The Changing Economic World Flashcards
What is development?
Progress in economic growth, use of technology & improving welfare that country has made
What is the global development gap?
Difference in development between more and less developed countries
What is GNI?
Total value of goods and services produced by country in year (including income from overseas)
What is GNI per head?
GNI divided by population of county
What is GDP?
Total value of goods and services a country produces in a year
What is birth rate?
Number of live babies born per thousand of population per year
What is death rate?
Number of deaths per thousand of population per year
What is infant mortality rate?
Number of babies who die under 1 year old, per thousand babies born
What is people per doctor?
Average number of people for each doctor
As a country develops, the no. of people per doctor should…
Decrease
What is birth rate a measure of?
Women’s rights
What is literacy rate?
% of adults who can read and write
What is access to safe water?
% of people who can get clean drinking water
What is life expectancy?
Average age a person can expect to live to
What is HDI?
Calculated using life expectancy, educational level and income per head
What does the HDI value 0 represent?
Least developed
What does the HDI value 1 represent?
Most developed
Why can individual indicators be misleading if used on their own?
Because as country develops, some aspects develop before others (country may seem more developed than it is)
How were countries classified before?
Into 2 categories:
Richer countries = More Economically Developed Countries (MEDCs)
Poorer countries = Less Economically Developed Countries (LEDCs)
What was the problem with old, simpler classification?
Couldn’t tell which countries were developing quickly & which weren’t developing at all
What are happening to NEEs?
Rapidly getting richer as economy is moving from being based on primary industry to secondary industry
Why is using GNI per head misleading when used on its own? Give an example to back your answer
Bc it’s an average, hide variations between regions in county, between classes
e.g. GNI per head of Russia = might seem quite developed BUT in reality, there’s small no. of extremely people and a lot of very poor people
What does DTM stand for?
Demographic Transition Model
What does a DTM show?
Shows how changing birth rates and death rates affect population growth
What is natural increase?
When birth rate > death rate
What is natural decrease?
Death rate > birth rate
What are the 5 stages of DTM are linked to?
A country’s level of development
In stage 1, what is the birth rate like?
High and fluctuating
In stage 1, what is the death rate like?
High and fluctuating
In stage 1, what is the population growth rate?
0
In stage 1, what is the population size like?
Low and steady
Give an example of a country in stage 1
No counties but some tribes in Brazil
In stage 2, what is the birth rate like?
High and steady
In stage 2, what is the death rate like?
Rapidly falling
In stage 2, what is the population growth rate?
Very high
In stage 2, what is the population size like?
Rapidly increasing
Give an example of a country in stage 2
Gambia
What does stage 1 represent?
The least developed
Why is the birth rate high in stage 1? Give 2 reasons
- No use of contraception
- People have lots of children because poor healthcare means that many infants die
Why is the death rate high and life expectancy low?
Due to poor healthcare or famine
What does stage 2 represent?
Not very developed = many LICs
What is the economy based in stage 2?
Agriculture
Why is the birth rate high in stage 2?
People have lots of children to work on farms
Why did the death rate decrease and life expectancy increase?
Due to improved healthcare and diet
In stage 3, what is the birth rate like?
Rapidly falling
In stage 3, what is the death rate like?
Slowly falling
In stage 3, what is the population growth rate?
High
In stage 3, what is the population size like?
Increasing
Give an example of a country in stage 3
India
What does stage 3 represent?
More developed = most NEEs in this stage
Name 3 reasons why birth rates are decreasing in stage 3
- Women have more equal place in society & better education
- Use of contraception increases and more women work instead of having children
- Economy changes to manufacturing = income increases and fewer children needed to work on farms
Why does life expectancy increase & death rate decrease in stage 3?
Healthcare improved
In stage 4, what is the birth rate like?
Low and fluctuating
In stage 4, what is the death rate like?
Low and fluctuating
In stage 4, what is the population growth rate?
0
In stage 4, what is the population size like?
High and steady
Give an example of a country in stage 4
UK
In stage 5, what is the birth rate like?
Slowly falling
In stage 5, what is the death rate like?
Low and steady
In stage 5, what is the population growth rate?
Negative
In stage 5, what is the population size like?
Slowly falling
Give an example of a country in stage 5
Japan
What do stages 4 and 5 represent?
Most developed = most HICs in one of these stages
Why is the birth rate low?
Because people want possessions and high quality of life, and may have dependent elderly relatives, less money available for having children
Why is death rate is low and life expectancy is high?
Healthcare is good
Name 4 physical factors of uneven development
- Poor climate
- Poor farming land
- Few raw materials
- Lots of natural hazards
Explain how a poor climate can lead to uneven development
- If country has poor climate = not much will grow
- Reduces amount of food produced = malnutrition
- Malnourished = low quality of life
- People have fewer crops to sell = less money to spend on goods/servcies
- Reduces quality of their life
- Government gets less money from taxes
- Less money to spend on developing country
Explain how poor farming land can lead to uneven development
- If land in country is steep or poor soil (or no soil) = won’t produce a lot of food
- (Same effects as poor climate)
Explain how few raw materials can lead to uneven development
- Countries without many raw materials (e.g. coal, oil or metal ores) = make less money
- Less money spent on development
- Some countries have lot of raw materials but still aren’t very developed ∵ don’t have money to develop infrastructure to exploit them
Explain how lots of natural hazards can lead to uneven development
- Countries with lots of natural disasters (e.g.. Bangladesh, which floods regularly) = have to spend a lot money rebuilding
- ∴ natural disaster reduce quality of life & reduce amount of money government has to spend on development projects
Name 2 historical reasons for uneven development
- Colonisation
- Conflict
State what’s happening to colonised countries (development wise)
- Countries colonised = at lower level of development when they gain independence than they would be if they hadn’t been colonised
Explain how colonisation leads to uneven development with the aid of an example
- European counties colonised much of Africa in 19th century
- Controlled economies of their colonies:
- Removed raw materials & slaves
- Sold back expensive manufactured goods
- Bad for African development ∵ made parts of Africa depended on Europe
- = led to famine + malnutrition
Explain how conflict leads to uneven development
- War (especially civl wars) = slow/reduce levels of development even after war
- e.g. healthcare becomes much worse & infant mortality increases
- Money spent on arms and fighting instead of development
- People are killed & infrastructure/property is damaged
Give an example that supports the fact that ‘conflict leads to uneven development’
10 years after civil war in Uganda = levels of development barely returned to pre-war levels
Name 3 economic factors that can cause uneven development
- Poor Trade Links
- Lots of Debt
- An Economy Based on Primary Products
What is trade?
Exchange of good and services between countries
What is meant by world trade patterns?
Who trades with whom
Explain how poor trade links can lead to uneven development
Poor trade links (i.e. trades small amount with few countries) = won’t make enough money = less to spend on development
Explain how lots of debt can lead to uneven development
- Very poor countries borrow money from other countries + international organisations
- Money has to be paid back (sometimes with interest)
- Any money country makes is used to pay back debt instead of development
Explain how basing an economy on primary products can lead to uneven development
- Countries that export mainly primary products = less developed
- ∵ Don’t make much profit + prices fluctuate → price falls below cost of production
- People don’t make much money = less to spend on development
What can wealthy countries do that makes things worse for economies based on primary products
Can force down price of raw materials they buy from poorer countries
Name 3 things uneven development can affect
- Wealth
- Health
- International Migration
Explain how uneven development can affect wealth
People in more developed countries have higher income than those in less developed countries
Give an example of uneven development affecting wealth
GNI per head in UK is 40x higher than in Chad
Explain how uneven development can affect health
- Healthcare in more developed countries = better than in less developed countries
- People in HICs live much longer
- Infant mortality higher in less developed countries
Give an example that supports that ‘People in HICs live much longer’
UK’s life expectancy = 81 but Chad = 51
Give an example that supports that ‘Infant mortality higher in less developed countries’
85 per 1000 biters in Chad compared to 4 per 1000 births in UK
Explain how uneven development can affect international migration
If nearby countries have higher level of development = people will want to enter them ∵ they have opportunities that will improve their quality of life
Give an example of uneven development affecting international migration
Mexico (NEE) borders USA (HIC)
Every year over 130,000 Mexicans move to USA legally (& thousands more illegally) = for better paid jobs & higher quality of life
Name 8 strategies that can reduce the development gap
- Aid
- Debt Relief
- Fair Trade
- Investment
- Industrial Development
- Tourism
- Using Intermediate Technology
- Microfinance Loans
What is aid?
Help given by one country to another as money or resources
What can aid be used on?
Can be spent on development projects
Name 3 examples of development projects (i.e. where aid can spent and why)
- Providing farming knowledge and equipment to improve agriculture
- Constructing schools = improve literacy rates
- Building dams and wells to improve clean water supplies
What are 2 downsides of aid?
- Sometimes wasted by corrupt governments
- Or once money runs out = projects can stop working if not enough local knowledge + support
What is debt relief?
When some/all of country’s debt cancelled or interest rates are lowered
Explain how debt relief can reduce the development gap
LICs have more money to develop rather than pay back debt
Give an example of how debt relief helped reduce the development gap
- Zambia had $4 billion of debt cancelled in 2005
- In 2006: had enough money to start free healthcare scheme for millions of people living in rural areas
- = improved quality of their lives
What is fair trade?
Farmers getting fair price for goods produced in LICS
What do companies who sell products labelled as ‘fair trade’ have to do & buyers that purchase them?
- Pay producers fair price
- Buyers also pay extra on top of that to help develop area where goods came from (e.g. to build schools or health care)
What does fair trade allow the producers to do?
To provide for their families
What is the downside about fair trade?
Only tiny proportion of extra money reaches original producers → much goes to retailers’ profits
Explain how industrial development can help to reduce the development gap
- Countries with very low development: agriculture = large proportion of economy
- Developing industry = increases GNI + helps improve levels of development as productivity, levels of skill &
infrastructure are improved
What is FDI?
People/companies in one country buy property or infrastructure in another
Name 3 things FDI can lead to
- Increases in services
- Better access to finance, technology and expertise
- Improved infrastructure & industry
What is intermediate technology?
Includes tools, machines + systems = improve quality of life BUT simple to use, affordable to buy/build & cheap to maintain
Give an example of how intermediate technology helped reduce the development gap
e.g. solar powered LED lightbulbs used in parts of Nepal
- Other lighting options = polluting & dangerous
- e.g. kerosene lamps or wood fires
- Allows people to work in their homes or businesses + children to study after dark
- = skills, incomes & industrial output can increases = help reduce development gap
What is microfinance?
Microfinance = small loans given to people in LICs who many not be able to get loans from traditional banks
How can microfinance loans help to reduce the development gap?
Loans = people can start own businesses & become financially independent
What’s the issue with microfinance loans?
Not clear if it can reduce poverty on large scale
How can tourism help to reduce the development gap?
Provides increased income = can be used to increase level of development
What are trans-national corporations?
Companies located in, or produce/sell products in more than one country
Where are TNC factories normally located and why?
In pooper countries ∵ labour is cheeper + fewer environmental & labour regulations = more profit
Where are TNC offices & headquarters normally located and why?
In richer counties ∵ more people with administrative skills (∵ education is better)
Name 4 advantages of TNCs
- Employees in poorer countries = get more reliable income compared to jobs like farming
- Create jobs in counties they’re located in
- New technology and skills are brought to poorer countries
- Spend money to improve local infrastructure
Name 4 disadvantages of TNCs
- Employees in poorer countries = paid lower wages than those in richer countries
- Employees in poorer countries = work long hours in poor conditions
- Jobs created in poorer countries aren’t secure
- TNC could relocate jobs to another country
- Most TNCs come from richer counties ∴ profits go back there
- Aren’t reinvested in poorer countries the TNC operates in
