other strategies, development Flashcards
development of tourism
Country earns foreign currency from tourists, filling currency gap, This provides them with the funds to develop their economy and improve living standards
Also likely to gain FDI e.g. from multinational hotel chains, It can help to fund improvements in infrastructure, as tourism requires reliable electricity, airports, clean water etc. and so the government have an incentive to provide this. This investment will have a multiplier effect on the economy.
Employment can increase, though will be seasonal.
Income elastic nature of tourism means that as the global economy grows, demand for the industry will increase even further, allowing the developing country to continue development.
The government will see higher tax revenues due to higher income and higher profits. It can provide funds to allow countries to diversify.
example of development of tourism
Tourism and hospitality sector contributes 6.8% in India’s GDP
In Morocco, 7 eco-resorts are being built on the north coast where unemployment is 40%
development of tourism evaluation
Seasonal uemployment
Elastic nature may mean they will suffer in times of recession.
A large amount of wealth created will be withdrawn as TNCs repatriate their profits ,
causing problems involving capital flight.
Tourism destinations can go in and out of fashion , meaning some areas will see a loss of employment and that investment may only receive a short-term return.
On top of this, the country can suffer from a large number of externalities, including
pollution, waste, environmental damage and impact on culture.
Development of primary industries
Develops because of an abundance of natural resources. The development of a primary
industry provides funds to allow a country to diversify as well as allowing infrastructure development and better education
example of development of primary industries
Norway, the government uses some of its oil revenues to invest overseas and this increases supply of their currency, depreciating it and helping other industries to compete overseas. This overcomes the problem of Dutch Disease
development of primary industries evaluation
However, primary products are volatile and primary product dependency causes many issues. Primary industries also suffer from corruption.
fairtrade schemes
Fairtrade is ‘a trading partnership based on dialogue, transparency and respect, which seeks greater equity in international trade’. (WTFO)
how do fairtrade schemes lead to development
A fair price typically means that agreements are made to buy a guaranteed amount of produce over a period of time at a price which is above the market price when the agreement was made. This gives producers stability and raises their income.
The system means that child labour is not used and that production is sustainable
and does not take place at the expense of environmental degradation, ensuring sustainable growth and development.
examples of fairtrade schemes
Sri Lanka showed that those under fair trade had higher income and satisfaction, a greater understanding of the market and a more optimistic view of the future than those not under fair trade. They were able to save for the future and invest or provide financial support for their children. However, they still did not feel their income was sufficient.
fairtrade schemes evaluation
higher incomes reduces the incentive to diversify and keeps farmers engaged in low profit activities. On the other hand, it can be argued that it allows parents to send their children to school (whether because it provides the funds necessary or means children are no longer expected to stay at home to work the land) and this will allow them to gain skills which in the future will allow them to move away from agriculture
Aid
This is when a country voluntarily transfers resources to another or gives loans on
concessionary terms
different types of aid:
tied aid is aid with conditions attached, such as economic or political reforms
or a commitment to buy goods from the donor country
bilateral aid is directly from one country to another
multilateral aid is when countries give aid to an international organisation who
distributes it to other countries.
concessional loans are loans given on lower, or no, interest rates
how aid can lead to development
It can fill the savings gap , as outlined by Harrod-Domar, and thus provides funds for
investment, whether this be in infrastructure or in human capital.
can contribute to increased globalisation and trade as well as reducing world inequality.
examples of aid
The Ethiopian government has used international aid to boost economic development and lift millions out of poverty over the past 2 decades, through significant investment in public services, Since the early 1990s, primary school net enrolment has risen from 20% to 93%, and access to clean water from 14% to 65%. Since 2000, under 5 mortality has fallen by 60% and maternal mortality by 53%. The proportion of the population living in poverty has reduced from 44% in 2000 to 23% in 2018
aid evaluation
results in a dependency culture where countries are unconcerned by their finances as they know they can receive aid from another country.
it is unclear whether the money really reduces absolute poverty, as improving infrastructure does little to help those who suffering most.
Corruption means that money does not always go where it is meant to. In the long term, tied aid and concessional loans may mean that the country loses out. Since concessional loans still have to be repaid, this may limit where the money is spent; countries may only spend money on things they know will see a return in the short term.
It is difficult to know the best way to develop a country and therefore it is difficult to
know the best place to spend the aid
debt relief
Many countries suffer greatly from the high-interest repayments to loans they have taken out. It limits the growth of some of the poorest countries, whilst being relatively small for the countries and agencies that are owed the money. Therefore, it seems reasonable for the debt of developing countries to be written off.
It will ease government finances and allow more money to be spent on provision of services and infrastructure to aid development.
