Economic development Flashcards
Wealthy countries can be known as:
HIC – High Income Country
Or
MEDC – More Economically Developed Country
Countries with a medium level of development can be known as:
MIC – Middle Income Country
NIC – Newly Industrialising Country
NEE – Newly Emerging Economy
Countries with a low level of development can be known as:
LIC – Low Income Country
Or
LEDC –Less Economically Developed Country
Factors influencing development: Physical factors
Climate: The Sahel region in Africa suffers from a lack of rainfall. This means that droughts are common.
Natural hazards: Floods, droughts and tectonic activity can limit future growth and destroy buildings and agricultural areas.
Landlocked countries: 16 countries in Africa are landlocked. This means it is more difficult to trade as goods have to be driven through other countries to get to the coast for shipping.
Natural resources: Natural resources such as minerals, gas and oil can help improve a country’s level of development. However
this is closely tied in with the ability to exploit the resource for the benefit of the country.
Factor influencing development: Human factors
Historical development: Colonialism hindered a developing country’s level of development. Borders of some colonial countries were set without attention to tribal and cultural differences, causing tensions and instability.
Political factors: Poor governance does not help a country to develop. Money that could be spent on development may be used to fund military weapons or the affluent lifestyle of an elite group of people.
Economic factors: World trade is often not fair. LEDCs tend to sell primary produce. LEDCs have to compete with each other to win the trade - which lowers the prices farmers get.
Foreign investment can help a country to develop.
Many LEDCs are in debt to MEDCs. Some of their income has to pay off these debts.
Social factors: A poorer country finds it more difficult to invest in education. The problem is made worse because many countries have a high dependency ratio. Clean water is essential for health.
One in six people do not have access to safe water. If water is not safe, people may be unable to work or care for their families because of illness.
Measuring development
Economic development: is a measure of a country’s wealth and how it is generated (for example agriculture is considered less economically advanced then banking).
Human development: measures the access the population has to wealth, jobs, education, nutrition, health, leisure and safety - as well as political and cultural freedom.
Material elements, such as wealth and nutrition, are described as the standard of living.
Health and leisure are often referred to as quality of life.
Development indicators
Health.
Industry.
Education.
The North South Divide
MEDCs are countries which have a high standard of living and a large GDP. LEDCs are countries with a low standard of living and a much lower GDP.
The map shows the locations of LEDCs and MEDCs. Most of the southern hemisphere is less developed, while countries in the northern hemisphere are more developed.
Economic development indicators
Gross National Income (GNI): total amount of money earned by a nation’s people and businesses.
Gross National Income (GNI) per capita: total amount of money earned by a nation’s people and businesses divided by the total population to give an indication of average income per person.
Inequality of wealth: is the gap in income between a country’s richest and poorest people. It can be measured in many ways,
Unemployment: is the number of people who cannot find work.
Economic structure: shows the division of a country’s economy between primary, secondary and tertiary industries.
Human/social development indicators
Life expectancy - the average age to which a person lives.
Infant mortality rate - counts the number of babies, per 1000 live births, who die under the age of one.
Access to basic services - the availability of services necessary for a healthy life, such as % of people with access to clean water and sanitation.
Access to healthcare - takes into account statistics such as how many doctors there are for every patient.
Access to education - measures how many people attend primary school, secondary school and higher education.
Literacy rate - is the percentage of adults who can read and write.
Access to technology - includes statistics such as the percentage of people with access to phones, mobile phones, television and the internet.
Problems with development indices
Development indices can be misleading and need to be used with care:
- Many indices are averages for the whole population of a country. This means that indices do not always reveal substantial inequalities between different segments of society.
- In some countries, the data used in indices could be out of date or hard to collect. Some countries do not wish to have certain index data collected.
Advantages of the HDI:
It uses a range of indicators to assess the development of a country e.g. social and economic indicators
Using the human development index allows easy statistical comparisons between countries so that differences in global development can be observed.
It also allows changes in development over time to be observed.
Uneven development
Uneven development means that development takes place at different rates in different regions. There are various causes of uneven development and a number of policies to change this.
Case study: Uneven Development in China
Industry
Industry
There are many different types of industry.
We can classify industry into three main categories:
Primary – these industries extract raw materials directly from the earth to the sea. (LICS)
- Farmers
- Coal-miners
- Fishing
Secondary – these industries process and manufacture products from raw materials. (MICs)
- Car manufacturing
- Iron and steel industry
Tertiary - these industries provide a service. (HICs)
- Doctor
- Lawyer
- Cleaner
- Banker
- Waiter
- Retailing
- Teaching
- Dentistry
Quaternary – these industries incorporate a high degree of research and technology in their processes and employ highly qualified people.
- Biotechnology
- Computer programing
Industry as a system
- Inputs are everything that goes into the system. The main three inputs are:
* Physical inputs: These include raw materials
* Labour
* Capital - Processes are all the things that happen to those inputs, to help turn them into outputs. These include:
* Production
* Factory maintenance
* Packaging
* Transport - Outputs. The finished products include:
* profits
* wages. - Feedback includes anything that improves the system, such as:
* Customer feedback. Companies find out what consumers think of their products through market research. They may use this to improve their product to sell more and increase their profits.
* Profits - the money left after inputs (staff wages, raw materials, machinery and buildings etc) have been paid for.
The pre-industrial phase
The primary sector leads the economy and may
employ more than 2/3 of the working
population. Agriculture is the most
important
The industrial phase
The secondary and tertiary sectors increase in
importance. The primary sector declines
