Changing economic world

• Development


  The progress in economic growth, use of technology, and improving welfare that a country has made - the country gets better for the people living there and their quality of life improves
• Gross National Income (GNI)

  The total value of goods and services provided by a country in a year, including overseas income - usually given in USD

  MEASURES WEALTH

  GETS HIGHER W/ DEVELOPMENT
• GNI per head


  GNI divided by the population of a country - given in USD, sometimes called GNI per capita

  MEASURES WEALTH

  GETS HIGHER W/ DEVELOPMENT
• Gross Domestic Product (GDP)


  Total value of goods and services a country produces in a year - given in USD. (Doesn't include overseas income)

  MEASURES WEALTH

  GETS HIGHER W/ DEVELOPMENT
• Birth Rate


  The number of live babies born per thousand of the population per year

  MEASURES WOMEN'S RIGHTS/HEALTH

  GETS HlowerWITH DEVELOPMENT
• Death Rate


  The number of deaths per thousand of the population per year

  MEASURES HEALTH

  GETS LOWER WITH DEVELOPMENT
• Infant Mortality Rate


  The number of babies who die under 1 year old, per thousand babies born

  MEASURES HEALTH

  GETS LOWER WITH DEVELOPMENT
• People per Doctor


  The average number of people per doctor

  MEASURES HEALTH

  GETS LOWER WITH DEVELOPMENT
• Literacy Rate


  The percentage of a country's adults who can read and write.

  MEASURES EDUCATION

  GETS Higher WITH DEVELOPMENT
• Access to safe water

  The percentage of people who can get clean drinking water

  MEASURES HEALTH

  GETS HIGHER WITH DEVELOPMENT
• Life expectancy


  The average age a person can expect to live to

  MEASURES HEALTH

  GETS HIGHER WITH DEVELOPMENT
• Human Development Index (HDI)


  A number calculated using life expectancy, education level, and income per head - rates each country between 1 and 0

  MEASURES LOTS OF THINGS

  GETS HIGHER WITH DEVELOPMENT
• HIC (high income country)


  The wealthiest countries in the world, where the GNI per head is high and most citizens have a high quality of life

  Eg. UK, USA, Canada, France
• LIC (low income country)


  The poorest countries in the world, where the GNI per head is very low and most citizens have a low quality of life

  Eg. Afghanistan, Somalia, Uganda, Nepal
• NEE (newly emerging economy)


  Countries which are rapidly getting richer as their economy is moving from being based on primary industry (agriculture) to secondary industry (manufacturing). Quality of life for many citizens is improving

  Eg. China, Brazil, Russia, India
• Problems with GNI per head

  -Hides variation between regions in a country and between classes

  i.e. Russia may seem to be very developed, however there are a small amount of wealthy people and loads of very poor people
• Demographic Transition Model (DTM)

  A model of demographic change based on Europe's population in the eighteenth through twentieth centuries. It argues that, as a country modernizes, its fertility and mortality rates drop, but not at the same time. Because death rates drop before birth rates, population increase will occur.

  
• Poor Climate


  Physical factor that affects development

  -Reduces food production

  -People cannot make as much money as they have fewer crops to sell; reduces money available to spend on goods and services

  -Government gets less money from taxes to spend on development
• Poor Farming Land


  Physical factor that affects development

  -Same effects as a poor climate
• Few Raw Materials


  Physical factor that affects development

  -Countries cannot make products, so have less money as they have nothing to sell

  -Leads to less money being available to spend on development

  -Some countries do have raw materials, but are still underdeveloped as they do not have the infrastructure needed to exploit them
• Lots of Natural Hazards


  Physical factor that affects development

  -Countries that are regularly effected by natural disasters have to spend money on rebuilding themselves after disasters occur

  -This money cannot then be spent on development projects

  -Disasters also cause death and injury, reducing quality of life
• Colonisation


  Historical factor that affects development

  -Countries which were colonised often have a lower level of development when they gain independence

  -For example, European countries colonised much of Africa in the 19th century and removed raw materials, controlled the economy, and sold back goods at very high prices. This forced the African countries to become dependant on Europe, and led to famine and malnutrition
• Conflict


  Historical factor that affects development

  -War and civil war can slow or reduce development even after the war is over - e.g. healthcare gets worse and infant mortality increases

  -Money is spent on arms and fighting instead of development, people are killed, and damage is done to infrastructure and property

  -i.e in Uganda, levels of development 10 years after a civil war had barely returned to pre-war levels
• Poor Trade Links


  Economic factor that affects development

  -Trade patterns seriously influence a countries economy and therefore their level of development

  -If a country has bad trade links, it won't make a lot of money and therefore won't have money to spend on development
• Lots of Debt


  Economic factor that affects development

  -Very poor countries borrow money from other countries and international organisations in time of crisis

  -This has to be paid back (sometimes with interest)

  -Money that the country makes is used to pay back the debt, so isn't used to develop the country
• Economy based on primary products

  Economic factor that affects development

  -Selling primary products does not make as much profit as the cost fluctuates

  -The country does not make enough money to spend on development

  -Countries which export manufactured goods tend to be more developed
• Uneven Development Consequences


  WEALTH

  People in more developed countries have a higher income than those in less developed countries

  GNI per head in the UK is 40 times higher than in Chad

  
  

  HEALTH

  Healthcare in more developed countries better, people live much longer, and infant mortality is lower

  
  

  INTERNATIONAL MIGRATION

  People often try to move from LICs to HICs to try and improve their quality of life
• Aid (Reducing the Development Gap)

  Given by one country to another as money or resources

  Spent on development products - e.g. building schools, providing farming knowledge, improving infrastructure

  Can be misused and wasted by corrupt governments, and when the money runs out schemes can collapse due to no support or knowledge
• Debt Relief (Reducing the Development Gap)

  When some or all of a countries debt is cancelled or interest rates are lowered - the country then has more money for development as they do not have to pay money back

  Eg. `Zambia had $4 billion of debt cancelled in 2005, and the country could start a free healthcare scheme in 2006
• Fair Trade (Reducing the Development Gap)


  Allows farmers to get fair prices for goods produced in LICs, allowing them to provide for their families

  (Companies who want to sell Fair Trade products have to pay producers a fair price)

  Buyers also pay extra to help develop the area where the goods come from

  However, only a tiny proportion of the extra money actually reaches the original producers
• Investment (Reducing the Development Gap)

  FDI (Foreign-direct investment) is when companies or countries in one country buy property or infrastructure in another

  This leads to better access to finance, technology, expertise, and improved infrastructure, industry, and an increase in services
• Industrial Development (Reducing the Development Gap)

  LICs tend to have economies based on agriculture - developing industry increases GNI and improves levels of development as productivity, levels of skill, and infrastructure are improved
• Intermediate Technology (Reducing the Development Gap)

  IT is tools, machines and systems that improve quality of life but are also simple to use affordable to buy or build and cheap to maintain

  Eg solar panelled cookers or lightbulbs!

  This allows people to work in homes or businesses after dark, and helps skills, incomes, and industrial output to increase - this reduces the development gap
• Tourism (Reducing the Development Gap)


  Can provide increased income as there will be more money entering the country
• Microfinance Loans (Reducing the Development Gap)


  When small loans are given to individuals in LICs to allow them to start their own businesses and become financially independent

  This works in practise, but may not be able to reduce poverty on a large scale
• Tourism in Kenya


  Kenya is an LIC in Africa - Kenya's government is trying to boost tourism as a way of increasing development

  Visa fees were cut by 50% in 2009, and were scrapped for under-16s to encourage more families to visit

  Landing fees at airports have also been cut

  Tourism has doubled in Kenya between 1995 and 2011

  
  

  Benefits:

  -Tourism is 12% of Kenya's GDP (money that can be spent on development!)

  -10% of people in Kenya are employed in tourism

  -Kenya's HDI score has increased from 0.45 to 0.55 since 2000

  -National parks can charge money which they use to maintain the environment and wildlife

  
  

  Negatives:

  -Only a small amount of the money earned actually goes to locals

  -Some Maasai tribespeople were forced off their land to create national parks for tourists

  -Tourist vehicles can damage the environment
• TNCs (Trans-National Corporations)


  Companies that are located in or produce and sell products in more than one country

  Factories tend to be located in poorer countries where labour is cheaper so they make more profit

  They can improve the development of countries they work in by transferring skills, jobs, and money to less developed countries

  
  

  Advantages:

  They create jobs!

  Employees in LICs get a more reliable income

  They spend money to improve local infrastructure

  New technology and skills are brought to poorer countries

  
  

  Disadvantages:

  Employees in poorer countries may be paid less than employees in richer countries

  Employees in poorer countries have to work long hours in poor conditions

  Profits go back to richer countries and are not reinvested in the poorer countries

  Jobs created in LICs aren't secure
• De-industrialisation (Economic Development in the UK)


  Cause of economic change

  -Fewer jobs are available in manufacturing and heavy industries (i.e. coal mining and steel production)

  -These used to be primary sources of employment and income for the UK GDP
• Globalisation (Economic Development in the UK)


  Cause of economic change

  -Manufacturing has moved overseas where labour costs are lower

  -Their headquarters often remain in the UK

  -Trade with other countries is an increasingly important part of UK GDP (uh oh!)
• Government Policies (Economic Development in the UK)


  Cause of economic change

  -Government decisions of investment in new infrastructure and technology and support for businesses affect how well the economy grows

  -Membership in government groups (e.g. World Trade Organisation) make it easier for companies in the UK to operate across the world