Section B = changing economic world

• The Clark Sector Model allows to understand the changing economy of a country, in terms of the percentage of employment in different workforces.
• Primary sector


  extraction of natural resources and raw materials like farming, fishing or mining
• Secondary sector


  utilising the raw materials from primary jobs by manufacturing things like a builder
• Tertiary sector


  services for people or other sectors such as hospitals or education, but does not produce anything physically
• Quaternary sector


  research and development sector which is concerned with information and communication
• Pre-industrial phase 


  the primary sector is the most dominate in the economy and may employ around 70% of the working class population. Agriculture was the most important activity.
• Industrial phase


  the primary sector rapidly decrease but the secondary sector gradually increases and leads the economy, and employs around 50% of the population as manufacturing goods and building buildings are important. the tertiary sector is also becoming increasingly important.
• post industrial phase

  as tertiary sectors become increasingly important and employ over 50% of the population, both primary and secondary sectors slowly decline, and the emergence of the quaternary sector appears.
• Pre-industrial countries

  LICs like Malawi
• Industrial countries

  NEEs and MICs like the BRICs (Brazil, Russia, India, China) and MINTs (Malaysia, Indonesia, Nigeria, Tunisia)
• Post industrial countries

  HICs like the United Kingdom, North America and European countries
• GDP also counts the profits of British companies outside the borders of the UK.
• Foreign direct investment (FDI)


  an investment made by the government or large companies in another country
• Economic data can be sometimes misleading:

  • all incomes and revenues are recorded in the formal economy then calculated into the GNI, however countries with a large informal economy like Rio, Brazil have lots of unrecorded work
  • averages can hid inequality as it does not show the income distribution of a country
  • sometimes the data cannot be adjusted to the country's cost of living.
• The Brandt line is a line that separates the the globe from the developed and not developed. Where the global north (1st world countries) is more developed and richer than the global south (3rd world countries).

  • it is not reflective of development today (outdated)
  • geographically incorrect as Australia is technically on the south of the globe
  • too simplistic
  • it only focuses on the economic aspects
• GNI = gross national income

  • gross GNI divided by the population to get a per capita (per person)
  • converted into $US to allow comparison, as it is a stable currency form
  • GNI per capita to be adjusted to allow for differences in cost of goods and services (purchasing power parity) -> comparative of cost of living
• PPP = purchasing power parity 


  it is the idea that everything should cost the same in different countries when you convert them to the same currency. it allows economists to compare the cost of living between countries or whether the country is strong or weak
• HDI = human development index


  HDI is a composite index of GNI (economic), life expectancy (social) and education (social) to measure the areas of human development and the standard of living.

  It is measured from 0-1, where 1 is the the highest of the standard of living.

  High HDI = Switzerland, Norway, Iceland

  Low HDI = Niger, South Sudan, Somalia
• death rates are higher in LICs:

  • lots of water borne disease like guinea worm and river blindness
  • poor sanitation and lack of basic necessities
  • political instability and conflict
  • extreme weather leading to crop failure
  • limited access to clean water, food and healthcare
  • poor maternity care (high infant mortality rate)
• high birth rates in LICs:

  • some families tend to have lots of children as they can work and are seen as a source of income (child labour)
  • there is no social security, no pensions, no access to free healthcare
  • no access to contraception
• low death rates in HICs:

  • good access to free healthcare
  • clean sanitation and water
  • politically stable and no war
  • access to healthy food and nutrition
• low birth rates in HICs:

  • access to contraception and abortion
  • cost of living is increasing, and raising children is expensive
  • female emancipation (women have the right to choose and are becoming increasingly independent -> like women putting their career before their marriage)
• DTM

  demographic transition model
• Disadvantages of the demographic transition model:

  • the DTM assumes all countries move through the stages at the same pace. However all countries progress and develop at different speeds (some move through stages faster, while others take longer)
  • sometimes pandemics or conflicts can send a country back through the stages, but the DTM suggests it is constantly going forwards
• TNC = trans national cooperation


  large international companies which operates in more than one country - usually with their headquarters situated in high income countries. but, its factories are mostly located in newly emerging economies or low income countries.
• free-trade = where there are no taxes or tariffs on imported goods
• Humanitarian aid like the Red Cross provides food, sanitation and water at times of a crisis like a natural disaster. It gives short term aid to help reduce negative impacts (it is free from non-governmental organisations, where its often volunteer work)
• Financial aid is where richer countries like Lloyds bank provides loans to poorer countries. However, they are usually then tied to their richer counterparts and often support them politically.
• Developmental aid are long term initiatives that can involve financial or education inputs to poorer countries which are often "free" (or cheap for them to pay), this can involve providing poorer countries intermediate technology.
• Fairtrade = products which are more expensive for consumers, but it ensures the workers have a more reasonable salary and better working conditions this helps increase the gdp by minimal amounts.
• LICs are over reliant on non processed raw materials like cash crops (rice, wheat, soya beans) and commodities (tin, iron) and fossil fuels as their main source of income. However because the materials are unprocessed this means they are sold at huge quantities by at very cheap costs to transnational cooperation (TNCs). This also leads to large scale agri-farming which can lead to environmental damage.
• Protectionism is where tariffs are put on imported LIC goods (because they are sold at extremely low prices) to protect jobs and economy within their own country.
• However transnational cooperation (TNCs) and foreign direct investment (FDI) can generate the multiplyer effect and jobs within a country, boosting the economy.
• Intermediate technology (example of a good form of aid)

  giving technology which is appropriate to match the skills of the user to help improve or make their lives easier
• Water aid (UK charity) helps fund sustainable projects in LICs like water pumps or solar panels which are relatively cheap and simple to use. This helps locals to learn skills and look after the intermediate technology with basic training, however there is a small charge of money which encourages them to look after it
• The debt crisis was when rich western banks and companies were very rich in cash from oil (like shell and BP). These companies have lent lots of money to poor countries with very low interest rates. As the oil industry began to suffer and it was more difficult to earn profit, the companies have increased the interest rates loaned to the poor countries by significant amounts. LICs were unable to pay large interests and their loan, so every year they pay interest from their national budget which does not decrease. This results in a debt trap, and poorer countries remain poor as they do not have enough money to develop their country
• debt relief = a program to make debts more manageable

  • reducing interest rates
  • paying less interest a year but it is extended over a longer period of time
  • cancelling their debt
• Microfinance = lending small amounts of financial aid which can help improve the quality of an individual's life
• Globalisation is the increasing interdependence between countries through trade and culture, the world is becoming metaphorically smaller where information is spread quicker and easier.
• Overall economic growth in the UK has increased by 1% each year due to globalisation and more freer trade with the rest of the world. However, the unequal distribution of benefits and wealth widens the inequality gap. (Economic claw = where money is generated in one area, like the south east of England)