Chapter 9

Question 1

State the difference between when economic growth exists and when economic development exists

Answer 1

Economic growth exists when there is and increase in real GDP wheres economic development exists when there is and increase in GNI (GDP) per capita

Question 2

Name and explain the 6 development methods

Answer 2

1. Attracting new businesses
   - More employment that promotes diversity and growth
2. Building community capacity
   - By developing their own skills, people will be in a position to make the most of available opportunites
3. Expanding local markets
   - Promote local products and markets instead of imports
4. Converting outdated facilities
   - Tranform in order to meet the new needs of the community
5. Promoting direct investment
   - Government needs to upgrade infrastructure and build new facilities to create more jobs and attract investment
6. Utillising natural resources
   - Used effectively to improve standard of living

Question 3

What are the five development methods/strategies?

Answer 3

1. Human resources
   - Education and training
   - health
   - motivation
   - population planning
2. Natural resources
   - land ownership
   - processing (manufacturing) industries
3. Entrepreneurship
   - Risk taking
   - Collaboration and innovation
   - Product development
4. Capital
   - Voluntary savings
   - Foreign investment
   - Foreign loans
5. Technology
   - Communcation
   - Science training

Question 4

What are the common characteristics of Developing countries?

Answer 4

1. Low living standards
   - Poverty and malnutrition
   - Low per Capita income and slow growth of per Capita real GNI
   - Greater income inequality
   - Low levels of education
2. Low levels of productivity
   - Contributing factors eg. lack of experienced management, lack of education and training, lack of good public health, lack of investment in physical capital
   - Impacts include difficulty to reduce poverty and income inequality, lower quality workers and less creativity
3. High population growth and dependency
   - Low mortality rates (results in a lot of young population)
   - High birth rates
   - Dependency on family (Under 15 and over 64 = economic dependency burden)
4. High levels of unemplyment
   - Underemployment
   - open employment
   Youth unemplyment rate = 45.5%
   unemployment rate = 32.9%
5. Dependency on primary sector
   - Rural lifestyle (dependent on agriculture)
   - Main export goods
6. Deficient infrastrucutre
   - Physical infrastructure
   - Social infrastructure
   - Financial infrastructure

Question 5

Name and explain the growth development policies used in SA

Answer 5

1. Reconstruction Development Programme (RDP)
   -Created in 1994 by ANC for job creation, housing, electricity, land reform, education, healthcare, water and sanitation
2. Growth Employment And Redistribution (GEAR)
   -makes economic policy introduced in 1996 focusing on economic development, income redistribution, and providing socio-economic opportunities for the poor.
3. National Skills Development Stratergy (NSDS)
   A legislative framework for the improvement and development of skills in SA
   - Stage 1: Develop a culture of high quality lifelong learning
   - Stage 2: Equity and and quality training and skills development in the workplace
   - Stage 3: Institutional learning linked to occupational directed programmes
4. Accelerated and Shared Growth Initiative for South Africa (ASGISA)
   - Infrastructre development, improving skills, reducing inequalities and advancing economic development through public private partnerships
5. Joint Initiatives on Priority Skills Acquisitions (JIPSA)
   - Increasing skills sets
6. New Growth Path (NGP)
   - Job creation
7. Skills Development Act.
   -(1998) Provides for payments of levies by employers and establishment of SETA’s

Question 6

How can South Africa develop the economy through Regional Development?

Answer 6

Regional Development focuses on specific areas or regions to reduce the centralization of industries
- Spational Development Initiatives (SDI’s) aims to attract infrastructure and investment to businesses to neglected and underdeveloped areas. (Look for areas with potential) (they aslo qualify for financial assistance eg subsidies and grants)

• Industrial Development Zones (IDZ’s) aims to promote international competitiveness in the SA manufacturing sector, create jobs, and promote exports (Industrial estates that are physically enclosed and linked to ports/airports) ( 5 already exist)