The changing economic world Flashcards
What is the development gap?
How different two countries are when comparing their HDI
What is GNI?
Gross National Income
The total value of goods and services produced by a country in a year
What is GNI per head/capita?
The GNI divided by the population of the country
Why does measuring one statistic have downsides?
Because a country could be very rich but have awful life expectancy and standard of living
What is HDI?
Human development index
What does HDI account for
Income (GNI per head), life expectancy and literacy rates
What is a DTM and what does it show?
Demographic transition model
Shows how birth and death rates affect population growth
What is ‘natural decrease’
When the death rates are higher than the birth rates
What happens in stage 1 of a DTM?
Birth rate is high - no contraception
Death rate is high - disease and famine
What happens In stage 2 of a DTM?
The death rate drops as there’s better healthcare and agriculture provides food
Birth rate still high
Population grows
What happens in stage 3 of a DTM?
Birth rate follows death in its decrease as contraception is made
More women work instead of have kids
Death rate still falls as healthcare gets better
Population grows but slower
What happens in stage 4 of a DTM?
The birth rate and death rate are equal again - both being low
Contraception increases and more women work
Fewer children are needed on farms as the jobs are more manufacturing
Improved healthcare
Population is equal
What happens in stage 5 of a DTM?
The birth rate drops below the death rate as more people don’t want kids
Or can’t afford kids
Natural decrease starts
What types of environmental problems would affect a country’s development?
Poor climate - Too hot, dry or cold where not much will grow. Malnutrition
Fewer crops to sell so less money
Poor farming land - if it’s steep or infertile then can’t grow crops or graze animals
Few raw materials - no minerals to export, makes less money - some countries have them but can’t afford to mine them
Lots of natural disasters - rebuilding and losing money
What economic problems would affect a country’s development?
Poor trade links - not being near people
Lots of debt - poor countries borrow money and have to pay back with interest
Selling primary goods - primary goods are less profitable than manufactured goods- the cost also fluctuates depending on weather
Colonisation - the lack of independence leads to LICs
Conflict - money is spent on military and people die
What consequences does uneven development cause?
Wealth - more developed countries have higher GNI and thus affects people’s quality of life
Health - medicines are more in developed countries, so life expectancy in LICs is low. In LICs people have to give birth a lot in case their children die
Lack of medicine means people die from common diseases in LICs
Why does migration increase due to uneven development?
Many people move from LICs to HICs to avoid conflict or to improve their quality of life
The workers then contribute to HIC’s development, leaving their LIC in an even bigger development gap
What are strategies to reduce the development gap?
Investment - buy property or invest in businesses in LICs
Aid - money or resources are given to a country - often short term - projects such as schools can be left unfinished or wasted by corrupt governments
Fair trade - farmers get fair prices for their crops and a guarantee on price, although some consumers don’t like paying extra
Intermediate technology - giving cheap technology that will improve lives (solar heat stove)
Loans - gets them out of debt or gives money but Is often paid back with interest
Debt relief - gets rid of debt but doesn’t tell them how to manage money - they’re still poor and will go into debt again
Industrial development - production of factories
How did Kenya attract more tourists?
Visa fees for adults were cut by 50% in 2009 to make it cheaper to visit. They were also scrapped for children, encouraging families to visit
Landing fees at airports have droppped
What are the benefits of tourism for Kenya?
Their HDI has improved from 0.45 to 0.59
11% of their economy is tourism
New hotels and infrastructure creates jobs for Kenyans
Kenyans sell tourists things
What are the negatives of tourism for Kenya?
Only a small proportion of the money goes back to the locals, most go to the companies
Some communities have been forced off their land for tourist facilities
Tourist vehicles damage the environment and scare animals
Tourism is unreliable
What is Kenya an example of in the form of an exam question?
How the growth of tourism in an LIC helps to reduce the development gap
Where is Nigeria?
North west of Africa on the coast to the Atlantic Ocean
Northern hemisphere
What global importance has Nigeria got?
In 2014, it became the worlds biggest economy
Supplies 2.7% of the worlds oil
Contributes to global financial services
Predicted to be the highest growing economy in the space of 5 years
What national importance has Nigeria got?
Fastest growing economy of Africa
70% of population were in agriculture
Largest population in Africa
Problems with corruption and lack of infrastructure
Largest number of cattle in Africa (19 million)
What is the history of Nigeria? Why is it underdeveloped?
Europe split Africa in 1883 and took their minerals and people
African nations became independent in 1960s - different people wanted power
Civil war took place for land
2011 - elections took place and trade with other countries was established
What is the climate like in Nigeria?
The north is dry (Savannah - bordering the Sahel desert)
The south is wet - near the equator
Crops are grown in the south although cotton can be grown in the north
What regional differences are there in Nigeria?
Urban areas have better facilities and medicine
60% of kids in urban areas get an education whilst 36% in rural areas get an education
North has more money as they can trade easier
What industries are 83% of UK’s workforce?
Services - retail and entertainment (employs 4 million people)
Info tech - over 670,000 people work in IT
Finance - London has lots of financial including HSBC headquarters
Research - UK’s skilled graduates work in research and development (in 2016, over £33 billion was spent in research
Where are science or business parks?
On the outskirts of cities near to housing and good transport links
Near universities so that they can work with university researchers
Why have research parks increased?
There is a demand for high tech products - science parks can help develop new tech
Britain has many highly respected universities to link with
Clusters of related businesses in one area can boost each other
What are the three main causes of economic change?
De-industrialisation
Globalisation
Government policies
How does de-industrialisation cause economic change?
Machines take over jobs that people used to do in manufacturing industries
As other countries industrialise, they produce goods cheaply for the UK - this has caused some UK manufacturing industries to close
How does Globalisation cause economic change?
Manufacturing has moved over seas where labour costs are lower
Some IT companies have moved to Britain (apple employs 6500 people in Britain)
Trade with other companies is very important (UK’s GDP from foreign trade went from 38% in the 1900s to 62% in 2017)
How do government policies cause economic change?
Decisions on investment and support for businesses
Key manufacturing companies owned by the government become private leading to job losses but increased efficiency
They remove taxes and restrictions on companies to encourage entrepreneurs
What effects does industry have on the physical environment?
Factories release greenhouse gases and running them uses lots of energy and water
Extracting minerals destroys habitats and releases toxic chemicals into the water
Modern industrial developments are more sustainable than older ones
How is the UK improving its transport systems?
Capacity on motorway is being upgraded to ‘smart motorways’ with extra lanes
London’s rail capacity for trains is being increased by 10% (HS2 would increase capacity and be faster)
A third runway at Heathrow airport is being built however that would increase noise and air pollution
How is the UK economy affecting rural areas?
The population of Lakeland decreased by 0.8% due to a decline in jobs from 2005
This means more shops and facilities in Lakeland have closed
However, Somerset increased by 7.8% from 2005 because its has easy access to Bristol
House prices rose but employment and wages are now above the national average
Why is there a divide in the North and South of the UK economically?
The north has suffered from lack of manufacturing but the growth of post-industrial services (including trade) has been beneficial to the south
What evidence is there for a north and south divide in the UK?
Wages are lower in the north
Health is generally lower in the north with a life expectancy of 72 years whereas south was 82
GCSE results are better in the south
What is the UK doing to reduce the north-south divide?
Using money on schemes they feel will best benefit the local community (transport or regeneration projects)
Creating enterprise zones where companies get reduced taxes, improved infrastructure and financial benefits
Creating transport links between north cities and spending £70 million on improving schools
Facts about Nigeria’s trade?
Main exports: petroleum, gas, rubber, cocoa
Main imports: petroleum, cars, phones, rice and wheat
45% of products go to EU
1/3 of imports is China and another 1/3 is EU
(EU Is the closest continent)
Facts about quality of life in Nigeria
Nigeria still needs aid as 60% still live in poverty (aid is not spread evenly across Nigeria)
Most people live on one dollar a day
1/3 people don’t have clean water
Facts about Malaria in Nigeria and the aid that helped close the development gap
Nigeria has one of the highest death rates from malaria in the world
Every 30s a child dies
50% have an attack malaria
60 million mosquito nets were given out by the world bank - healthier people can work and if they think their children are protected, they’ll have less kids
What is the problem in Nigeria with using aid effectively?
Corruption from the government
Government may use it for military
Donors may have influence over where it goes
Money may be used to promote the commercial use of the donor
How did Nigeria’s economic structure change from an LIC to an NEE?
LIC:
2/3 worked in farming
1/8 worked in industry
NEE:
1/3 worked in farming
1/3 worked in industry
How does manufacturing boost Nigeria’s economy?
Manufacturing makes 10% of Nigeria’s GDP
Cheap labour for factories
Regular paid work gives people secure income and lets them buy more
Oil creates byproducts that can be used in other industries
Taxes increase as people get more money so government gets more money
Big industrial sectors bring in foreign investors and can establish links with the rest of the world
What is a TNC?
Trans national corporation
A company that operates in several companies around the world. Has headquarters in one country (HIC) but has production plants in others (LIC)
What is a host country?
Where the TNC operates on a daily basis
What is a source country?
Where a TNC has its headquarters
Why do TNCs operate in LICs?
Cheap labour
Lower taxes
Less laws (pollution, wages, human rights)
Access to a wider market
What is the advantages and disadvantages of shell going to Nigeria?
Advantage: 26,000 people employed in total
90% of employed are local
Shell pays taxes
Provides charity (schools, health)
Disadvantages: Difficult working environments
Government don’t spend taxes on local people
Oil theft damages environment
Blaring - burning unwanted chases
Oil spills
