economies

• emerging economies- an economy which is progressing towards becoming more advanced by rapid industralisation

  
  

  eg. Brazil, Russia, India, China, South Africa
• examples of a developing economy include, zimbabwe, ethiopia and south sudan
• characteristics of a developing economy

  • slow economic growth
  • low productivity
  • low standards of living
  • poor infastructure
  • reliant on agriculture
  • low education opportunities
  • high unemployment
• economic aid


  given in the hope that the developing country develops economically, so it is able to provide new markets for the goods produced by the first world and contribute more to the worlds economy
• free trade agreement is the removal of trade barriers to make their products relatively less expensive, so increase demand

  usually negotiated and binding contract between countries or regions

  allows for the movement of goods and services without restriction

  eg NAFTA
• soft loans are loans which are lower that the normal rate of interest, which allows the purchase of capital equipment to help a developing economy
• medical aid reduced illness and improves productive potential
• tied aid - provides cash aslong as it is spent on the donor countrys exports

  bilateral aid - provides cash directly from one govt to another

  multilateral aid - provides cash from a group of countries to one or more countries
• capital equipment, eg machinery enables productivity and increases output
• food aid allows workers to be more nourished and therefore productive
• effects of developing economies on uk economy

  -govt spending from uk is used as aid

  -potential new markets for uk firms, esp if uk govt gives tied aids

  -source of cheap imports for uk consumers to buy

  -hazard to environment as there are fewer laws
• characteristics of a emerging economy

  • rapidly increasing economic growth 5-10%
  • rapid improvements in productivity
  • improving standard of living
  • improving infastructure
  • diversifying exports
  • investment in education and training
• effects of emerging economies on the uk

  -access to cheaper imports, reducing production costs for uk firms

  -growing new markets, from which demand can be generated, therefore profit

  --> for example whisky as a luxury product may experience high sales in China

  -competetively priced goods may be exported from them, generating increased competition for uk firms, which will reduce profits and may drive uk firms out of business

  -some are less regulated, so risky and unstable to trade with