths from disease
- education has improved now children are missing fewer days of schooling due to illness
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Examples of intermediate technology (solar power in Nepal):
- solar cookers are used all over the world today, they focus the suns rays on the cooking pot - cheap to make and easy to transport
- solar powered LED light bulbs are used in parts of Nepal where the only other lighting options are polluting and dangerous kerosene lamps or wood fires
- allows people to work in their homes or businesses, and children to study after dark
- as a result, skills, income and industrial output can increase which helps to reduce the development gap
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Where is Adis Nifas located (intermediate technology)?
village of Adis Nifas is in northern Ethiopia, East Africa
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What intermediate technology was built in Adis Nifas, Ethiopia (intermediate technology)?
- a small dam (about 15m high and 300m long) - built to create a reservoir close to the village’s fields
- appropriate machinery and money were given and the village provided labour
- each family has been given an area of irrigated land with fruit trees
- elephant grass is grown to divide the fields and help prevent soil erosion
- irrigated land is now providing a permanent food supply for the villagers
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How can intermediate technology help reduce the development gap?
- Afridev hand pump in Tanzania
- life expectancy increased due to fewer deaths from disease
- education has improved now children are missing fewer days of schooling due to illness
- solar powered LED light bulbs are used in parts of Nepal where the only other lighting options are polluting and dangerous kerosene lamps or wood fires
- allows people to work in their homes or businesses, and children to study after dark
- as a result, skills, income and industrial output can increase which helps to reduce the development gap
- takes the form of small-scale projects often associated with agriculture, water or health - these involve local communities and can make a real difference in the quality of people’s lives
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Industrial development:
- the development of industry such as factories and infrastructure
- since many LICs only trade in primary products (raw materials and agricultural products) this leaves them vulnerable to poor economic growth
- these LICs don't always Geta good price which means they have insufficient money to import manufactured products from HICs
- development goals are harder to achieve without computers for schools and hospital equipment
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Why do primary products from LICs receive low prices (industrial development)?
- overproduction - if there is too much of a crop this pushes its price down
- import taxes - import tariffs means it costs a lot to sell to certain countries for LICs
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Advantages of industrial development:
- Manufactured secondary goods can be sold at a higher price and are less vulnerable to price fluctuations. Value is added to the primary product, increasing profits for manufacturing companies which governments can tax and spend on education and healthcare
- industrial development can lead to a multiplier effect whereby growth leads to more growth e.g. if people have jobs, they will have more money to spend, further boosting the economy
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Disadvantages of industrial development:
- industrial development was encouraged and now China is one of the fastest growing economies in the world however huge inequalities still exist - benefits might not “trickle down”
- some countries that encourage industrial development make themselves vulnerable to exploitation - the Rana Plaza factory in Bangladesh and poor working conditions in garment factories worldwide are evidence of poor considerations of safety for workers
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How was China able to industrially develop?
- China’s moved away from the primary sector and into manufacturing from the 1980s
- the Chinese gov introduced policies that turned the country into “the workshop of the world”
- industrial development was encouraged and now China is one of the fastest growing economies in the world
- huge inequalities still exist - benefits might not “trickle down”
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What happened in Bangladesh that showed the negatives of industrial development?
- some countries that encourage industrial development make themselves vulnerable to exploitation
- the Rana Plaza factory in Bangladesh and poor working conditions in garment factories worldwide are evidence of poor considerations of safety for workers
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How rich is Malaysia (industrial development)?
one of richest countries in south east Asia
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How did Malaysia gain its wealth (industrial development)?
- since 1970s had a dramatic growth in wealth and QoL of its population
- due to development of its natural resources e.g. oil and gas, palm oil and rubber
- has made use of foreign investment to exploit these resources and develop a thriving manufacturing sector
- one of Malaysia’s leading products is the Proton car
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What is Malaysia’s economy like today (industrial development)?
has a highly developed mixed economy with growing financial and service sectors and flourishing trade links with the rest of the world
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How does industrial development help reduce the development gap?
- Manufactured secondary goods can be sold at a higher price and are less vulnerable to price fluctuations. Value is added to the primary product, increasing profits for manufacturing companies which governments can tax and spend on education and healthcare
- industrial development can lead to a multiplier effect whereby growth leads to more growth e.g. if people have jobs, they will have more money to spend, further boosting the economy
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Aid:
- can be defined as “assisting people”
- aid includes money, equipment, food, training, provision of better education and healthcare, installation of water pumps for clean water, large scale infrastructure projects, skilled people and loans
- unlike a loan, the aid doesn't need to be paid back
- providers of aid can be individuals, charities, NGOs, governments and international (multi-lateral) organisations lie the EU or UN (usually a transfer of resources from a HIC to an LIC in International aid)
- aid can be on a large scale or small scale
- large scale aid projects take a ’top-down’ approach and small-scale aid projects take a ‘bottom-up’ approach
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International aid:
when money, goods or services are given by gov’s or NGO’s e.g. the World Bank, IMF, or Oxfam to help the quality of life and the economy of another country
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Types of aid:
- emergency aid
- developmental aid
- short-term aid
- long-term aid
- bi-lateral aid
- multi-lateral aid
- NGO aid
- tied aid
- voluntary aid
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Emergency aid:
- usually follows a natural disaster, war or conflict
- aid may take form of food, water, medical supplies and shelter from an NGO
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Developmental aid:
- long-term support given by charities, governments and multi-lateral organisations (links to sustainable development goals)
- aims to improve QoL by providing safe water, education or improvements to infrastructure such as roads and electricity supplies
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Short-term aid:
short-term emergency aid is usually in response to a natural disaster e.g. floor, earthquake etc.
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Long-term aid:
long term sustainable aid usually seeks to improve resilience e.g. well tor educe effects of drought
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Bi-lateral aid:
aid from one country to another usually to address poverty which is often tied
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Multi-lateral (richer) aid:
donating to an organisation to distribute to many countries around the world
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NGO aid:
from NGO’s normally linked to emergency aid
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Tied aid:
aid may be given within certain conditions e.g. that the recipient has to spend the aid money on the donor country’s products
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Voluntary aid:
money donated by the general public in richer countries and distributed by NGOs such as Oxfam
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What can aid take the form of?
- money (grants or loans)
- emergency supplies (tents, medicines, water etc.)
- food such as rice or wheat, technology (tools or machinery)
- skills (people with special skills e.g. doctors or engineers)
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Advantages of aid:
- emergency aid in times of disaster saves lives
- aid helps rebuild livelihoods and housing after a disaster
- provision of medical training, medicines and equipment can improve health and standards of living
- encouraging aid industrial development can create jobs and improve transport infrastructure
- aid can support countries in developing the natural resources and power supplies
- projects that develop clean water and sanitation an lead to improved health and living standards
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Disadvantages of aid:
- aid can increase the dependency of LICs on donor countries - sometimes aid isn't a gift, but a loan and poor countries mays struggle to repay
- aid might not reach people who need it most - corruption may lead to local politicians using aid for their own means or political gains
- aid can be used to put political pressure on the receiving country - the country may end up owing a donor country or organisation favour
- infrastructure projects may end up benefitting employers more than employees
- it may be a condition of the investment that the projects are run by foreign companies or that a proportion of the resources or profits will be sent abroad
- some development projects may lead to food and water costing more
- some skeptics see aid as an extension to colonialism, with HICs remaining the ‘rich saviours’ - many LICs and some NEEs become dependent on HICs for aid
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What has the 1 laptop per child aid distributed and who is it partly funded by (aid)?
- one laptop per child project - partly funded by Google
- has helped distribute free laptop computers to 100,000s of children and teachers in South America and Africa
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How has the one laptop per child aid project help reduce the development gap (aid)?
- helps LICs and NEEs reduce social uneven development as it gives children a better education and better opportunities
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What is the goal of aid that the UN set and how many countries have met this?
- UN set goal of aid to 0.7% of a country’s GDP
- UK is 1 of only 6 countries to meet this
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Who are the biggest recipients of UK aid?
biggest recipients of UK aid are Pakistan, Ethiopia and Nigeria
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Example of aid (the Tazara railway):
- the Tazara railway that links Tanzania and Zambia was funded with International aid from China
- India and China provide aid to LICs across Africa
- India has spent $6bn on education projects in Africa
- flow of aid from NEEs to LICs in an important new feature of the geography of development
- despite offering aid to Africa, half of India’s population are still very poor
- India is still in UK’s top 10 recipients of aid
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Why was the goat aid Oxfam project set up (aid)?
- set up to help families in Africa countries like Malawi
- money donated is used to help buy family a goat which produces milk, butter and meat
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Advantages of goat aid from Oxfam (aid):
- goats are an excellent food source, providing both milk and meat
- manure can be used as a crop fertiliser
- milk can be sold as a source pf income to pay for food and education
- goats can be bred easily and kids sold at market or given to other families
- care of goats helps build community spirit
- helps to improve people’s QoL and raise level of development reducing the development gap
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How much aid from the UK does Pakistan receive (aid)?
Pakistan receives more aid from the UK than any other country
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How many people are living in poverty in Pakistan (aid)?
87mn people in Pakistan living in poverty
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By how much is the number of people in poverty in Pakistan expected to rise by (aid)?
- 87mn people in Pakistan living in poverty
- population is expected to rise by nearly 50% by 2050
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What is UK aid in Pakistan mainly spent on (aid)?
mainly spent on education sector and to reduce hunger and poverty
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How does aid help reduce the development gap?
- emergency aid in times of disaster saves lives
- aid helps rebuild livelihoods and housing after a disaster
- provision of medical training, medicines and equipment can improve health and standards of living
- encouraging aid industrial development can create jobs and improve transport infrastructure
- aid cans support countries un developing the natural resources and power supplies
- projects that develop clean water and sanitation an lead to improved health and living standards
- one laptop per child project - partly funded by Google has helped distribute free laptop computers to 100,000s of children and teachers in South America and Africa - helps LICs and NEEs reduce social uneven development as it gives children a better education and better opportunities
- can enable countries to invest in development projects such as road, electricity and water management that can bring long-term benefits
- on a local scale, aid can help improve people’s QoL focusing on healthcare, education and services
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How has tourism helped to reduce the development gap?
- countries with tropical beaches, spectacular landscapes and abundant wildlife have become tourist destinations
- led to investment and increased income from abroad, which can be used for improving education, infrastructure and housing
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What countries have become highly dependent on tourism?
several countries in the Caribbean e.g. the Bahamas, the British Virgin Islands, the Maldives, Jamaica etc.
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What are the negatives of countries becoming highly dependent on tourism?
tourism can generate a lot of income but is vulnerable in times of economic recession
