Strategies influencing G and D Flashcards
Market orientated strategies for improving G and D
- Promotion of FDI
- Trade liberalisation
- Removal of subsidies (dependency)
- Floating exchange rate system
- Microfinance schemes
- Privatisation
Interventionist strategies for improving G and D
- Development of human capital (skills)
- Protectionism
- Managed exchange rates
- Infrastructure developments
- Promoting joint ventures with global companies
- buffer stock schemes
Other strategies for improving G and D
- Lewis Model
- Developing tourism
- Development of primary industries
- Fairtrade schemes
- Financial Aid
- Debt relief
- Role of IMF WB and NGOs
How can trade liberalisation improve G and D
Removing barrier to trade encourages competition which in time improves efficiency, also opens up access to new markets which improves growth
How can promoting FDI improve G and D
FDI helps to bring foreign wealth into a country and start business there which can bring in capital and new tech as well as create jobs
How can removing subsidies help to improve G and D
Can lead to more efficient allocation of resources which reduces amount of dependent inefficient businesses and increases amount of innovation, also helps gov debt
How can a Floating ex rate system help to improve G and D
Domestic firms aren’t protected by currency fluctuations so may become more efficient and productive in order to react to changes, reduces the need for the government in this area.
How can Microfinance schemes help improve G and D
Promotes entrepreneurship and alleviates poverty encouraging development
What are Microfinance schemes
provision of small scale loans to low income individuals and businesses
How can Privatisation improve G and D
Increases competition and competitiveness and innovation, also improves government finance
How can development of human capital improve G and D
Investing in education training and healthcare to enhance the skill of the workforce can help to reduce poverty and inequality, also make a more productive and innovative
How can Protectionism improve G and D
Protect infant domestic industries from foreign competition to help them get started to create more domestic industry, preserves jobs
Human Capital
economic value of a workers skills
How can managed exchange rates help improve G and D
Provides stability for international trade and can avoid currency crisis, helps for export led manufacturing growth
How can developing infrastructure improve G and D
Improving transport and public facilities helps improve living standards swell as attract FDI improve economic productivity domestically
How can promoting joint ventures with global companies improve G and D
local firms partner with foreign firms to gain knowledge and skills and access to new markets and tech
How can buffer stock schemes improve G and D
Governments maintain commodity stockpiles to protect farmers business and ensures price stability, also helps to alleviate absolute poverty by having food stockpiles
How does industrialisation help with G and D
Creates jobs and increases wages raising the standard of living, stimulates growth by transferring economy to manufactured exports
What is the lewis model step by step
- Excess agricultural labour transferred to industrial which increases both sectors productivity
- Profits from improved industry can be reinvested over and over to keep improving industry and stimulating growth
- Isn’t inflationary as wages don’t rise with transfer as it is an excess in agriculture
Flaws in the lewis model
- increases inequality gap
- harmful for environment
- not always an excess of labour in agriculture
- Industrial production is capital intensive not requiring loads of human labour
- Profits have to be re-invested locally
How can developing Tourism improve G and D
Creates jobs and brings in more valuable foreign currencies and investments
How can developing primary industries improve G and D
Boosts rural development decreasing inequality, provides raw material supply for industry, mining can be profitable
How can fair-trade schemes improve G and D
Supports small scale farmers decreasing inequality with fair wages, promotes sustainable agriculture
What are fair trade schemes
Offer individual farmers in developing countries guaranteed fair prices in return for acceptance of inspections and sustainable farming and employee welfare
