Economic Development Flashcards
What are the three main global groups?
- LICs
- NEES
- HICs
What are factors which determine a countries development?
- economic growth
- technological growth
- typical quality of life
What factors make up quality of life?
- economic status (income and housing)
- social status (friends/family/education)
- physical status (diet/ environmental quality)
- psychological status (happiness/security/freedom)
What is GNI?
Gross national income
How is GNI calculated?
By adding together:
- the total value of goods and services produced by the population
- the income earned from investments that’s its people and businesses made overseas
How many LICs are there in the world?
30
What is the maximum GNI that an LIC can have?
$1,045
How many NEES are there?
80
What are features of NEEs?
- high rates of economic growth
- rapid factory expansion and industrialisation
- investment from TNCs (transnational corporations) eg shell in Nigeria
- middle income
How many HICs are there?
120 including small HICs
Describe pattern of HICs
- Almost all in northern hemisphere apart from New Zealand and Australia
- mostly in Western Europe, North America, Eastern Asia and the Middle East
Does Asia have more NEEs or LICs?
NEEs
Why is the Brandt line dividing the rich north and poor south irrelevant
- chins is now the worlds biggest economy
- several of the highest income countries are in the the south
- the GNI per capita of some EU members is lower than Brazil and Malaysia
- large numbers of billionaires can be found in every continent
Ways of measuring social development
- literacy rate
- people per doctor
- access to safe water
- infant mortality
- life expectancy
Limitations of economic development?
- people can lie about data eg their income
- data may be hard to collect
- rapid migration makes it hard to know how many people live in an area
- the currency of dollars to other currencies changes every day
- errors and omissions can creep into calculations
What is Hunan Development Index HDI made up of?
- life expectancy
- income
- education
What is the scale of Human Development Index?
0 to 1
What happens in all of the stages of the Demographic Transition Model (DTM) regarding population?
- stage 1- high fluctuating
- stage 2-early increase
- stage 3- late increase
- stage 4- low fluctuating
- stage 5- decline
Give examples of countries in each stage of the DTM
- stage 1- Nothing
- stage 2- Sierra Leone (LIC)
- stage 3- Bangladesh (NEE)
- stage 4- USA (HIC)
- stage 5- Germany (HIC)
How does rapid population growth impact development?
- over population which means mass unemployment
- environmental degradation caused by over grazing
- reduces health and happiness due to lack of food
What are the historical reasons for varying levels of national development?
- colonialism caused conflict
- independence gained by a poor country
- political problems
How is Development affected by economic factors?
- food prices fluctuate wildly depending on competition and quality of crops
- corrupt leaders of LICs have benefitted from selling resources cheaply to TNCs
- International organisations have not done enough to establish fair terms on global trade
- poor trade links
How do physical factors affect development?
- physical hazards cause destruction of homes and schools
- physical hazards decrease life expectancy
- coastlines- all landlocked counties are LICs or NEEs
- few raw materials available
What are the consequences of uneven development?
- disparities in wealth
- disparities in health
- International migration
What measures disparities in countries
- The Gini coefficient
- 0 means everyone has the same income
- 1 means one person has the countries entire income
Which countries have the highest levels of disparities?
LICs and NEEs
How does uneven development lead to international migration?
- people search for a better life (economic migrants)
* people are forced to leave due to persecution or disasters)
Why is international migration increasing?
- there remains a high development gap between LICs and HICs
- technology spreads and people find out about the bright lights of other places
What strategies can be used to reduce the development gap?
- industrial development
- tourism
- microfinance loans
- intermediate technology
- fair trade
- aid
- debt relief
- investment
How is aid useful to an LIC?
- money or resources can be used in development projects for example constructing schools
- aid can be wasted by corrupt governments
- once money runs out projects stop working if there isn’t enough support
How is debt relief useful to an LIC?
- when a country’s debt is cancelled
- it helps countries begin to develop instead of paying back loans
- for example Zambia had $4 billion cancelled in 2005 and could then start a free health care scheme
How is investment useful to an LIC?
- foreign direct investment (FDI) is when people in one country but property or infrastructure in another
- FDI leads to better finance, technology and expertise meaning better infrastructure and services
How is industrial development useful to an LIC?
•developing industry increases GNI and helps improve levels of development as productivity, skill and infrastructure are improved
How is tourism useful to an LIC?
- increased income
* leads to increased development
How is microfinance loans useful to an LIC?
- small loans given to people in LICs
- enables them to start their own businesses and become financially dependent
- not clear that microfinance can reduce poverty on a large scale
How is using intermediate technology useful to an LIC?
- includes tools than are affordable, simple to use and improve quality of life
- for example solar panels LED lightbulbs are used in Nepal
- this allows people to work in their homes or businesses
- as a result, skills, income and industrial output can increase
How is fair trade useful to an LIC?
- gets farmers a fair price for goods produced in LICs
- this allows them to provide for their families
- a large proportion of people in LICs are farmers so this reduces the development gap
- however only a small amount actually reaches the farmer
