Increasing development

• Rostow’s Model shows 5 stages of economic development

  • it predicts how a country’s level of economic development changes over time
  • At the same time, people’s standard of living improves
  • Stage 1 is the lowest and 5 is the highest
• 5 stages of rostows model are

  1. traditional society
  2. preconditions for take off
  3. take off
  4. drive to maturity
  5. mass consumption
• The Millennium Development Goals (MDGs) aimed to help LIDCs developed

  • they were set in 2000 by the UN
  • supposed to achieve by 2015
• the 8 MDGs

  1. halve number of people in extreme poverty
  2. all children have primary education
  3. increase number of girls and women in education and paid employment
  4. reduce death rates in children under 5 years old by two-thirds
  5. reduce death rates amongst women caused by pregnancy by three-quarters
  6. stop spread of major diseases
  7. protect the environment
  8. countries around the world work together to help LIDCs develop
• There are 5 types of aid:

  • top down
  • Bottom up
  • Short-term
  • Long-term
  • Debt relief
• top down aid

  when an organisation or government receives the aid and decides how it should be spent

  advantages:

  • often for large projects (eg dams)
  • solve large scale problems
  • impact many people
  • improve the country’s economy

  disadvantages:

  • have to pay back money
  • corrupt governments
• bottom up aid

  money is given directly to local people

  advantages:

  • locals have say in how the money is used, so they can get what they need
  • employ locals —> earn money + new skills

  disadvantages:

  • small scale benefits less people
  • different organisations may not work together, so projects may be inefficient
• short term aid

  aid sent to help countries to cope with emergencies (eg natural disasters)

  advantages:

  • immediate relief
  • money allocated for development doesnt have to be used for the emergency instead

  disadvantages:

  • doesn’t help with long term recovery
  • food aid limits price that farmers can charge for their crops, so their income is reduced
• long term aid

  aid given over a long period to help a country develop.

  advantages:

  • improve quality of life for many long term
  • can build trade links between donor and recipient countries

  disadvantages:

  • makes them dependent
• debt relief

  a country doesn’t have to pay back part or all of the money that it has borrowed

  advantages:

  • frees up money to be spent on development
  • donor countries can specify how the cancelled debt should be spent

  disadvantages:

  • donor countries may be reluctant to cancel debt for countries with corrupt governments
• trade helps a country develop by

  1. creating jobs and bringing money into the country —> improves standard of living
  2. increase amount of money a country has to spend on services and projects
• problems with trade:

  1. conflict can make supply of goods unreliable
  2. in countries where there are many diseases, money is spent on treating people and not on developing trade
  3. wages and working conditions may be poor
  4. LIDCs often export primary products (wood), which dont create much profit — they may also fail due to climate (crops)
  5. countries are often depending on trading one products, and if demand falls, the country’s income can decrease sharply
• Trans-national companies (TNCs) are companies that are located in or produce and sell products in more than one country
• TNC factories are often located in poorer countries

  • cheap labour
  • less environmental and labour regulations
  • more profit
• TNC offices and headquarters are usually in richer countries because there are more people with administrative skills (because the education is better)
• TNC advantages in LIDCs

  1. create jobs
  2. employees get a more reliable income compared to jobs like farming
  3. they spend money to improve the local infrastructure (roads)
  4. new technology and skills and brought to poorer countries
• TNC disadvantages in LIDCs

  1. employees in poorer countries paid less than in richer countries
  2. work long hours in poor conditions
  3. profits go back to rich countries, not reinvested into the poorer countries that the TNCs operate in
  4. jobs aren’t secure and the TNC could relocate