C) Other Strategies For Growth And Developement

Question 1

What is the Lewis model?

Answer 1

Argues that growth and development can be achieved by the migration of workers from a rural, primary sector ( low productivity, low income ) to the secondary sector, often urban ( higher productivity, increase in income + savings ) through higher wage incentives

Question 2

Advantage of development of tourism

Answer 2

• improvement in infrastructure
• more tax revenue for government ( allow improvements in public services )
• good for employment
• earns foreign currency and it labour incentivise ( services such as hotel, bars )
• multiplier effects

Question 3

Disadvantages of development of tourism

Answer 3

• may require more imports to get capital equipment
• industry is seasonal
• negative externalities effects : pollution , clean water for tourists, increase in waste, pollution on beaches
  -low paid jobs

Question 4

What are fair trade schemes?

Answer 4

• correct for market failure in primary industries such as:
• prevent unsustainable low prices for farmers
• address poverty and inequality for farmer in poor countries

Question 5

Advantages of fair trade schemes?

Answer 5

• higher prices for certified producers
• more income stability
• extra earnings can be spent on improving quality of product
• diversification
• improved working conditions
• environmental sustainability

Question 6

Disadvantages of fair trade schemes?

Answer 6

• some high price goes to processors not the farmers
• fair trade does not address key causes of poverty

Question 7

disadvantages of aid

Answer 7

• could lead to a dependency culutre
• leaders may not use the aid effectively
• could exploit it - finance corruption

Question 8

what are advantages of aid

Answer 8

• can help overcome the savings gaps = lead them out the poverty trap
• could lead to an improved insitutions ool, hosiptals etc
• fast forward capital investment = increase productivity

Question 9

What is debt relief?

Answer 9

When a country’s burden of debt becomes too high, debt servicing costs can become crippling - debt relief helps

Question 10

Advantages of debt relief?

Answer 10

• LDCs have more foreign currency to buy capital and consumer goods from developed countries
• more capital can be purchased
• can help reduce savings gap

Question 11

Disadvantages of debt relief?

Answer 11

• corruption may mean debt relief gains are channelled to gov officials not poor
• may be less effective than policies that reduce protectionism in developed countries