Global Groupings Flashcards
What are three main groupings?
LDCs
NICs
Ex Soviet States
What are LDCs?
Least Developed Countries- a group of around 50 countries that are defined by very low incomes poor health, low education, economic instability and their heavy debt to richer countries e.g Mozambique.
Economies are usually based on agriculture- crop failures can lead to economic disaster.
What are NICs?
Newly Industrialised Countries e.g China and India.
Economies are usually growing fast and there has been a recent move from a mostly agricultural economy to one involving manufacturing and exporting.
What are ex soviet states?
Russia and some of the surrounding countries in central Asia and eastern Europe used to make up one large state called the Soviet Union.
A lot of independent countries have been created since the Union collapsed in 1991- these are mostly now classed as middle income countries, e.g Estonia.
Recent growth in some ex-Soviet states is due to the exploitation of natural resources, e.g oil and gas in Kazakhstan.
What is OPEC?
The Organisation of Petroleum Exporting Countries is a group of 13 major oil producing countries, e.g Venezuela and Iran.
OPEC countries control around two-thirds of global oil reserves.
Because they’re such a large group in control- they get fair prices.
What is OECD?
The organisation for economic cooperation and development is a group of around 30 of the richest and most powerful countries- the top 8 are called G8.
They meet to discuss and provide possible solutions to economic, environmental and social issues.
Members of the OECD are always changing.
What are trade blocs?
Groups of countries that make agreements to reduce barriers to trade, e.g by removing tarrifs (taxes on imported goods).
Blocs increase trade between members, whom can qork together as a larger organisation to trade with non members.
Benefits of membership of a trade bloc are linked to what two important concepts?
Economies of scale
Comparative advantage
What are economies of scale?
The advantages companies gain because of increased sales.
There’s a larger market within so its easier to trade.
More sales means more products, so companies buy more raw materials for their products, in greater numbers, saving money.
Buying raw materials in bulk means each product costs less so companies make more profit.
What is comparative advantage?
Countries can concentrate on developing specific industries.
Easier to trade as its less restricted.
Countries can specialise in producing things they’re good at making and trade for things they’re not so food at.
Production will increase in each member country because they’re concentrating on what they do best.
Give an example of a trade bloc.
NAFTA- The North American Free Trade Agreement between countries of North America, USA, Canada and Mexico.
Its made trade between members easier by removing things like taxes on some goods.
Trade between all three has increased but negative impacts such as job losses in the US because manufacturing has moved to Mexico where cheaper has occurred.
