6: Development & resource issues

• Reasons why countries are unevenly developed:

  • conflict
  • political instability
  • climate
  • natural hazards
• Trade: the buying and selling of goods and services between countries.

  Traditionally HIC nations export valuable manufactured goods and they import cheaper primary goods. LIC nations tend to import valuable high tech items and export low value raw materials, which leads to poverty and debt
• Supply & Demand:

  greater the supply, lower the demand - lower the price

  greater the demand, lower the supply - higher price
• Causes of uneven development 1/3: Historical

  • Colonialism from 1650-1900 - over 10m people were transported from Africa to North America to work as slaves
  • By the end of C19th, countries such as the UK, Germany and France had powerful empires and colonies
  • Since 1950, European colonies gained independence. This potential instability held back development
• Causes of uneven development 2/3: Economic

  • Trade - North America and Europe dominated world trade. Most of the world's trades is between rich countries
• Causes of uneven development 3/3: Physical

  • Landlocked countries, extreme weathers and lack of safe waters can make country development difficult.
  • Tropical Africa and Asia have more climate related diseases. Diseases affect the ability of the population to stay healthy enough to work.
• Tariffs: tax on importing goods and services
• Quotas: limits on the amount of goods imported, usually work in the favours of developed countries
• Protectionism: to protect a nation’s economy

  • LICs develop if they are able to reduce trade
  • Government imposed tariffs and quotas so LICs pay more to export.
  • HICs provide farmers with subsides so the farmer can sell to LICs for cheaper
• Subsides: someone that has paid money towards
• Free trade: trade without restriction. Benefit for LICs because they can get more involved. Promoted more even development
• Trade Blocs: a group of countries that favour each other in terms of trade.

  • +increases global peace
  • +improves global trade
  • -loss of financial controls
  • -some economic sectors are damaged because of shared resources
• Globalisation: the process by the world’s economies, societies and cultures have become interpreted through networks of communication, transportation and trade
• Why did globalisation happen?

  • improved technology
  • improved communications
  • improved transportation
  • removal of trade barriers
• MNC: a company that operates in at least 2 countries. Has a HQ in one nation and mains operations in another
• Why should you operate in more than one country?

  • escape tariffs
  • find the lowest cost location for production
  • can sell products to foreign markets easier
  • weaker laws and environmental standards
• What do all TNCs have in common?

  • maximise economies of scale by organising production to reduce costs
  • source raw materials or components at lowest cost
  • control the supply
  • global branding
• Pros & Cons of TNCs

  • +technology transfer - TNCs transfer new tech from parent company to local branches - accelerate economic development
  • +political stability - working and investing each other
  • -environmental degradation - TNCs can export negative activities to poorer nations with lower environmental standards
  • -growing inequality - TNCs cluster in selected economies to create a regional divide
• Tourism: any activity where a person voluntarily visits a place far from home and stay there for at least one night
• Why has there been an increase in tourism?

  • choice of location - more variety and more people want to see places
  • Speed & availability on flights
• Enclave Tourism: where tourist activities are planned and congregated in a small geographic area. Hotels are often all inclusive which makes tourists stay in the hotel and not spend money in the local area. This is safer in developing regions, but causes a leakage where the money goes back to MNCs instead of the local people
• Informal Sector - jobs by self-employed people which isn’t declared or regulated by authorities
• Tourism & Employment Structures

  Tourism leads to greater wealth