Economic Causes 12 Marker Flashcards
Introduction
Global underdevelopment is a world issue cause by many economic factors. This response will analyse a lack of key infrastructure, a lack of funds, trade barriers & poverty.
Lack of Infrastructure - Point
One economic cause of underdevelopment is a lack of key infrastructure
Lack of Infrastructure - Explain
Ranges from essential services such as schools & hospitals to absolute basics such as clean water & sanitation
Without these facilities the developing world will continue to see large numbers of its population fail to gain skills needed to help the country develop
Lack of Infrastructure - Example
Only 50% of health care facilities have basic water services in the least developed countries
Lack of Infrastructure - Analysis
Due to a lack of funds less developed countries often find themselves trapped in a poverty cycle
Lack of Funds - Point
Many countries who lack funds struggle to develop
Lack of Funds - Explain
Many countries who lack funds often turn to loans from other countries which often results in debt
When a country has to borrow money, it makes a promise to pay it back with interest & developing countries face higher interest rates due to concerns about them being able to pay the money back
Lack of Funds - Example
Zimbabwe suffered 18-hour long power cuts due to the debt the country was in
Lack of Funds - Analysis
Because a country is focused on repaying a loan, they don’t have enough money to gain resources for development
Trade Barriers - Point
Another economic cause of underdevelopment is trade barriers
Trade Barriers - Explain
Low-income countries may face restrictions such as higher tariffs from developed countries
Some trade barriers exist due to mismanagement of trade relations made by corrupt governments who may benefit
Trade Barriers - Example
Developing regions have signed free trade agreements such as MERCOSUR to try remove trade barriers & improve economies
Trade Barriers - Analysis
Until economic barriers such as tariffs are removed, developing countries will never reach their full potential
Poverty - Point
Further to this high levels of extreme poverty are a significant barrier to development for a country
Poverty - Explain
Extreme poverty is when people don’t have the absolute essentials to survive
Developing countries have higher levels of poor people meaning there’s not enough money to help the country develop
