The Changing Economic World Flashcards
What is development?
The progress in a country in terms of:
- economic growth
- the use of technology
- quality of life
What economic factors can affect quality of life?
- income
- job security
- standard of living
What physical factors can affect quality of life?
- natural disasters
- diet/nutrition
- climate
- environmental quality
What social factors can affect quality of life?
- crime
- relationships e.g. arranged marriage
- education
- health
What psychological factors can affect quality of life?
- happiness
- security
- freedom
What does LIC stand for?
Low income county
What does HIC stand for?
High income country
What is a LIC?
A poorer country with a gross national income of $1045 or less
What is a HIC?
A richer country with an income per person of $12746 or above
What does NEE stand for?
Newly emerging economy
What are NEEs?
Countries that are experiencing high rates of economic development and rapid industrialisation
Examples of NEEs?
- Brazil
- Russia
- India
- China
- South Africa
(BRICS countries)
How is GNI calculated?
- by adding together the value of all good and services produced by a country as well as income
- then dividing by the population
What does GNI stand for?
Gross national income
How is GNI used to measure development?
Shows the average wealth of a country’s citizens
What are the limitations of GNI?
- misleading - figures include those who don’t work e.g. elderly
- inaccurate data - people lie about earnings
- rapid migration makes it hard to know where people live
- measured in US dollars - currency values change daily
How is literacy rate used to measure development?
Shows the percentage of people with basic reading and writing skills
Limitations of using literacy rate to measure development?
Carrying out surveys in LICs and conflict zones is difficult
What are the social ways of measuring development?
- literacy rate
- people per doctor
- access to safe water
- infant mortality rate (IMR)
- life expectancy
What are the economic ways of measuring development?
Gross national income (GNI)
How is people per doctor used to measure development?
The number of people who depend on a single doctor
Limitations of measuring development using people per doctor?
In NEEs people use phones for healthcare advice so this is not taken into account
How is access to safe water used to measure development?
Shows the percentage of people who have access to water that doesn’t carry a health risk
Limitations of measuring development using access to safe water?
- water quality can decline due to flooding/poor maintenance
* rising costs of water in cities forces people to start using unsafe sources
How is IMR used to measure development?
Shows the number of deaths of children under one year per 1000 births
What does IMR stand for?
Infant mortality rate
Limitations of measuring development using IMR?
Not all infant deaths are recorded and many children are buried in unmarked graves
How is life expectancy used to measure development?
Shows the average number of years a person can be expected to live
Limitations of measuring development using life expectancy?
Where IMR is high, average life expectancy will be lower than it actually is
What does HDI stand for?
Human development index
What does HDI take into account?
- income
- life expectancy
- education
How does HDI use education to measure development?
The HDI uses an education index based on the average number of years of schooling each person has in a country
What is the Brandt Line?
A visual depiction of the North-South divide between their economies
When was the Brandt Line proposed?
1980s
What is the Brandt Line based on?
GDP per capita
What is natural increase the difference between?
Birth and death rate
What is the DTM?
The demographic transition model
What is the first stage in the DTM?
High birth rate, high death rate, low population
What is the second stage in the DTM?
High birth rate, fall in death rate
What is the third stage in the DTM?
Declining birth rate, low death rate, population increasing
What is the fourth stage in the DTM?
Low birth rate, low death rate, longer LI
What is the fifth stage in the DTM?
Higher death rate due to ageing population
An example of a country that doesn’t fit the DTM?
Botswana - AIDS/HIV means death rate hasn’t dropped although birth rate has
Advantages of the DTM?
- shows change through time
- model was adapted to include a fifth stage - and other countries are following this pattern
- explains why things have happened in a particular order
- shows what has happened in the UK, European and North American countries
Disadvantages of the DTM?
- some NEEs have gone through the stages faster
- some African countries have seen a rise in death rate due to HIV
- assumes birth rate fell as a consequence of changes in death rate - but some countries may be more affected by culture
What are the physical causes of uneven development?
- landlocked countries - no sebourne trade and have to pay tax transport goods through other countries
- extreme weather - damaged infrastructure
- climate-related diseases - fewer people able to work
- lack of adequate supplies e.g. water
- climate change - flooding and more severe storms
What are the economic causes of uneven development?
- poverty - illness and lack of nutritious diet make development hard
- reliant on primary products
- debt
Case study to show how trade can slow down the economic development of countries?
Zambian copper - government bought all of the copper mines, borrowing money from the World Bank. other countries started selling copper as well; the demand and price dropped
Case study to show how physical causes can slow down economic development?
Haiti - 7.0 earthquake
- 300 000 people died - loss of workforce
- 300 000 injured - needed healthcare, no hospitals
- 25% of schools damaged - lack of education
- damaged infrastructure
What are the historical causes of uneven development?
- trade bloc e.g. EU - free trade between countries
- colonialism - European countries grew rich from slave trade - when colonies become independent they have a weak economic base
Why did European colonies have a weak economic base when they became independent in the 60s?
Many were primary product producers - leads to civil war and army taking over = corruption
What are the social causes of uneven development?
- rapid population growth
- poor water supply
- poor education means uneducated workforce
- poor health
What are the political cause of uneven development?
- corrupt governments
- civil war
- colonial past
- dictatorships
What is the Gini coefficient?
A ratio with values between 0 and 1 that show how equally wealth is distributed within a country (0 means wealth would be spread equally between everyone)
Which countries generally have a higher Gini coefficient?
LICs and NEEs, as well as China and the U.S.
Which countries generally have lower Gini coefficients?
European countries
What are the consequences of uneven economic development?
- lack of social opportunity - stuck in poverty
- lower growth of wealth
- political unstability - due to inequality
- poverty
- more international migration
What are economic migrants?
Poor people moving elsewhere to find work
What are refugees?
People who are poor or rich, fleeing war or persecution
Why does Europe need migrants?
Falling birth rates and lack of workers
Why do Europeans like to work in Britain?
They can earn a lot more than in their home countries
What are the main places that migrants have travelled from?
Places suffering from war e.g. Syria, Afghanistan, Iraq
What are the push factors of migration?
- cramped safe houses
- desertification - population too big for the food that is grown at farms
- war, conflict
What are the pull factors of migration?
- better, safer life
* more jobs = money
Why are places in Europe receiving more migrants?
- LI rising - people reaching retirement means a shortage of workers in some areas
- EU means more migration as well as influx of economic migrants and refugees from Africa and the MIddle East
- female employment has risen, and fewer multi-generational households
- few countries in the EU have birth rates that above the retirement rate
What does NGO stand for?
Non-governmental organisation
What is an NGO?
An aid charity
What is aid?
When a country or NGO donates resources to another country
What is short term aid?
Emergency help, usually after a natural disaster
What is long term aid?
Sustainable aid - improve resillience
What is multilateral aid?
When rich governments give money to an international organisation e.g. world bank and is redistributed to poorer countries
What is bilateral aid?
Aid from one country to another - often tied
What is tied aid?
Aid given with certain conditions e.g. the recipient country has to buy certain goods from the donor country
What is voluntary aid?
Money donated by the general public in richer countries and distributed by NGOs
Limitations of short term aid?
Reaches people in cities but not in rural areas
Limitations of long term aid?
People become dependant on it
Limitations of tied aid?
Poor countries may be able to buy products cheaper elsewhere
Limitations of voluntary aid?
People may not give if they believe their money won’t go to the right place
How can economic investment and industrial development help to close the development gap?
- developing industry increases GNI
- processing raw materials adds value
- trade leads to trickle down of wealth
e.g. hydropower
How can allowing TNCs into poorer countries help to close the development gap?
Bring in FDI which pays for factories and provides jobs
What is FDI?
Foreign direct investment - when people in one country pay for property in another. this injects cash into economies so better access to industry & finance
What are the limitations of allowing TNCs into LICs?
Only pay low wages - will only invest if they make a good profit
What are some ways of closing the development gap?
- aid
- economic investment and industrial development
- allowing TNCs into LICs
- fair trade
- microfinance
- intermediate technology
- debt relief
How can economic fair trade help to close the development gap?
Consumers pay more to ensure the farmer earns a good wage. If global price for bananas goes down, then the farmers will still get a regular income
What are the limitations of fair trade?
- higher cost
* most of profit still goes to the shop and importer
What is microfinance?
Small loans that can be made available to people in LICs
How can microfinance help to close the development gap?
People in LICs can start businesses and become independent
What are the limitations of microfinance?
May not be able to reduce poverty on a large scale
What is intermediate technology?
Tools, machines and systems to improve QOL and are simple to use
What is an example of how intermediate technology can help to close the development gap?
Solar-powerered LED bulbs in Nepal - allows people to study and work at home - skills and income which helps to boost economy and development gap
What is debt relief?
When some or all of a country’s debt is cancelled so they have money to develop
Case study for debt relief?
Zambia - $4 billion debt cancelledin 2005. In 2006 they had enough money to start a free healthcare scheme for people in rural areas
Limitations of debt relief?
Sometimes the money borrowed beforehand had not been used wisely e.g. PM of DR of Congo pocketed $4 billion that had been lent to his country
What is the case study for how tourism can help to reduce the development gap in a LIC?
Bhutan
What are the challenges that Bhutan faces?
- povery - 25% live in poverty
- climate change - malaria, floods, drought
- has no fossil fuels and must import oil
- poor roads - hard to transport goods
- rural-urban migration - shanty towns
In Bhutan, what does the money raised by the TDF go towards?
- education and healthcare
- protecting the environment
- protecting culture
Where is Bhutan located?
Between India and Tibet in China
What is gross national happiness?
4 principles that Bhutan’s tourism industry follows
What are the principles of GNH?
- sustainable and equal development
- environmental preservation
- good governance
- preservation of culture
How does tourism benefit Bhutan?
- bring jobs
- ecotourism funds conservation
- volunteer tourism brings skills and time
- improve infrastructure`
What is the TDF in Bhutan?
Tourism development fund - income generated from tourism tax which is spent on education, healthcare, environment and protecting culture
What is Nigeria’s recent economic growth mainly due to?
The money made from oil
What is helping Nigeria to diversify?
The growth of the manufacturing industry
How is the growth of the manufacturing industry in Nigeria helping it to develop?
- gives people a secure income and tax increases so there is more income for the government
- manufactured goods available to buy
- attracts foreign companies to invest in Nigeria
How has Unilever helped economic development in Nigeria?
- creates jobs
- workers cared for - fair trade
- promoted improvements in healthcare, education and water supply
What trade does Britain do with Nigeria now?
Nigeria exports raw materials and imports manufactured goods form Britain
How did Nigeria get in and out of debt?
- 60s - after it colonised, it spent lots of money on infrastructure
- 70-80s - ran out of money and couldn’t pay for public services
- 90s - Nigeria is Africa’s most indebted country
- 2000 - Nigeria’s debt is cancelled
- 2010 - growing economy again
Why isn’t aid always used effectively in Nigeria?
- corruption in government means aid is lost
* donors of aid may have political influence over who receives it
How does Nigeria benefit from aid?
- nets for life - education on malaria and provide mosquito nets
- world band - funds loans for businesses to help diversify economy
- uk government - funded health and HIV programme providing health and education in rural areas
How has industrial growth affected the environment in Nigeria?
- pollution of nearby land and rivers as toxic waste is dumped
- harmful pollutants go into open drains - people and ecosystems harmed
- lung problems from fumes
How has urban growth affected the environment in Nigeria?
- squats in most cities
- services have not kept up with growth of cities
- domestic waste is dumped on the streets
- traffic congestion means high levels of pollution
- forests have been destroyed through logging and agriculture
How has mineral and oil extraction affected the environment in Nigeria?
- tin mining - soil erosion so local water supplies polluted with chemicals
- oil spills - damage to freshwater and marine ecosystems
- oil spills - cause fires which release CO2 and cause acid rain
Who are the gaps in development between in Nigeria?
- the north and south
- the rural and urban areas
- the educated and uneducated people
How many migrants left Africa in 2014?
100 000 - 9000 travelling to Europe
What type of migrants are Nigerian migrants?
Economic migrants - escaping poverty
What is de-industrialisation?
The decline of a country’s manufacturing industry due to exhaustion of raw materials and competition from NEEs
