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