Emerging And Developing Economies

Question 1

What factors does the human development index include and what are its limitations?

Answer 1

• Real GDP per capita (PPP)
• Health-life expectancy
• Education - mean school years

Limitations:
• Ignores gender inequality eg Afghanistan
• scale and depth of inequality - years of healthy life
• Well being
• Sustainable development

Question 2

What are the factors influencing growth + development?

Answer 2

• Primary product dependency
• Commodity prices tend to be volatile - increased risk, low investment eg Malawi raw tobacco
• Savings gap: Harrod domar model
• Capital flight - Wealthy individuals invest overseas
• Demographic factors - working age emigration, aging population
• Debt - High debt repayment, leakage from circular flow
• Access to credit + banking - needs thriving business sector
• Infrastructure - increase LRAS
• Education + skills - Productivity, LRAS
• Absence of property rights - affects FDI