Chapter 21 - Economic Inequality Flashcards
Describe developed countries
►Northern hemisphere and Australia & New Zealand ►Strong economies ►Well developed ►Wealthy ►Industrialised ►Secondary and tertiary sectors ►High standard of living and education ►High-quality infrastructure ►High GNP
Describe quickly developing countries
►Tiger economies ►Rapid industrialisation → increased employment in secondary sector ►Focus on exporting goods ►Wages increasing ►Improvement in standard of living ►Brazil, China, Mexico
Describe slowly developing countries
►Third World countries ►Southern hemisphere ►Over-reliant on primary sector ►Little manufacturing or services ►Famine ►War ►High birth rates ►Sudan, Ethiopia, Mali, Somalia ►Low GNP ►Aids epidemic
What is GNP?
GNP stands for Gross National Product and is the total value of goods produced and services provided in a country in one year, plus the total value of exports
What is the formula for GNP per person?
GNP
GNP per person = ———————-
Total Population
What are the reasons for economic inequality?
○Colonialism
○Unfair trade
○Debt
○Corruption
Explain how colonialism is a reason for economic inequality
○15th - 17th century was the Age of Exploration
○European countries conquered South America and Africa
○Exploited raw materials and mineral wealth
○Stripped countries of natural resources
Explain how unfair trade is a reason for economic inequality
○Developed countries often pay developing countries low prices for their raw materials, like coffee and cotton
○Then process these into high-value goods
○MNCs often locate in Third World countries because of low labour costs
Explain how debt is a reason for economic inequality
○Development is difficult because of debt
○Have huge debts due to unfair trade and political leaders’ mismanagement of their economies
○Foreign debt is a vicious cycle - Foreign banks charge very high interest on loans which developing countries struggle to pay back. This leaves very little money to spend on education and health care. Thus the government needs to borrow more money, further increasing their debt
Explain how corruption is a reason for economic inequality
○Corrupt leaders take money for their personal wealth
○Many resources don’t get through to the people who need them most
○Money for infrastructure and services is often spent on the millitary
Cash crop
Grown for sale, rather than for personal use as food
How was Ireland exploited through the Plantations?
English and Scottish settlers grew cash crops, set up towns and developed trade. But the landlords didn’t live in Ireland and spent and invested the profits in England. This benefited Britain’s economy, while Ireland remained poor
After gaining independence in 1921, who was most of Ireland’s trade with?
Britain
When did Ireland join the EEC/EU?
1973
Commodities
Raw materials sold on the world market
Coffee is a cash crop. Next to _____, it is the most important commodity in the world.
oil
Where is coffee mainly grown?
Coffee is grown in tropical regions, mainly in the developing world, in places like Mexico, Colombia, Brazil, Uganda, Ivory Coast and Kenya
How many people depend on the coffee trade for income?
Approximately 20 million depend on the coffee trade for their income
How is coffee grown?
- Beans are picked by hand in developing countries
- Beans are dried, bagged and exported to the North
- Further processing and packaging takes place in the North
How are coffee-producing countries exploited?
○All the profits are made in the North
○Protectionism - Businesses in the developing world cannot compete with the MNCs
○Falling and changing price of coffee beans
Where does aid come from?
- NGOs
- Bilateral aid
- Multilateral aid
What are NGOs?
Organisations that provide aid on a voluntary basis. NGO stands for Non-Governmental Organisation
What is bilateral aid?
Aid given from one government to another
What is multilateral aid?
Aid given when governments contribute money to international organisations like the UN or EU
What are the main types of aid?
Development aid
Emergency aid
Tied aid
What is development aid?
Given over a long period of time. Can be used to improve health, agriculture, education, industry and infrastructure. It can be in the form of machinery, or people like teachers or doctors
What is emergency aid?
Given during crises, such as famine, flood, earthquake or tsunami. Emergency food, shelter and medicine is provided
What is tied aid?
Aid given with ‘strings attached’. E.g the country receiving aid may be forced to buy machinery or even weapons from the donor country.
What are some of the arguments for aid?
✔Emergency aid saves lives ✔Development aid ✔Helps communities help themselves ✔Lead to economic development ✔Can create links between North and South
What are some of the arguments against aid?
✘Recipients can become dependent ✘Tied aid often benefits donor more ✘Sometimes spent on military equipment ✘Can be stolen by corrupt governments ✘Some argue fair trade is better than aid
Give an example of an Irish government aid programme
Official Development Assistance (ODA)
What is the aim of Ireland giving aid?
The aim of Ireland giving aid is to help poorer countries help themselves and promote sustainable development
What is ‘Irish Aid’?
The governments programme for overseas development
What is the population of Ethiopia?
Over 94 million
What percentage of the Ethiopian population is living on less than $1.25 a day?
25%
What fraction of Ethiopia’s children experience malnutrition and hunger?
⅓
Irish Aid has been providing aid to Ethiopia since…
1994
How much aid did Ireland give to Ethiopia in 2013?
€26 milion
What issues does Irish Aid focus on in Ethiopia?
○Food Security ○Health ○Education ○HIV/AIDS ○Governance
Give an example of emergency aid given by Ireland
Indian Ocean Earthquake & Tsunami
Give examples of Ireland’s NGOs
Trócaire, Concern, Bóthar, Gaol
Other than unfair trade, colonialism, debt and corruption, what other factors hinder economic development?
Climate change
Population growth
Arms expenditure and war
How did climate change hinder economic growth in Ethiopia?
There was drought:
✘Animals die and crops fail
✘Leads to famine. People become sick and can’t work. Famine has killed hundreds of thousands of Ethiopians
✘Affected area will need emergency aid
How did population growth hinder economic growth in Ethiopia?
✘Increased population creates the extra need for food and housing. Puts pressure on already limited resources
✘More land is cleared for farming and housing. This leads to soil erosion and drought
✘Drought causes famine. People become weak and can’t work. This hinders economic development even more
✘Rural-to-urban migration. Cities may not have the resources to cope
How did arms expenditure and war hinder economic growth in Ethiopia?
Ethiopia has experiences conflict with both neighbouring countries and amongst various ethnic groups in Ethiopia:
✘Many injured or killed
✘Crops destroyed and infrastructure damaged
✘Money spent on the military , rather than development. Ethiopia’s government borrowed around $3 billion from Western banks. The repayments have affected the countries economic development
The ROI can be split into two economic divisions. What are they?
- Southern & Eastern regions
2. Border, Midlands & Western (BMW) regions
Describe the population of the South & East region of Ireland
○High population density ○High immigration ○3 million people ○70% of the population ○High standard of living
Describe the population of the BMW region of Ireland
○Low population density ○High emmigration ○1 million people ○30% of the population ○Lack of services and jobs
Describe the landscape and relief of the South & East region of Ireland
○Mainly lowlands
○Brown Earth soils
○Very fertile in the southeast
Describe the landscape and relief of the BMW region of Ireland
○Mountainous ○Blanket bogland ○Heavily leached soils ○Poor quality podzols, gley and peat soils ○Boggy ○Infertile
Describe the infrastructure of the South & East region of Ireland
○Well developed infrastructure ○Roads, rail, many good airports →Dublin, Shannon, Cork ○Dublin is a nodal point ○Good road network ○Luas, DART ○Dublin Port ○Ideal for attracting industry
Describe the infrastructure of the BMW region of Ireland
○Infrastructure not as developed as South & East
○One major airport →Knock, Co. Mayo
○Poor road network
○One motorway from Galway to Limerick
Describe the economic activity of the South & East region of Ireland
○95% in service industry ○High income ○High standard of living ○Variety of services ○Educated workers ○Very attractive for industry
Describe the economic activity BMW region of Ireland
○A lot of small farms ○25% in subsistence agriculture ○Part-time farmers ○Lack of services ○Uttractive for industry ○However Galway is becoming more attractive due to good universities, labour force etc
Describe the climate of the South & East region of Ireland
○Less rain, as the clouds have ‘released’ most of their precipitation by the time they reach the east (from the Atlantic)
○700mm of rain
○Cool Temperate Oceanic
○Mild, wet climate
Describe the climate BMW region of Ireland
○High rainfall ○Wet and windy conditions coming from the Atlantic ○1500mm of rain ○Cool Temperate Oceanic ○Relief rainfall ○Mild, wet climate
Italy can be split into two economic divisions. What are they?
- North of Italy
2. South of Italy (Mezzogiorno)
Describe the population of the North Italian Plain
○High population density
○Large urban centres
○High immigration
Describe the population of the Mezzogiorno
○Low population density
○High emigration
○Young people leaving
○Ageing population
Describe the landscape and relief of the North Italian Plain
○Low-lying northern plains ○Very fertile soils ○Floodplains of the River Po ○Cereal farming ○Continental climate (hot and wet summers)
Describe the landscape and relief of the Mezzogiorno
○85% mountainous
○Poor soils - terra Rossa
○Mediterranean climate
○Summer drought
Describe the infrastructure of the North Italian Plain
○Good road network
○Excellent rail network
○Major airports
○Good access to markets
Describe the infrastructure of the Mezzogiorno
○Poor infrastructure
○Autostrada motorway links the north to the south
Describe the economic activity of the North Italian Plain
○Highly industrialised ○HEP ○High standard of living ○Low unemployment ○Good services ○Industrial triangle: Milan, Turin, genoa
Describe the economic activity of the Mezzogiorno
○High unemployment ○Lower standard of living ○Subsistence farming ○Cash crops ○Tourism ○Textile ○Steel ○Sheep farming ○Industrial triangle: Bari, Brindisi, Taranto
What was the cassa per il Mezzogiorno?
- Funding scheme for the south
- Introduced in the 1950s by the Italian government
- Irrigation schemes
- Autostrada roads built
- New airports opened
- State owned companies told to invest
- Industrial triangle developed
- Received EU funding
What issues must be addressed in order to solve economic inequality?
- International aid
- Fair trade
- Debt
