Changing Economic World : Global variation in economic development and quality of life Flashcards
Demographic transition model : stage 1
Birth rate : high
Death rate : high
Natural change : stable
Little contraception and education means a high birth rate which is counteracts the high infant mortality
Demographic transition model : stage 2
BR : high
DR : falling
Natural change : rapid increase
Improved standard of living means that hygiene and Healthcare is accessible, but education and contraception are still low.
Example India
Demographic transition model : stage 3
BR : falling
DR : slow falling
Natural change : stable increase
Education + contraception on the rise. Healthcare and Infant mortality still improving but at a slower pace than before.
Example Brazil
Demographic transition model : stage 4
BR : low
DR : low
Natural change : stable
High standard of living and education means access to contraception and healthcare.
Example UK
Demographic transition model : stage 5
BR : low
DR : slow increase
Natural change : decrease
Such a high standard of living and healthcare => high average age => deaths of old age.
Example Japan
Demographic transition model : weaknesses
1) Cultural and societal pressures can affect the DTM (I.E. India and Brazil are countries where large families are expected)
2) Can be artificially altered (one child policy china)
3) ‘later’ developing countries move faster across it due to the models Eurocentric view
4) Does not account for migration
Demographic transition model : Strength
1) useful in making predictions
2) useful in comparisons of countries
Dependency Ratio
Number of economically active people
Primary goods
Raw materials. I.E. Timber, Coco beans
Secondary goods
Manufactured products. I.E. Chairs, Chocolate
What do LIC’s and HIC’s tend to export
LICs tend to export primary products
HICs tend to export secondary products
HICs exploiting LICs for primary products
HICs have the purchasing power and political power to drive down the prices of primary products.
This also tends to keep LICs poor as little money is their to cycle through the economy
Trade surplus
the amount by which the value of a country’s exports exceeds the cost of its imports.
Trade deficit
the amount by which the cost of a country’s imports exceeds the value of its exports.
Economic reasons for low development (6 points)
1) Poor trade ties
2) LICs are based off primary products
3) Significant debt
4) Lack of access to clean water
5) Corruption
6) Gender Inequality
Economic reasons for low development : Significant debt in LICs
The worlds poorest countries give more in debt then they receive in aid.
Debt can be from loans given when becoming independent nations or failed projects
Interest rapidly accumulates due to high interest rates
Economic reasons for low development : Lack of access to clean water
Water plays a key role in
Agriculture (irrigation)
Health (infection spreads through dirty water)
Conflict (Eygpt threatining Etheopia after excessive of
Nile water)
Natural disasters (drought and floods)
Women/girls struggle to get education as they must
travel to get water
Economic reasons for low development : Corruption
Corruption can cause
Clan based thinking (hiring of ‘clan’ and not skill)
Embezzlement
LICs tend to be less democratic
Economic reasons for low development : Gender Inequality
More gender equal countries tend to be more developed
=> more skilled workers (as education is available equally)
=> Women are free to make better reproductive and marital choices
Reducing the development gap : FDI
When countries and TNC’s invest in a country by moving business there. Unlike loan, no repayment needed. TNC’s tend to move for cheap labour, weaker environmental legislation, weaker health and safety regulations and cheap access to raw materials.
Reducing the development gap : Industrial development
By growing industrial sector, a country reduces its need for imports and can begin exporting more valuable secondary products.
NEE’S such as Brazil and Malaysia began car manufacturing to improve their economies.
This has lead to gdp rise => better standards of living.
Also creates positive multiplier effect as creates a richer better educated population
Reducing the development gap : Tourism
Natural resources such as tropical beaches and exotic wildlife can attract foreign tourists.
Tourists bring much money with them but it is a vulnerable business
Tourism can cause environmental damage. Affected by natural disasters, (Covid killed jamaican economy -12٪)
Reducing the development gap : Aid Types
5 types of Aid
1) Bilateral - country to country. Usually tied to a condition
2) Multilateral - Government to NGO. Free of government corruption but NGOs can be innefecient with money and be corrupt
3) NGO’s (voluntary) - NGO (donations) to people. Donations are unstable
4) Short-term - food, medicine and water after a natural disaster or war.
5) Long term - Infrastructure
Reducing the development gap : Aid example
UK donates £369 million to Ethiopia to build Tekeze Dam to make hydroelectric power.
Reducing the development gap : Intermediate Technology + example
Technology which is appropriate to needs, skill, wealth and knowledge of the local people. Is small scale and should prevent people from losing jobs
Examples
Solar Cookers - Prevents deforestation for firewood. No CO2 released in cooking.
Low cost
Portable - can be carried by bike and only 20 minutes to setup
Lasts up to 10 years
Hippo rollers
Reducing the development gap : Fair trade
Trade is heavily balanced in HICs favour due to the valuable secondary products they produce, and cheap primary LIC products + competition.
Fair trade demands
- fair stable price of products
- Social premium (money spent on local infrastructure)
- no child or forced labour
- Health, safety and environmental standards.
- The right to join free trade unions
However
-Only deals with symptoms of international trade
- Fair trade products more expensive
- Doesn’t always help the poorest farmers
- Businesses controlled by TNCs will make fair trade impossible
Reducing the development gap : Fair trade necessary example
Cocoa beans from Ghana. Worlds largest producer of cocoa beans. EU charges 7.7% import tariff on cocoa powder and 15% on chocolate.
=> Ghana forced to export cheap cocoa beans than process the cocoa beans in Ghana to sell for a higher price.
Reducing the development gap : Debt Relief
-Every £1 sent to Africa in aid, they return £13 in debt
African countries (70-80s) borrowed money to industrialise but intrest rates went up and commodity prices went down, leaving them in lots of debt. Many also owe money from when colonies became independent.
2005 G8 agreed to cancel debt of 19 HIPCs on some conditions
-no corruption
-managing their own finances
-spending money on education, health and reducing poverty
Reducing the development gap : Debt Relief example
REVIST TO SEE IF NECESSARY
Guyana ; £21 billion of debt cancelled
- now 20% of GDP is spent on public infrastructure => fast modernisation
Reducing the development gap : Microfinance + example
Small scale financial support from banks or charities to start small businesses. 85% of loans taken by women
Grameen Bank, Banglasesh
-loans often less than £100 + low intrest rates
-lent £11 billion to 7 million members
Borrowers have shared ownership of the bank => repayment high
-Mobile phones rented
Economic reasons for low development : Poor trade links & LIC economies based of primary products
Trade is done:
-sell surplus to gain money
-to purchase imports which cannot be made in the country
- build political links (interdependence is when to countries trade with each other)
LICs based of cheaper primary products
-less money made of trade, trade deficit as secondary products must be imported
-HICs have purchasing and political power to force low prices
Causes of uneven development : Landlocked countries
Landlocked countries rely on neighbours to import/export goods
=> tariffs rise prices
=> can stop development if relations are strained
Causes of uneven development : Historical events
Colonialism helped some build infrastructure, robbed others of resources and labour.
Causes of uneven development : War
War halts development of country and destroys infrastructure
Causes of uneven development : Climate
Soils in tropical areas are poorer => food stress => higher food prices
Unreliable rainfall and extreme weather damages sustained food production
Causes of uneven development : Diseases
Tropical regions suffer from more disease
Tsetse fly harms livestock. Malaria, Ebola and yellow fever seriously hinder workforce
Causes of uneven development : Economic protectionism
Protectionism is when a country charges big tariffs on imported goods to protect its home businesses. This harms the exporter I.E. Brazil looses $200 billion per year due to protectionism.
Causes of uneven development : Exploitation
Poor countries with lots of natural resources exploited by TNCs - Nigeria
Causes of uneven development : Safe water supply
V.poorest cannot supply clean water to population. Cycle of poverty and harms the population. prevents industrialisation as industry needs water
Migration push factors
-poor services
-Lack of education
-poor medicine
-unemployment
-poor pay
-hazardous working conditions
-persecution
-war
Migration pull factors
-high quality education
-many doctors
-democracy
-freedoms
Why does quality of life improve with economic development
-Higher paid jobs => Higher disposable incomes
Higher tax =>
-Improvements to infrastructure
-Reliable electricity
-Good education
-better diets
Development indicators
GNI per head - Wealth
Literacy rates - education
Death rate - health
Life expectancy - all three
HDI - all three
