developing and emerging economies Flashcards
what are developed countries
rich industrialised nations
what are developing countries
poor countries they are third world countries
characteristics of developing countries (6)
- poverty
- high population growth: birth and death rates are high
- high dependance on exports
- agricultural dominance
- unemployment and underemployment
- lack of infrastructure
Characteristic’s of emerging economies (6)
- high economic growth rate
- rising export sales
- little reliance on agriculture
- rising living standards
- high education and training level
- improved infrastructure
- india, china, russia
Positive effects of emerging economies on the UK (3)
- demand for UK products from emerging economies can increase sales and opportunities for domestic firms. UK exports willi increase and UK businesses will increase sales and profits
- emerging economies who buy from UK help to increase employment in the UK as firms demand more workers this helps improve the UK current account through increased exports
Negative effects of emerging economies on the UK (3)
- increased competition for UK firms because imported goods are cheaper
- UK firms may relocate to these countries increasing unemployment
- increased deficit in the trade balance as the value of imports is greater than the value of exports
motives for giving aid (3)
- to help those in need e.g. medicine and food
- to help countries who share similar views
- to help developing countries become more productive so they contribute to the world economy and provide new markets to sell and reduce migration issues
disadvantages of aid (5)
- it may not reach those in need due to corrupt governments
- donors may finance the capital expenditure e.g. new roads but not support current expenditure e.g. maintenance making resources unusable
- developing countries may be forced to buy equipment from the donar when it could be cheaper to borrow and look for a cheaper supplier
- developing countries may become dependant on rich countries and give no incentive to grow from its own resources
- food aid can destroy local farmers if it drives prices down
types of aid (5)
gifts of food/medicine
grants: doesn’t need to be repaid but there isa reluctancy to give due to corruption
soft loans: loans with low interest rate
writing off debts
tied aid: grants and loans that are given to purchase equipment from the donor country
effect of aid on the developing country (3)
loans/grants can increase incoming in the long run and enable them to achieve economic growth
sending specialist to give advice can result in the developing country engaging in more trade with other countries
giving suitable medicine aid can increase life expectancy making inhabitants more productive
what is the world trade organisation (4)
formed in 1995 replacing the general agreement on tariffs and trade
Encourages free trade by reducing tariffs and other trade barriers
mediates in trade disputes
ensures member countries comply with trade agreements and can impose penalties
international monetary fund (6)
- encourages the growth of world trade
- helps members facing currency collapses
- provides loans to governments
- encourages movement to market economies away from government ownership
- holds regular meetings to discuss world monetary problems
- provides help to countries experiencing debt crisis
what is the world bank (5)
- full name is the international bank of reconstruction IBRD
- provides long term assistance for development
- largest source of multilateral aid
- member state contributes funds in proportion to their national income
- give loans to developing countries
