Other Strategies For Growth And Developement

Question 1

What is the Lewis model?

Answer 1

Argues that growth and development can be achieved by the migration of workers from a rural, primary sector ( low productivity, low income ) to the secondary sector, often urban ( higher productivity, increase in income + savings ) through higher wage incentives

Question 2

Advantage of development of tourism

Answer 2

• improvement in infrastructure
• more tax revenue for government ( allow improvements in public services )
• good for employment
• earns foreign currency and it labour incentivise ( services such as hotel, bars )
• multiplier effects

Question 3

Disadvantages of development of tourism

Answer 3

• may require more imports to get capital equipment
• industry is seasonal
• negative externalities effects : pollution , clean water for tourists, increase in waste, pollution on beaches
  -low paid jobs

Question 4

What are fair trade schemes?

Answer 4

• correct for market failure in primary industries such as:
• prevent unsustainable low prices for farmers
• address poverty and inequality for farmer in poor countries

Question 5

Advantages of fair trade schemes?

Answer 5

• higher prices for certified producers
• more income stability
• extra earnings can be spent on improving quality of product
• diversification
• improved working conditions
• environmental sustainability

Question 6

Disadvantages of fair trade schemes?

Answer 6

• some high price goes to processors not the farmers
• fair trade does not address key causes of poverty

Question 7

tied aid?

Answer 7

Aid with conditions attached

Question 8

Bilateral aid?

Answer 8

Aid from one country to another

Question 9

Multilateral aid?

Answer 9

Countries pay money to an international agency such as the world bank which then distributes it to countries that meet certain criteria

Question 10

What is debt relief?

Answer 10

When a country’s burden of debt becomes too high, debt servicing costs can become crippling - debt relief helps

Question 11

Advantages of debt relief?

Answer 11

• LDCs have more foreign currency to buy capital and consumer goods from developed countries
• more capital can be purchased
• can help reduce savings gap

Question 12

Disadvantages of debt relief?

Answer 12

• corruption may mean debt relief gains are channelled to gov officials not poor
• may be less effective than policies that reduce protectionism in developed countries