reducing economic gap strategies

• what are the strategies used to reduce dev gap

  • investment
  • industrial dev
  • tourism
  • aid
  • using intermediate technology
  • fairtrade
  • debt relief
  • microfinance loans
• how does investments close the dev gap

  • investments by TNCS (transnational corperation)
  • company invests/employs communities - ie shell employs aprox 4000 nigerians
  • helps LICs by employing local people - offers a steady income and a greater quality of life
  • can also lead to the positive multiplier effect and allow larger communities to develop
• why do TNCs like to invest in communities 


  • they can produce goods in one country rather than globally
• how does industrial dev help

  • large TNCs invest in LICs to increase profits
  • creates job opportunities for LIC - income, qol
  • LICs have acess to raw materials ie wood which they can trade - however HICs dont trade with them for a good price (rip them off) so this limits development
• why dont HICs trade with LICs fairly?

  • overproduction - if multiple countries sell the same thing, the value decreases - drops a lot during a year when crop production is good globally - negitavly impacts LIC communities as they aren't sellign enough for a good price
  • Import tax - EU places a tarriff on food imports from other countries - Means LICs cant sell raw mats for a fair price
• Tourism 


  • island nations attract tourists
  • goverments put advertising out in HICs
  • tourism can generate money by creating jobs
• aid 


  • international aid = gift of money to a developing country - dosent need to be repaid
  • targeted to help LICs reach development goals ie improve infrastructure, or help LICs become NEEs
• how does aid help economic development

  • large projects are funded
  • ie cameroon was given 800 mil fund to buid a poweer dam
  • workers are moved from farming jobs / high manual labour jobs to factory based jobs
• how does aid help social development

  • LICs are given money to help with education
• india and china are most likely to give aid to african countries
• Uk is most likely to give commonwealth countries aid due to historical relations
• how does intermediate technology close the dev gap

  • technology must be suitable and sustainable for community - cheap and easy to use
  • charities and NGOs give technology to LICs to help reach dev goals
  • technology can be used by the local community
  • ie water aid supplies communities with water pumps - lowers water related deaths - increased life expectancy
• how does fairtrade improve dev gap

  • fair price for fair produce
  • fair trade guarantees the produce / seller a fair price no matter what - allows a steady income
  • ensures a local communities have certainty and security in their lives
  • consumers in HICs have increasingly been purchasing fairtrade products to support LICs despite the higher price point
• benefits for LICs in fairtrade

  • uneducated young adults are offered a steady income to support their families
  • their siblings can then attend school - breaks the cycle of poverty
• how does debt relief close the dev gap

  • money loned by HICs may not be able to repay
  • so HICs and LICs can do conservation swaps where the LIC pledges to protect enviroment and HIC reduces debt repayment
• how does microfinance reduce dev gap

  • lend small amounts of money to communtiies which can help kickstart development
  • crop farmers yield is unpredictable - low income - cycle of pverty
  • must be payed back
  • often aimed at local woman to encourage them to get a business or give them equal opportunitues in the industry