the changing economic world

Question 1

define development:

Answer 1

Positive progress that makes things better. As a country develops, people’s standard of living and quality of life will usually improve. Different factors affect a country’s level and speed of development.

Question 2

what is the development gap?

Answer 2

The difference in standard of living between the richest and poorest countries.

Question 3

describe GNI:

Answer 3

GNI = Gross National Income
- economic measure.
- a common measure of wealth and income, used by the World Bank.
- the total value of the goods and services produced by a country, plus money earned from and paid to other countries. It is expressed as per capita (per person) of the population.

Question 4

what are the GNI per capita’s that classify a country as an HIC or an LIC?

Answer 4

HIC GNI per capita: $14,005 or above.
LIC GNI per capita: $1,145 or less.

Question 5

how do you calculate GNI per capita?

Answer 5

money a country earns per year / country’s population.

Question 6

describe HDI:

Answer 6

HDI = Human Development Index
- social measure.
- created by the United Nations.
- composite index (made up of many different elements).

Question 7

what are the three indicators that HDI uses to show a country’s development?

Answer 7

• GNI per capita.
• number of years of education.
• life expectancy at birth.

Question 8

describe the indicator - death rate:

Answer 8

• the number of people who die in a year for every 1000 people in a population.
• low number in an HIC.
• less reliable. some more developed countries (e.g. UK, Germany, Japan) have older populations and death rates will be high. less developed countries (e.g. Ivory Coast, Bangladesh) have younger populations, so death rates may be lower.

Question 9

describe the indicator - literacy rate:

Answer 9

• the percentage of people who have basic reading and writing skills.
• high percentage in an HIC.
• high rate shows that a country has a good education system.

Question 10

describe the indicator - life expectancy:

Answer 10

• the average number of years a person may expect to live when born.
• high number in an HIC.

Question 11

describe the indicator - number of doctors:

Answer 11

• the number of doctors for every 1000 people.
• high number in an HIC.
• indicates how much money a country has to spend on medical services.

Question 12

describe the indicator - birth rate:

Answer 12

• the number of children born in a year for every 1000 people in a population.
• low number in an HIC.
• reliable measure. as a country develops, women are more likely to be educated and want a career rather than stay at home. they marry later and have fewer children.

Question 13

describe the indicator - infant mortality:

Answer 13

• the number of deaths of infants under one years old per 1000 live births in a given year.
• low number in an HIC.
• useful measure of the country’s healthcare system.

Question 14

describe the indicator - access to safe water:

Answer 14

• the percentage of the population that has access to safe water.
• high percentage in an HIC.
• a high percentage of access to clean water shows a country has modern infrastructure, such as dams, reservoirs, and water treatment plants.

Question 15

what are some limitations of development data?

Answer 15

• data could be out of date or hard to collect (e.g. due to a disaster/war).
• data could be unreliable (e.g. infant mortality rates could be much higher than a country reports).
• government corruption may mean that data is unreliable.
• rapid migration can make it hard to accurately record population and earnings.
• indicators mainly focus on the formal sectors (e.g. the capital city, which is much more developed) than on the informal sectors. this is very important in LICs.

Question 16

define the DTM:

Answer 16

DTM = Demographic Transition Model
- A structure of changing population structure and development.

Question 17

what are some limitations of the DTM?

Answer 17

• based on European countries.
• assumes all countries will pass through all of the stages (some countries may never reach every stage).
• does not factor in migration in/out of the country.

Question 18

describe stage 1 of the DTM:

Answer 18

• highly fluctuating birth and death rates (roughly 35 per 1000 people). giving no or hardly any population growth.
• limited birth control and family planning.
• children are the source of future income.
• high incidence of disease.
• poor nutrition and famine.
• poor levels of hygiene.
• the UK was at this point before 1760.

Question 19

describe stage 2 of the DTM:

Answer 19

• birth rates remain high but death rates fall rapidly to around 20 per 1000 people, giving a rapidly expanding population.
• improved public health.
• decrease in child mortality.
• improved medical provision and vaccinations.
• improvement in food production (better nutrition).
• improved transport to move food, doctors, etc.
• the UK was at this point between 1760 and 1880.

Question 20

describe stage 3 of the DTM:

Answer 20

• birth rates fall rapidly to around 20 per 1000 people. death rates continue to fall (15 per 1000 people), giving a slowly increasing population.
• women are now educated and having their own careers and therefore are having children later on or not at all.
• preference for small families.
• increased personal wealth and desire for material possessions.
• the UK was at this point between 1880 and 1940.

Question 21

describe stage 4 of the DTM:

Answer 21

• low birth rates (16 per 1000) and low death rates (12 per 1000), which fluctuate slightly to give a steady population but a slight increase.
• population growth is small.
• fertility is dropping in men and women.
• more women in the work force.
• the UK has been at this point since 1940.

Question 22

describe stage 5 of the DTM:

Answer 22

• death rate slightly exceeds birth rate. population declines.
• greater financial independence of women.
• concerns of population growth and resources.
• increase in same sex relationships.
• rise in the concept of childlessness.
• ageing population causes an increased death rate.
• the UK has not yet reached this point, but Japan and Italy has.

Question 23

what are some physical causes of uneven development?

Answer 23

• landlocked countries have no coastline and so can’t trade effectively via ports like Southampton. this affects their economy.
• extreme weather such as draughts can cause famine. damages from tropical storms in the Philippines cost the country 5% of their GDP.
• tropical areas have more climate related diseases (e.g. malaria transmitting mosquitoes), meaning people are unable to work and earn money.

Question 24

what are some historical causes of uneven development?

Answer 24

• many former African colonies have found it difficult to cope after independence. civil unrest and war has been common. this affects the economy.
• many European nations became richer as they formed colonies in Africa and North America. plantations were set up, using slave labour. the profits went to the rich countries.

Question 25

what are some economic causes of uneven development?

Answer 25

• most LICs have a lot of primary industry like fishing and farming. products like tea and coffee are grown in African countries, but are sold for very low prices. often, growers make little profit.
• lack of clean water can damage health and be a basic barrier to economic development.
• most of the world’s trade is between rich countries in power. LICs often sell raw materials to HICs and NEEs for a very low price do it is very difficult for them to become richer. HICs and NEEs export manufactured products which can be sold for high prices.
• prices for raw materials like coffee, rice and copper vary greatly from year to year, so there is no reliable income for poor countries which sell these primary products.
• HICs and NEEs have many more secondary (factories) and tertiary (services) industries which command high prices.

Question 26

what are some consequences of uneven development?

Answer 26

• wealth is unevenly distributed between people and regions - some are rich, the rest are poor.
• health care and life expectancy is lower in poorer countries.
• education is poor in LICs as the money isn’t available to invest in schools, so literacy levels are low. people can’t get qualifications they need to get better paid jobs in the tertiary and quaternary sectors.
• quality of life in poorer countries is poorer (housing, health, education, living conditions).
• international migration occurs as people move away from poor and into rich countries (push and pull factors). this puts pressure on HIC cities (e.g. Southampton) with housing shortages, pressure on schools and health services, and unemployment.

Question 27

describe global wealth inequalities statistics:

Answer 27

• USA isn’t the wealthiest country (Qatar is), but it is the world’s most important economic ‘engine of growth’.
• in 2014, fastest growth in wealth was in North America, which now holds 35% of the world’s total wealth. this is held by just over 5% of the world’s adult population.
• China has recorded the highest economy growth since 2000. personal wealth in India and China has quadrupled since 2000.
• Africa has a 1% share of global wealth.

Question 28

describe the health situation in LICs:

Answer 28

• 4 in every 10 deaths are among children under 15.
• 2 in every 10 deaths are among people over 70.
• childbirth complications are among one of the main causes of death for children under 5.
• infectious diseases are among the main causes of death: lung infections, HIV/AIDs, malaria and TB account for 1/3 of all deaths.

Question 29

describe the health situation in HICs:

Answer 29

• only 1 in every 100 deaths are among children under 15.
• 7 in 10 deaths are among people aged 70 and over.
• lung infections are the only main infectious causes of death.
• the main causes of death are chronic diseases: heart and lung diseases, cancer, dementia, diabetes.

Question 30

describe malaria:

Answer 30

• life threatening disease caused by parasites transmitted to people by infected mosquitoes.
• in Africa, one child dies every minute from malaria, although it’s preventable and curable.
• in 2013, malaria caused over half a million deaths, mostly among African children (this is 80% of all malaria deaths worldwide).
• malaria is concentrated on the tropics, where the climate allows malarial mosquitoes to thrive.
• the wealthier and more developed African countries have fewer malaria cases as they have vaccination programmes.

Question 31

describe international migration:

Answer 31

• international migration reached a high in 2015. poverty and conflict meant 14 million people were forced from their homes.
• African immigrants are trying to reach Europe by boat. in the first half of 2015, 50,000 immigrants landed in Italy - many of these refugees were fleeing conflict and persecution.
• the UK receives computer engineers and doctors from Poland and India. these are highly skilled people. the rate of development of their NEE home countries as a result begins to slow (‘brain drain’).
• migrants from LICs send home remittances. for Nepal, remittances make up 25% of its GDP.

Question 32

describe the development gap and technology:

Answer 32

• people in LICs are now more aware of the development gap between them and HICs. many people in LICs are finding out about the ‘bright lights’ of richer countries as technology spreads.
• in 2015, there were 7 mobile phones for every 10 people in Africa.

Question 33

how does a country’s weather, soil fertility and its proximity to a plate boundary affect its development?

Answer 33

• calm predictable weather means countries can plan their crop growth throughout the year for maximum efficiency, and also reduces the chance of extreme weather events.
• good soil fertility also means crop yields are higher: countries can sell some of these crops to other countries for profit.
• if a country is far away from a plate boundary, it isn’t as subject to damaging earthquakes and volcanic eruptions.

Question 34

describe microfinance loans, and their advantages and disadvantages:

Answer 34

• small scale financial support direct from banks or members of the public to help individuals or families set up businesses.
• loans are usually less than $100 with very low interest. loans will be paid back when the business eventually kicks off.
• it creates jobs and stimulates the LIC economy.

advantages:
- helps people who don’t normally borrow from big banks.
- the loans are small and easy to pay back with the profits of their business.
- helps people to earn more money which they can invest into their family, their community, and in helping the area to develop.

disadvantages:
- a loan still needs to be paid back with interest. what if the person can’t afford that, or what if their business fails? they are then once again in personal debt.

Question 35

describe debt relief, and its advantages and disadvantages:

Answer 35

• during the great recession of the 1980s, many LICs borrowed money from organisations such as the World Bank, in order to continue developing their country.
• these came with interest rates applied.
• now, these LIC economies cannot keep up, and are spending the majority of their GDP repaying their loan, and can’t use it for their own development.
• debts are either reorganised to be more manageable or are reduced.

advantages:
- if debt relief means LICs ca now afford to pay back their loan, therefore they can now use their GDP for their own development.

disadvantages:
- deferring payments doesn’t cut the debt, it just puts it off for a while.
- banks and other countries do not like to lose money by writing off huge million or billion dollar debts.

Question 36

describe fair trade, and its advantages and disadvantages:

Answer 36

• HIC businesses buy raw materials from LIC farmers, as cheaply as possible for maximum profit. Farmers have no choice but to sell these products to these unfair businesses. the farmers feel powerless, as if they have no choice.
• many countries rely on farming as their main source of income and trade but crop prices can vary as they’re based on weather and climate variations.
• farmers cannot invest in the future.
• fairtrade schemes give them a consistent market price every year.

advantages:
- having a guaranteed price for a product every year means farmers can plan and invest in a more positive future for themselves and their family. they can improve their health, education, and quality of life.

disadvantages:
- you must work cooperatively with other farmers, you cannot work by yourself.
- fairtrade products cost more in shops and rely on people being willing to pay that higher price.

Question 37

describe using intermediate technology, and its advantages and disadvantages:

Answer 37

• small scale projects such as farming and making clean water.
• these projects involve the locals and use technology they can fix and maintain, which is not too high-tech or complex.
• it improves the development of the country by helping the people.

advantages:
- if technology is correct, it can save people hours of work, improving the quality of life for the whole of the community.
- hand pumps provide clean water to a whole village or community. it improves health, freeing up money to spend on something other than healthcare.
- cheap, not much energy required, easy to repair and maintain.

disadvantages:
- only helps a small number of people.
- LIC governments could become to dependent on NGOs, instead of developing their own solutions to their country’s problems.

Question 38

describe aid, and its advantages and disadvantages:

Answer 38

• help that is given by HIC governments or by NGOs such as Oxfam.
• help can be money, skills training, food, technology, or emergency supplies.
• aid can be short term or long term.

advantages:
- can provide vital help when needed quickly after a natural disaster.
- if done well, can improve infrastructure for people, teaching them life skills and educating them, and can impact their quality of life positively.

disadvantages:
- some aid is a loan, not a gift, and means the LIC country now owes the HIC country,
- some aid is only given if LIC countries do favours for HIC countries.
- some aid never even reaches the poorest, due to government corruption.

Question 39

give some tourism statistics in Kenya:

Answer 39

• travel and tourism make up 8.5% of total jobs.
• tourism adds $7.9 billion to Kenya’s GDP.
• tourists have spent $1.9 billion in Kenya.
• in 2019, it had 2.04 million overnight visitors.

Question 40

how does tourism in Kenya reduce the development gap between it and other countries?

Answer 40

• the Kenyan government can tax the Kenyan tourist workers and companies so this tax is used by the Government to help develop the country. they can spend money on hospitals, schools, and electrical supplies nationwide. therefore, even villages that don’t experience tourism benefit from tourism.
• foreign currency brought to the region by tourists can be invested improving local education, health, and other services so improved health means lower infant mortality rates, healthier workers and higher life expectancies. economic input also raises the GNI. the development gap reduces.
• this only happens in tourist areas, though, to look good.
• jobs for local people are created from tourism, giving people the chance to learn new skills in tourism services. these are better paid. they spend these wages in their local shops, so tourist businesses are paid better wages, which they can spend on other local shops, boosting their businesses, and so on.
• POSITIVE MULTIPLIER EFFECT.

Question 41

describe the different sources of aid to LICs:

Answer 41

• bilateral aid: HIC governments can provide aid to LIC governments.
• humanitarian aid: NGOs (e.g. Oxfam, Red Cross) provide aid to LIC governments.
• multilateral aid: the World Bank and the UN provide aid to LIC governments.