2B - Changing Economic World

Development

• an improvement in living standards through better use of resources

• economic - progress in economic growth through levels of industrialisation and use of technology

• social - improvement in peoples standard of living, for example claen water and electricity

• environmental - this involves advances in the management and protection of the environment

Measuring development

wealth

• GNI - the total value of goods and services produced by a country in a year, including income from overseas. gets higher as the country develops

• GNI per head/capita - the GNI divided by the population of a country . gets higher as the country develops

Education

• Birth rate - the number of live births per thousand of the population per year. gets lower as the country develops.

• literacy rate - the percentage of adults who can read and write. gets higher as the country develops

Health

• Death rate - the number of deaths per thousand of the population per year. gets lower as the country develops

• people per doctor - the average number of people per doctor. gets lower as the country develops

• access to clean water - the percentage of people who can get clean drinking water - gets higher as the country develops

• life expectancy - the average age a person can expect to live to. gets higher as the country develops

limitations of development measures

• GNI per head can be misleading when used on its own because it is an average - variations within the country won’t show up

• social indicators can also be misleading if they are used on their own because as a country develoos, some aspects develop before others so it might seem like a country is more developed than it actually is.

• Aren’t always accurate - GNI usually misses out informal employment which can account for a large proportion of national income

Human Development Index

• HDI is calculated using income (GNI per head), life expectancy and education level

• every country has a HDI value between 0 (least developed) to 1 (most developed)

• tells you about both the economic development and the quality of life

• this avoids somes of the problems of using individual measures

Development gap

• the difference in the standards of living between the world’s richest and poorest countries

The Demographic transition model

• shows changes over time in the population of a country

• when the birth rate is higher than the death rate, the population grows - natural increase

• natural decrease is when the death rate is higher than the birth rate

• these differ depensing on levels of development

• stage 1 - least developed. very few places are at this. the birth rate is high because there is no use of contraception. people have a lot of children because infant mortality rates are high. the death rate is also high due to poor healthcare or famine and the life expectancy is low. fluctuation but fairly stable population.

• stage 2 - not very developed. many LICs are in stage 2. the birth rate remains high - the economy is agriculture based so people have lots of children to work on farms. better healthcare increases life expectancy so death rates fall. population grows.

• stage 3 - more developed. most NEEs are in stage 3. The birth rate falls rapidly as contraception use increases and more work instead of having children. the economy changes from farming to manufacturing so fewer children need to work on farms. improved healthcare means that the death rate falls slowly and life expectancy increases. population still grows but not as fast.

• stage 4 - most developed - most HICs are at one of these stages. Birth rates are low - people expect a high standard of living and may have dependant elderly relatives so there is less money available for having children. healthcare is goood so th e death rate is low and life expectancy is high. birth rate tends to fluctuate depending in the economic situation.

• stage 5 - most developed. a few HICs are at this stage. Birth rates are very low and below death rate. death rate decreases slightly becayse of agein population. total population starts to decrease.

physical causes of uneven development

• location - if a country is landlocked, it has no access to the seas, making it difficult for it to trade which prevents economic growth. scenery might attract tourists.

• poor farming land - if the land is too steep or has poor soil, crops are difficult to grow. it might also be harder for livestock to graze - less food produced and fewer crops to sell and malnutrition

• climate - some places will have a hot, dry climate with scarce and unreliable rainfall so less food can be produced and fewer crops to sell and malnutrition. climate related diseases and pests - affect the ability of the population to stay healthy and work. some climates may attract tourists on the other hand.

• natural disasters - extreme weather often hits tropical regions. an extreme weather season can reduce quality of life, slow development and it can be costly to replace damaged infrastructure. risk of tectonic hazards. benefits of volcanic material.

• raw materials - countries without many raw materials such as oil, coal or metal ores have fewer products to export to other countries - make less money - can’t spend much on development projects. some developing countries have these materials but can’t afford the infrastructure needed to exploit them

economic causes of uneven development

• trade - the exchange of goods are services between countries. poor trade links (trading a small amount with only a few countries)makes less money for spending on development. countries that exporr more than they import have a trade surplus - improves national economy

• economy based on primary products - primary products are sold for less than manufactured goods. the prices of primary products also fluctuates significantly - sometimes the price falls below the cost of production. wealthy countries and larhe international companies can also force down the prices of raw materials they buy from poorer countries.

• aid - can help some countries develop key projects for infrastructure faster and can also improve services such as schools, hospitals and roads. too much reliance on aid might stop other trade links frim being established. poor countries may borrow money from other countries and international organisations to cope. this money sometimes needs to be paod back (sometimes with interest) - less for development

human, political and historical causes of uneven development

• education - creates a skilled workforce meaning mre goods and services are produced. educated people earn more money - they can pay more taxes - help country develop

• health - lack of clean water and poor healthcare means a large number of people suffer from diseases. people who are ill cannot work so there is little contribution to the economy

• corruption - corrupt institutions and the stability of the government can affect its ability to trade amd the ability to invest into services and infrastructure

• conflict - war, especially civil war can slow or reduce development, even after it is over. money is spent on arms and on training soldiers rather than development, people are killed and damage is done to infrastructure and property. important servces such as healthcare and education are disrupted which can lead to an increase in infant mortality rates and a decline in literacy rates

• colonisation - countries that were colonised are often at a lower development level when they gain independance than they would be if their hadn’t been colonised. european countries colonised many countries in asia, africa, australasia and the americas between the 16th and 20th centuries. the colonisers removed raw materials and sold back manufactured goods which meant that profits went to colonisers, increasing inequality. colonisation also prevented the colonised countries from developing their own industries.

consequences of uneven development

• people in more developed countries have higher incomes than people in less developed countries. uneven development can also lead to big inequalities of wealth within countries. wealth can impact peoples standard of living - the wealthy can afford goods and services that make their lives more comfortable and convenient.

• healthcare in more developed countries is usually better than in less developed countries. people in HICs live longer. infant mortality is much higher in less developed countries. in LICs and NEEs, a lack of adequete healthcare means that people die from diseases that could easily be treated in HICs.

• many people from LICs and NEEs move to HICs to escape conflict or to improve their quality of life. migrant workers contribute to the economies of the HICs they move to instead of the LICs they leave which further increases the development gap.

reducing the development gap - investment

• FDI is when people or companies in one country buy property or invest in infrastructure in another

• FDI can involve the development of roads, improved access to water and electricity - dams, harbours, ports and new industries

• can also provide employment from abroad

• as economies grow, poverty decreases and education improves

• multiplier effect

reducing the development gap - aid

• money or resources are given to a country by a charity or foreign government to improve peoples lives

• it can take the form of money (grants and loans), emergency supplies, food, technology or skilled workers

  types of aid

• short term - emergency help usually in response to a natural disaster

• long term - sustainable aid that seeks to improve resilience

• bilateral - aid from one country to another - often tied

• tied - aod given with certain conditions. e.g. that the recipient has to spent the aid money on the donor country’s products

• multilateral - richer governments give money to an international organisation such as the world bank which then redistributes the money as aid to poorer countries

• voluntary - money donated by the general public in richer countries and distributed by NGOs.

• only aid that is long term and freely given can really address the development gap. aid can enable countries to invest in development projects such as roads, electricity and water management that can bring long term benefits.

reducing the development gap - goat aid

Goat Aid Oxfam is a project set up to help families in African countries like malawi. the money donated is used is used to buy a family a goat which produces milk, butter and meat. This has many advantages for the family and local community:

• goats are an excellent food source, providing both milk and meat

• manure can be used as a crop fertiliser

• milk can be sold as a source of income to pay for food and education

• goats can be easily and kids sold at market or given to other families

• care of the goats builds community spirit

reducing the development gap - fairtrade

• richer countries benefit from world trade more than poorer countries.

• tariffs - taxes paid on imports - make imported goods more expensive and less attractive than home produced goods

• quotas - limits on the quantity og goods that can be produced. usually applied toprimary products so they mainly affect poorer countries

• free trade is when countries don’t charge tariffs and quotas to restrict trade with each other - has potential to benefits the world’s poorest countries

• trading groups are countries which have grouped together to increase trade between member countries.

• fairtrade - the farmer gets all the money from the sale of his crop - guarantees the farmer a fair price - part of the price is invested in local community development projects - in return the farmer must agree to farm in an environmentally friendly way - product gains a stronger position in the global market

• problem is that sometimes only a tiny proportion of the extra money reaches the producers while the rest boosts retailer’s profits

reducing the development gap - immediate technology

• sustainable technology that is appropriate to the skills, needs, knowledge and wealth of local people

• it must be suitable for the local environment and must not put people out of work

• it often takes the form of small scale projects - simple to use, cheap and easy to maintain

reducing the development gap - industrial development

• brings employment, higher incomes and opportunities to invest in housing, education and infrastructure

• developing GNI boosts GNI and development as productivity, skills and infrastructure are improved

reducing the development gap - debt relief

• when some or all of a country’s debt is cancelled or interest rates are lowered. to qualify, a country has to

• demonstrate that they could manage their own finances, show that there is no corruption in their government, agree to spend the saved debt money on education, healthcare and reducing poverty

reducing the development gap - microfinance loans

• small loans given to people in LICs who may not be able to get loans from banks

• this enables them to start their own businesses and become financially independent

• although they work for ome people, it can also cause problems by encouraging people to get into debt. it’s also not clear if it can reduce poverty on a large scale.

Jamaica - background

• one of the largest islands in the west indies.

• pop. 2.7 million

• economy based on a ring of minerals (bauxite and oil), agricultural products (sugar and rum) and some manufacturing

• has suffered from slow growth, high unemployment and debt

• It has a tropical climate with high temperatures throughout the year. Jamaica is famed for its beautiful sandy beaches and rich cultural heritage. It has excellent communications and is a popular destination for cruise ships. 

How tourism has contributed to jamaica’s development

• there has been an almost exponential growth in the number of visitor arrivals to Jamaica between 1994 and 2016.

• tourism is one of Jamaica’s top sources of revenue. The industry contributes over 50% of the country’s total foreign exchange earnings

• in 2015, 2.12 million visited.

• then, the tourism industry contributed to 27% of its GDP

Employment

• tourism is the main source of employment in jamaica

• provides jobs for 200000 people either directly in hotels, manufacturing and banking

• these are mainly in tourist towns

• employment in tourism provides income - further boosts economy - people spend money in local shops, services and recreation. those in employment can acquire new skills - better future job prospects - quality of life improved

Infrastructure

• tourism has led to a high level of investment on the north coast where much of the country’s tourism is centred

• new port and cruise liner facilities have been built at trelawney along with new hotel accomodation

• however, improvements in roads and airports have been slower and some parts of the island remain isolated

Quality of life

• in the northern tourist areas of montego bay and ocho rios, wealthy jamaicans live in high quality housing witha high standard of living. they have benefitted from this industry

• however, many also live in poor housing with a limited food supply and inadequate access to fresh water, helathcare and education

The Environment

• mass tourism can create environmental problems such as footpath erosion, excessive waste and harmful emissions

• but can also bring environmental benefits: conservation and lanscaping projects that provide job opportunities as well

• montego bay on the north coast has been improved by landscaping

• a new water treatment plant at Logwood has reduced pollution from hotels

• the Negril marine nature park attracts many tourists - direct and indirect income

• community tourism and ecotourism is expanding in more isolated regions with people running small scale guest houses or acting as guides

Nigeria: an NEE - background

• Located in west Africa on the Atlantic coast

• bordered by Benin to the west, Niger to the north, Chat to the north east and Cameroon to the east.

• Most populous and economically important country in Africa

• Range of natural environments, from semi-deserts in the north to tropical rainforest in the south.

Nigeria: an NEE - global importance

• 7th in the world by size of population

• World’s 21st largest economy as of 2014 and has experienced rapid growth in GDP

• 12th largest oil producer in the world - producing 2.7% of world oil

• Lagos is a thriving world city with a strong economic and financial base

• plays an important UN peace keeping role in world affairs - 5th largest contributer to UN peace keeping missions

• One of the fastest growing economies in africa and has the highest GDP on the continent

• 3rd largest manufacturing sector in Africa

• Has the highest farm output in Africa - highest number of cattle

• Seen as an indicator for the entire continent - if Nigeria thrives, Africa will thrive

Nigeria - wider context

Political

• European superpowers occupied much of Africa

• Nigeria was a British colony

• gained independance in 1960

• period of political instability followed by civil war (1967-70)

• 1991 - Abuja becomes new capital

• politically stable since 1999

• fair elections (2011, 2015)

• significant investment since

Social

• multicultural + multi faith

• social diversity is one of Nigeria’s greatest strengths

• however, it has lead to conflicts and power struggles

• islamist fundamentalist group Boko Haram caused conflict and hindered economic development

Cultural

• rich and varied artistic culture

• Thriving music, film and literacy sectors

• Nollywood - one of the largest film industries in the world

• football team has won the African cup on 3 occasions

Environmental

• High rainfall to the south - tropical rainforest: cocoa, rubber and oil palm

• Decreased rainfall further north - savannah grassland: millet, cotton and ground nuts

• Cooler wetter conditions - plateau: farming

• Semi desert conditions to the far north: nomadic cattle grazing

Changing industrial structure and economy balance

• Nigeria has a significant inequality gap. Wealth is typically found in the south, in and around Lagos. However, the north is exceptionally poor. Almost half of Nigeria’s population lives on less than US$1 per day.

• its economy has transformed from one mainly based on agriculture to manufacturing and services

• Mechanisation and rural-urban migration have led to a decline in the number of people employed in agriculture.

• Manufacturing and services have grown due to Nigeria’s increased political stability, cheap labour force and a huge market. Many industries have benefitted from links to each other (e.g petrochemicals, plastics and detergents)

• Today, agriculture contributes 22 per cent of Nigeria’s GDP.

• The industrial sector now accounts for about 27 per cent of GDP. Nigeria has the fastest-growing industrial sector in Africa

• The service sector now employs 53 per cent of workers and accounts for 50 per cent of the country’s GDP.

• The oil and gas industry has been very important - discovery of oil in the Niger Delta in the 1950s significantly changed Nigeria’s economy.

• Despite the country having the 11th largest oil reserves in the world and accounting for 90% of Nigeria’s international currency coming from oil, inefficiencies at refineries, the large domestic demand for energy, social + environmental issues in the delta region and fluctuating prices have created an economic challenge.

manufacturing industry stimulating economic growth

• Multiplier effect -

• A factory provides employment for people, usually those who are deprived

• This has several benefits as not only does it bring in money for struggling people to able to afford a better living standard, factory workers also gain skills which could alloow them to make more money.

• factories have to pay taxes to the government. This money can be invested in schools, infrastructure and improving services.

• as a result, the population becomes healthier and better educated.

• As investment increases in these, new opportunities are opened which can also include more manufacturing and supply industries, continuing the multiplier effect.

TNCs in Nigeria

• Transnational Corporations (TNCs) have had an important role in Nigeria’s economic growth

• TNC - a large company that operates in several countries

• They can invest huge amounts of money and expertise whilst benefiting from tax incentives, cheap labour and large internal markets

• currently 40 TNCs operating in Nigeria - most European and American

• increasingly, Asian TNCs are also investing in Nigeria

Advantages of TNCs

• Large Companies provide employment and training of skills

• modern technology is introduced

• bringing financial investment into the host country’s economy - improving services

• local companies may benefit supllying the TNCs

• international links that provide access to markets around the world

• higher wage levels

Disadvantages of TNCs

• Can exploit the low wage economy and avoid paying local taxes

• profits leave the country and benefit shareholders, often in HICs

• working conditions may be poor with fewer rules and regulations than in HICs - exploitation

• paid wages tend to be lower than in the home country of the TNC

• Higher paid management roles usually held by foreign nationals

• raw materials are exported before being refined, which reduces profits in LICs and NEEs

• causing significant environmental damage without taking responsibility for cleaning up

• powerful TNCs can exert pressure on governments

• being able to withdraw from a country if circumstances change

• incentives used to attract TNCs could have been spent supporting Nigerian companies

Shell in Nigeria

• Shell is one of the world‘s largest oil companies and has its headquarters in the netherlands

• The swampy river delta is one of the most difficult places to extract oil

• Shell has been able to invest huge amounts of money and expertise into extracting oil here

Benefits:

• making major contributions in taxes and export revenue

• providing direct employment for 65000 Nigerian workers and a further 250,000 jobs in related industries

• giving 91% of Shell contracts to Nigerian companies

• Supporting the growth of Nigeria’s energy sector

Problems:

• oil spills causing water pollution and soil degradation - reduced agricultural output

• frequent oil flares - toxic fumes in air

• militant groups distrupt oil supply in delta

• oil theft and sabotage - hige problems - cost TNCs and government

Nigeria’s trading relationships

• until 1960, it was part of the british empire

• its political links were with the UK and other members of the empire

• since becoming independent, it has become a member of the commonwealth

• its main exports are crude and refined petroleum, natural gas , rubber, cocoa andd cotton

• Exports of crude oil to India, China, Japan and SK increased by 40% between 2013 and 2014

• its main imports are refined petroleum from the EU and the USA, cars from Brazil and the USA, telephones, rice and wheat

• telephones from china in high demand - growing pop and emerging middle class

Aid to nigeria

• despite rapid economic growth, many nigerians are still very poor.

• over 60% live on less than $1 a day

• high birth and infant mortality

• most comes from individual countries - US UK

• others from charities and NGOs

Environmental impacts of economic growth

Quality of life in nigeria

How the UK economy has changed

• before 1800, most people in the UK worked in agriculture and mining - primary sector

• industrial revolution of the 19th century changed that - people moved to towns and cities for manufacturing work - secondary sector

• however, since the 1960s manufacturing has declined and service (tertiary) and research and IT (quaternary) industries have developed

• in 2017, these industries employed 83% of the UK’s workforce - this proportion is increasing

Why has the UK economy changed?

• de industrialisation - the decline in manufacturing industry and the subsequent growth in tertiary and quaternary employment

• increased automation has lead to job losses

• as other countries such as china, malaysia and indonesia industrialised, they could produce cheaper goods because labour there is less expensive - uk industries closing

• globalisation - the growth and spread of ideas around the world. made possible by developments in communication and transport

• many people now working on global brand and products - boosted world trade - increased imports

• government policies:

  • before the 1980s, the gov had created state run industries - National Coal Board, British Rail and British Steel Corporation

  • gov money spent to support declining uk industries - aeging equipment, outdated working practices and too many employees made them unprofitable

  • in the 1980s, these state run industries were sold off to private shareholders to create a more competitive business environment - major job losses but increased efficiency

  • many new private companies brought innovation and change - derelict industrial areas - financial centres and modern retail

  • after this - deregulation - removing restrictions and taxes on businesses - encourage investors to move here - tertiary and quaternary attracted

  • trade with other countries is an increasingly important part of the uk’s gdp - proportion of uk’s gdp from foreign trade - increased from 38% 1965 to 62% in 2017

Development of IT

• computers allow large amounts of data to be stored and accessed very quickly

• internet enables people to communicate with each other instantly around the world

• tech continues to develop at a rapid pace

• many people can access i

• enables people to work from home

• many new businesses directly involved with it

• over 1.3 work in this sector

• uk is one of the world’s leading digital economies, attracting businesses and investment from abroad

service industries and finance

• today it contributes over 79% of UK economic output, compared with 46% in 1948

• finance is an important part of the uk service sector

• the uk is the world’s leader for financial services

• finance sector accounts for 10 of the uk’s gdp and employs over 2 million people

research

• employs over 60,000 highly qualified people - estimated to contribute over £3 billion to the uk economy

• research is done in british universities, private companies and government bodies

Science parks

• a group of scientific and technical knowledge based businesses located on a single site

• most are associated with universities that enable them to use research facilities and employ skilled graduates

• may also include support services - financial services and marketing

• around 75000 people work in science parks

business parks

• area of land occupied by a cluster of businesses

• usually located on the edges of towns - land tends to be cheaper than in town centres, more land to extend businesses, better access for workers and distribution - by passes and motorways with less congestion, businesses can benefit by working together

Environmental impacts of industry

• large scale extraction insustries such as mining and quarrying can lead to huge waste tips piled up on the edges

• manugfacturing plants can look very dull and uninteresting and have a negative visual effect on the landscape

• industrial processes can cause air and water pollution as well as degrade the soil

• waste products from manufacturing are often taken into landfill

• transport of raw materials and manufactured products is usually by road - increased air pollution - new roads and widening also harms

how industrial development can be more sustainable

• tech used to reduce emissions from power stations and heavy industry

• desulphurisation - removes harmful gases like sulphur dioxide and nitrogen oxide

• stricter environmental targets put in place for industry on water quality, air pollution and landscape damage

• heavy fines imposed when an industrial pollution incident occurs

Changing rural landscapes - south cambridgeshire

• the mostly rural area surrounding cambridge

• population of 15,000 is increasing due to migration into the area

Social impacts

• commuters continue to use services in places where they work - negative effect on local rural economy

• 80% car ownership - increased traffic on narrow country roads and reducing demand for public transport

• modern developments on the edges of villages and gentrification of abandonned farm buildings - breakdown of community spirit

• young people cannot afford the high cost of houses and move away

economic impacts

• reduction in agricultural employment as farmers sell their land for housing development - might lead to increased construction jobs

• lack of affordable housing

• area has some of the highest petrol prices in the country due to the high demand

• increasing number of migrants from relatively poor parts of europe can put pressure on services and increase overall costs

Changing rural landscapes - the outer hebrides

• 27400 pop

• overall decline of more than 50% due to outward migration

social impacts

• number of school children expected to fall over the next few years - school closures

• fewer people of working age living there

• increasingly ageing population - care issue in the future

economic impacts

• uk and scottish governments provide subsidies towards the costs of operating ferries and the maintenance of essential services

• struggle to maintain the economy

road improvements

• extra lanes being added to main motorways - smart motorways

• 100 new motorways by 2020

• 1300 new lane miles added to motorways and trunk roads to tackle congestion

• improving links between london, birmingham and the north through these smart motorways

railway improvements

• vital to improve links between uk regions and the rest of europe

• electrification of the trans- pennine express railway between manchester and york by 2020 reducing journey times by up to 15 mins

• electrification of the midland mainline between london and sheffield by 2023

• hs2 - £50 billion plan for a high speed rail line to connect london with birmingham, sheffield, leeds and manchester and then newcastle and scotland

  crossrail

• links reading and heathrow to shenfield and abbey wood

• 32km of twin bore tunnels under central london

• improve journey timesacross london, easing congestion and offering better connectionsto the underground and to the rest of the uk and europe

• brings additional 1.5m people within 45 mins commuting distance of londons key business districts

• expected 200 million annual passengers

ports

• grimsby - leading port in terms of tonnage followed by tilbury, milford haven and southampton

• dover - main port for freight - lorries, cars etc