*The Changing Economic World (Paper 2) Flashcards
This is a compulsory topic. It cover economic development, closing the development gap, rapid economic development in LICs/NEEs and the impacts and major changes in the UK economy.
What does NEE stand for?
Newly Emerging Economy
What is an Newly Emerging Economy?
A country that is going through a period of rapid economic growth
Give an example of the NEE you have studied
Nigeria
Where is Nigeria located?
Nigeria is a country located in Western Africa
Why is Nigeria an important country globally?
- It is the world’s 21st largest economy
- It supplies 2.7% of the world’s oil (12th larger producer)
- It has a diverse economy offering a range of jobs in the tertiary and quaternary sector
- It is a big player in UN global peace keeping missions
Why is Nigeria an important city nationally?
- It has one of the fastest growing economies in Africa
- High GDP
- High farm output
- Location of TNC, Shell
Describe the political context of Nigeria
- Gained independence from the UK in 1960
- Has a history of civil war
- Many companies now investing in Nigeria
- It has links with OPEC (Organisation of Petroleum Exporting Countries), UN and the African Union.
Describe the social context of Nigeria
- Diverse religious beliefs
- Increasing levels of conflict between different groups
- Rise of extremist groups e.g. Boko Harem
Describe the cultural context of Nigeria
- Diverse and varied culture
- Popular Nigerian cinema: Nollywood
- Range of music and sports events
Describe the environment of Nigeria
- Northern Nigeria is semi-desert
- Southern Nigeria: high temperatures and high rainfall
What does Nigeria export?
Crude oil, refined petroleum, natural gas, rubber, cocoa and cotton.
What are Nigeria’s main imports?
Cars, refined petroleum, rice, wheat and telephones (due to its rising wealth)
How has Nigeria’s industrial structure changed over time?
- Decrease in agriculture
- Increase in industry
- Increase in services
- Overall more balanced economy
Why has Nigeria’s industrial sector changed?
- Less agriculture due to increase in machinery
- Increase in industry due to industrialisation
- Growth of communications and retail
What products does Nigeria manufacture?
Processed foods, leather items, textiles, soaps and detergents
What impact is the growing manufacturing sector having on Nigeria’s economy?
- More formal work = more population paying tax
- More regular paid work = more employed
- Lots of manufacturing industries are connected so they create work for each other - TNCs are attracted to Nigeria
What does TNC stand for?
Transnational Corporation
Describe the characteristics of a TNC
- Headquarters are located in one country
- Production plantations in several others
What might a TNC choose to locate in a country?
- Access to cheaper labour
- Access to new markets (to sell their product)
- Less environmental laws to adhere to
- Tax breaks
Name some advantages of TNCs for the host country
- New skills learned by people
- Creates more jobs
- TNCs often invest in infrastructure of the country
- Can reduce poverty
Name some disadvantages of TNCs for the host country
- Poor working conditions for workers
- Low pay
- Higher skilled/ higher paid jobs often given to foreign workers
- Profits drains from the area
- The financial incentives offered to attract TNCs can often be better spent investing in healthcare etc.
Name the case study of a TNC that invested in Nigeria
Shell
What kind of company is Shell?
An oil company
What are the advantages of Shell to Nigeria?
- Generating a lot of wealth for Nigeria
- Directly employing 65,000 people and 250,000 indirectly
- 91% of all of Shell’s work contracts are given to Nigerian companies rather than foreign companies
What are the disadvantages of Shell to Nigeria?
Extracting oil creates problems for the natural environment:
- oil spills cause water pollution and are difficult to clean up
- ecosystems are killed off if oil enters water systems; affecting fishing industries
- oil flares give off harmful fumes into the air
- theft of oil is becoming a big problem
Name the two different types of aid
Emergency aid and development aid
What is emergency aid?
Aid that is given directly after a natural disaster e.g. an earthquake. Aid may take the form of water, food, medical supplies
What is development aid?
Aid that happens over a longer term. It may be provided by governments or charities and may include providing education or access to safe water wells in order to improve quality of life
What impact can aid have on the receiving country? (+ and -)
+ Aid can immediately improve a situation e.g. providing medical aid after a disaster
+ Aid can provide people with the means of helping themselves i.e. tools / knowledge
+ Aid can be the trigger to start development i.e. financial support to start a businesses
- Receiving countries can become reliant upon donor countries
- Some forms of aid aren’t suitable i.e. some technologies
Why is Nigeria in need of aid?
- It has large amounts of people living in poverty (60+% of the population live on less than US$1 per day.
- Infant mortality rate is high
- Life expectancy is low.
What aid does Nigeria receive?
Some money from HICs - UK and USA World Bank funded business start ups Charity work in communities
What impact has aid had in Nigeria?
+ Most successful aid has been in small communities
+ World Bank donations helped start up new businesses which reduced over reliance on oil industry
+ Education projects from the USA aim to educate population about HIV/AIDS prevention
+ ‘Nets for Life’ provide mosquito nets to households
Why is aid sometimes difficult to implement?
- Sometimes governments are corrupt which means aid isn’t spent on what it is meant to be spent on
- Aid may come with conditions
- Aid is sometimes used to promote interests of the donor country