Emerging and developing economies Flashcards
What are tiger economies?
a group of economies in SE Asia that had rapid economic growth from 1960s
Name the four tiger economies.
Hong Kong
Singapore
South Korea
Taiwan
Does development of countries refer just to economic growth?
No, it needs to also lead to improved living conditions, ie reduced poverty and better education, health, etc.
Name the five BRICS countries.
Brazil, Russia, India, China, South Africa
What values can the Human Development Index take for a country?
0 to 1
What three things does the Human Development Index measure?
health
education
standard of living
How is health measured in the Human Development Index?
life expectancy
How is education measured in the Human Development Index?
mean and expected years of schooling
How is standard of living measured in the Human Development Index?
GNI per capita in PPP$
Why is dependence on primary products (eg agriculture) a frequent factor in lack of development?
low productivity and dependence on volatile commodity prices
Explain the low-level equilibrium trap in developing countries.
capital shortages lead to low incomes,
so low savings, so low investment
What is the Harrod-Domar model?
a model of economic growth that emphasises the importance of savings and investment
What are the four stages of the Harrod-Domar model?
saving > investment > capital accumulation > output and income > saving > …
What is the savings gap?
when a country can’t generate a sufficient flow of savings for investment
What might prevent savings being used for investment?
- no access to financial markets (so potential borrower can’t access the savings of others)
- interest rates too high (so potential borrowers can’t afford to borrow)
- interest rates too low (so no incentive to save)
- no willing entrepreneurs with ideas or willingness to take the risk
What is the foreign currency gap?
when developing country is unable to import goods needed for development because of shortage of foreign exchange
What is capital flight?
when savings generated in a developing country are invested abroad
What was Malthus’s theory of population?
That population will always tend to grow more than real wages due to diminishing returns to labour, being able to afford more children if real wages rise and deaths rates falling as real wages rise.
What is the demographic transition?
when improved health lowers death rate, birth rate then falls (as expect fewer children to die?) leading to low and stable population growth
Why is there often market failure in rural credit markets (and therefore little finance for vital projects in rural areas of developing countries)?
- information failure - no bank branches so people don’t know about banks and banks don’t have information needed to assess loan applications
- insecure property rights / lack of proof of ownership so no collateral
Give four reasons why there often a low level of education in developing countries.
- Few schools (and no capital to build more).
- Families can’t afford cost of schooling (uniform, books even if no fees).
- Education undervalued - children sent to work now rather than investing in education so can earn more in future.
- School curriculums based on colonial era rather than skills needed.
Name three geographical factors that may affect potential for economic growth in developing countries.
- adverse terrain eg mountains or deserts
- lack of ports if land-locked
- location eg far away from countries to trade with or not on trade routes
Name four health emergencies that have affected economic growth in many developing countries, particularly sub-Saharan Africa.
- famine
- HIV/AIDs
- Ebola
- Covid-19
What is the main advantage of export-led growth, as shown by the tiger economies?
- openness to international trade, so can achieve economies of scale through export-led growth
- political and macroeconomic stability
- high levels of human capital
