Reducing the development gap + globalisation

How to reduce the gap between HICs and LICs

investment, tourism, aid, fair trade

How does investment reduce the development gap

TNCs invest money and skills in LICs. This helps the development of infrastructure. Encourages other businesses to follow

How can manufacturing stimulate the economy

A new manufacturer such as shell start refining oil in Nigeria. Local firms provide shells refining with component or product. Local people earn more money from working in shell. Local people spend more money in local businesses. Taxes to the government from businesses go up. Government spends the money improving infrastructure to attract more companies

aid

is when a country or organisation donates resources to another country to improve people’s lives

Multilateral aid

rich countries give money to organisations who then distribute the funds

short term aid

emergency response

Bilateral aid

aid from one country to another

Trade

is the buying and selling of good between countries

Quotas

is the limit number of products you can import. Usually applied on primary products

Faire trade

an international movement looking to make sure farmers in poorer countries are getting a fair deal

what is fair trade premium used for

wells, improving schools and hospitals

what items are fair trade

flowers, coffee and cotton

Globalisation

is the process by which the word is becoming increasingly interconnected.

interdependence

is the reliance of countries on one another for goods, services and money

Fashion

is a popular or the latest style of clothing

Industry

is an economic activity concerned with the processing of raw materials and manufacture of goods

Consumerism

is the increasing promotion and purchase of good that buyers are interested in

Mutual exploitation

is the relationship between two parties who both benefit taking advantage of each other

Why is production of global fashion in LICs

low labour, fewer regulations

Why is marketing and consumption in HICs

higher purchasing power, advanced marketing

What are the causes of globalisation

low labour in LICs, improvement of communication, freedom of trade, improvements in transport

outsourcing

when a company hires another business to do parts of its work

Trading blocs

groups of countries that make agreements to trade or boost their economies

Examples of trading blocs

EU (Brussels) ASEAN (Jakarta)

Benefits of trading blocs

no tarrifs,increase in employment, businesses expand

Protectionist measure

is an action taken by a nation to protect its economic growth

Who benefits less in mutual exploitation

LICs benefit less as they cannot negotiate deals

Negatives of Globalisation

exploitation of labours weaken local job market, global diversity is threatened

Positives of Globalisation

implement, global connections, foreign investment