To what extent can social and economic inequalities be reduced? Flashcards
Features of social and economic inequalities
- Social and economic inequalities are found in all countries, though they tend to be most extreme in the poorest LEDCs.
- Social and economic inequalities often relate to particular groups in society, for instance, race, ethnicity, gender and age are closely associated with inequality and social exclusion.
- The United Nations, through its development programme, is committed to reducing poverty and inequality
o However, these goals are best achieved though national government programmes. Most governments driven by ideals of social justice and political cohesion, aim to reduce the extremes of poverty and inequality - Inequalities take a number of different social and economic forms
o Some groups are disadvantaged because they have unequal access to health care, education services and the housing market
o Others suffer high levels of exposure to crime, anti-social behaviour and lower life expectancies - Inequality is most obvious in economic terms, where it is often associated with poverty, low incomes, low skills and high levels of unemployment
- Many outcomes of inequality are closely interrelated
o Poor educational attainment often results in low incomes and unemployment, which in turn are more likely to induce physiological and mental ill-health - In other words, the poorest socio-economic groups often suffer multiple deprivation
- Inequality also has a spatial dimension, with poverty and social exclusion often having their own distinctive geography
o Some places with higher incomes, lower unemployment and faster economic growth are more prosperous than others
o Where people live often influences the quality of health care, education and other services they receive, and even their life chances
o The geography of inequality exists at all scales, from global to local, and it is especially evident between rural and urban populations
Direct investment targets:
- Setting up factories to take advantage of lower costs, such as cheaper labour, energy and land
- Opening plants that process basic raw materials before they are shipped
- Improving transport infrastructure, particularly ports, airports and roads
- Building hotels
Why does direct investment not work?
- The root of the problem is that direct investment is very much in the hands of transnational companies (TNCs). As a consequence, there is a substantial leakage of profits from the countries in which the investments are made
- Money that might be ploughed back in support of more economic development is ‘lost’ either to support a new investment in some other country or to be paid out as dividends to TNC shareholders
The activities of the WTO are guided by a number of principles:
Targets:
- To trade without discrimination
- To treat foreign and local goods equally
- To promote a freer trade by lowering trade barriers such as tariffs and taxes
- To support transparency and fairer competition
- To encourage development
Where does responsibility for ensuring fair trade rest with?
WTO (World Trade Organisation)
When was WTO set up?
1995
What is fair trade?
- This is a non-governmental organisation which seeks to obtain a fair price for a wide variety of goods exported from developing to developed countries, including: handicrafts, coffee, cocoa, sugar, tea, bananas, honey, wine and fresh fruit.
What is the aim of fair trade?
The aim is to work with marginally small-scale producers and help make them more economically secure
In 2006 Fair-trade certified sales amounted to how much?
US$2.3 billion worldwide
In October 2006, how many disadvantaged workers benefitted directly from fairtrade?
over 1.5 million
What is aid and what international organisations give aid?
For decades, many of the world’s least developed countries have been receiving aid from both individual MEDCs (bilateral aid) and from international organisations (multilateral aid), such as the various agencies of the United Nations, the World Banks and the International Monetary Fund.
What are the issues with aid?
- Too much aid has been in the forms of loans rather than technical assistance
o Loans have to be repaid and loans attract interest charges – as a result, many countries have been plunged into ever deeper debt - Much bilateral aid has come with strings attached, such as agreeing to sell raw materials at below-market prices or buy military equipment in return for aid
- Aid has been used as a backdoor to obtaining the resources of poorer countries
o For example, China is using the resources in Africa to support its large and increasingly affluent population - Very little aid has reached the most needy
o Much of it has been skimmed off and found its way into the bank accounts of corrupt governments and their officials
What is taxation and how can it be used by governments to tackle social and economic inequalities?
Income tax is often used by governments to redistribute wealth from more prosperous to less prosperous groups, and so create a fairer society – Has done little to narrow the basic income gap - However, it can raise revenue to finance subsidies and concessions that benefit the poor
What are subsidies and how can they be used by governments to tackle social and economic inequalities?
Governments also try to reduce inequality by giving subsidies to poorer groups. Children in poor families may get free school meals, clothing allowances and help with university fees. Pensioners may get subsidies for fuel and transport. Other subsidies include free childcare for single parents. Low wage earners, unemployed workers, and those suffering with long-term disability are entitles to benefits. – Does not eliminate poverty
What is planning and how can it be used by governments to tackle social and economic inequalities?
Governments, charities and housing agencies often give priority to upgrading housing and services in the poorest areas. At a local scale this happens in informal slum settlements in cities in LEDCs as well as in rundown inner city locations in MEDCs. Planning is often organised geographically and is targeted in the most deprived areas, which vary in scale from neighbourhoods to entire regions.
