Economic Inequality Flashcards
Developed countries
Northern hemisphere. Australia & New Zealand. Strong economies. Well-developed. Wealthy Industrialised. Secondary & Tertiary sectors. High standard of education. High-quality infrastructures.
Quickly developing countries
Tiger economies Rapid industrialisation - increased employment in secondary Focus on exporting goods Wages increasing Improvement in standard of living Brazil, China, Mexico
Slowly developing countries
Third world countries Southern hemisphere Over-reliant on primary sector Little manufacturing or services Famine War High birth rate Sudan, Ethiopia
Measuring development
GNP (Gross National Product) capita
Life Expectancy
Adult literacy rate
Years of schooling
What is GNP used to find?
Stage of economic development
Rate of economic development
Higher the GNP, more developed the economy
Finding the GNP
Total earning in one year / Total population
GNP weakness
Measure economic wealth only.
No account of cultural development, health, education, and other social services.
Calculates only average wealth. Ignores fact wealth is often unequally distributed.
Eg. Ireland has high GNP, but more than half of wealth is controlled by 5% of people.
Why our world is so unequal
200 years ago people in north & south had similar living standards. Today there is a big difference.
Three main reasons:
Colonialism,
Trade,
Debt and Corruption.
Colonialism
European countries colonised many parts.
Means they took over countries, making them colonies.
Often done by force.
Exploited raw materials & mineral wealth.
Stripped countries of natural resources.
Examples of colonialism
Spain + Portugal colonised Central & South America.
Britain + France colonised parts of Africa & many parts of Asia.
Germany, Belgium, The Netherlands, and Portugal colonised parts of Africa.
Effects of colonialism in Ireland
British exploited Ireland in various ways:
Cleared forests to provide wood during Industrial Revolution.
Exported farm produce at low price.
Took land from Irish during plantations.
No secondary industry, which stopped economy development.
Inequality
World is unequal.
Huge social & economic inequalities between places.
Many countries rich, others very poor.
Rich mainly in north, poor mainly in south.
Poor usually called Developing countries, rich usually called Developed countries.
Trade
European countries use their colonies to provide them cheap raw materials.
Include unprocessed minerals - bauxite, crude oil, uranium, diamonds.
Also include cash crops, crops frown specifically for export - coffee, tobacco, cotton, cocoa.
Countries in north buy these natural resources cheaply, then process into finished products. Sold at high profit, often to poor countries of south.
MNCa set up in less developed countries due to low paid workers.
Effects of trade: Coffee production
Worldwide commodity - raw material bought, sold on world market.
Coffee beans - Uganda, Kenya, Ivory Coast.
Next to oil, most important commodity in world.
Over 12 mil employed in coffee industry.
How coffee is grown
Plantations - large areas of land where coffee is grown
Owned by foreign companies - low wages
Local farms - grow coffee as cash crop
Farmer receives cash for crop
Exploitation of the countries of the south & trade
Price - large profits go to companies not farmers
Farmers don’t get fair price
Protectionism - look after own profits
High taxes on processed coffee (tariff barriers)
Dependency - over-dependency on coffee production
Price fluctuation can damage economies
Difficult to improve infrastructure or invest
How coffee is grown
Plantations - large areas of land where coffee is grown
Owned by foreign companies - low wages
Local farms - grow coffee as cash crop
Farmer receives cash for crop
Exploitation of the countries of the south & trade
Price - large profits go to companies not farmers
Farmers don’t get fair price
Protectionism - look after own profits
High taxes on processed coffee (tariff barriers)
Dependency - over-dependency on coffee production
Price fluctuation can damage economies
Difficult to improve infrastructure or invest
Debt and corruption
Development difficult bc of it
Owe foreign banks large loans + interest payments
Healthcare and education suffer
Corrupt leaders take money for personal wealth
Life expectancy
Income levels do not tell us everything about quality of life of people in country.
Human Suffering Index
Measures quality of life using 10 factors
Factors of human suffering index
Life expectancy Income per person Daily Caloric Intake (amount of food available) Level of inflation Availability of clean water Civil Rights Vaccinations of infants Political freedom Numbers in secondary school Communication technology
Aid to the South
Aid is given by rich countries to poor countries.
Who gives aid?
Individuals
Government
Types of aid
Non-governmental Bilateral Development Multilateral Emegency Tied
Non-governmental aid
Aid given by voluntary groups
Eg in Ireland: Trocaire, Concern, Oxfam
Bilateral aid
Aid given by one government to another
Irish government to Kenyan governments
Development aid
Long-term aid given to improve roads, water supplies, schools, etc.
Multilateral aid
Countries/Governments give money to World Institutions such as United Nations who distribute the aid.
Emergency aid
Aid given by countries and agencies to victims of disasters such as drought, earthquakes, etc.
Tied aid
Wealthy countries give aid to countries in need, but with strings attached.
NGOs (Non Governmental Organisations)
Voluntary organisations
Collect money which they use for many different projects in developing world
Help people to set-up a health clinic or school, make wekls, grow crops, start small companies, irrigate their land
