G2 - The Changing Economic World

Development

the progress of a country in terms of economic growth, use of technology and human welfare.

quality of life

the wide range of human needs that should be met alongside income growth

what are the 10 development indicators

1. GNI and GDP in US dollars

2. life expectancy

3. literacy rates

4. birth rate

5. death rate

6. infant mortality

7. people per doctor

8. calorie intake

9. access to clean water

10. car ownership

GNI for each country´s economy

• LIC - $1,045 GNI and less

• NEE - between LIC and HIC

• HIC - $12,746 GNI and above

what are the limitations of social and economic measures? (5)

• can give false predictions as it is average for whole country

• use of n a single measure is misleading as different indicators may develop at different times

• data can be out of date

• data can be unreliable due to misreporting/not available due to conflict, disasters, difficulties accessing remote areas

• governments may distort available data

examples of LICs

• afghanistan

• somalia

• uganda

examples of NEEs

B - Brazil

R - Russia

I - India

C - China

S - South Africa

M - Mexico

I - Indonesia

N - Nigeria

T - Turkey

What is the HDI?

• Human Development Index

• Calculated using GNI, life expectancy and literacy rates to measure development

What’s does the DTM show?

• population changes over time

• Demographic Transition model

• birth rate and death rate

Physical Causes for Uneven Development

• Extreme Climates → possibly less access to clean water and less ability to grow crops

• Many Natural Hazards → money spent on repairing damages

• Natural Resources → some countries ma have less of these

• Terrain → steep, mountainous terrain harder to grow crops on

• Landlocked → harder to trade, less profit

• Rapid population increase → pressure on resources and services needed for development

Economic Causes for Uneven Development

• LICs rely on primary resources → low value, prices fluctuate from disasters/disease, so little income

• TNCs may exploit LICs, paying low prices. Corrupt governments can sell resources to TNCs for personal gain

Historical Causes for Uneven Development

• colonisation → colonisers exploit resources eg. raw materials so countries could not take advantage of their resources to generate their own development

• political issues → war and conflict after independence of countries meant money spent on repairing damages and military rather than development

Consequence of Uneven Development - Disparities in Wealth

• can be in separate countries or within the same country

• countries with better balance of trade typically wealthier

• LICs have become dependant on HICs for aid, often resulting in debt

Consequence of Uneven Development - Disparities in Health

LICs have less:

• access to clean water

• quality healthcare

…and more:

• infectious diseases such as malaria, tuberculosis and diarrhoea are the main cause of deaths, especially among children

Consequence of Uneven Development - Internal Migration

• People move to improve their quality of life

• Some move for better opportunities, wages, healthcare and education (eg. Eastern Europe → Western Europe)

• Some are forced out of country by persecution, conflict or poverty (eg. by boat from African → European countries)

How can we reduce development gap? (7)

• International Aid

• Intermediate Technology

• Fair Trade

• Debt Relief

• Micro-finance loans

• Investment

• Industrial Development and Tourism

International Aid

• Can be short term (eg. building homes after earthquake) or long-term (eg. preventing problem from happening again by building dam).

• Provided by a charity group, country or group of countries.

Intermediate Technology

• Uses simple, cheap to build and maintain technology

• Can be set up by local community

• works to improve development for community

Fair Trade

• Producers receive a guaranteed fair price for produce/crops

• Price covers cost of production and enables for reasonable standard of living

• Puts money into community projects eg. water and schools

Debt Relief

• Debt may include interest, so some countries in constant loophole of paying off part of debt and more added on

• Countries put money into paying back debt and cannot spend money on development projects

Micro-finance Loans

• Small amount of money lent to individuals in LICs to help start a business

• People can work their way out of poverty and enable development

Investment

• FDI: foreign direct investment; when 1 country buys a product or invests in the infrastructure of another country

• Creates jobs and puts money into local economy

Industrial development and Tourism

• Investing into manufacturing and tourism → creates more wealth than primary industries

• governments can tax this profit and invest taxes into development projects

Kenya - Tourism Statistics

• Tourism accounts for 15% of Kenya’s GDP.

• Attracts 700,000 visitors per year

• Are 250,000 tourism related jobs.

What company has invested in Kenya?

Hilton Hotels. This creates jobs both directl in the hotels eg. cleaner and indirectly in supporting industries like taxi companies.

What attracted people to Kenya?

• Wildlife Safaris (buffalos, elephants, rhinos, lions, leopards)

• 23 National Parks eg. Tsavo and Masai Mara

• Varied scenery (savannah, grassland, mountains, forests, beaches, coral reefs)

Vietnam Population

96 million

Vietnam Birth Rate

16 per 1000

Vietnam Death Rate

6 per 1000

Age Distribution of Vietnam

mostly younger generation

Vietnam Urban Population Percentage

35%, but is increasing with rapid rural→urban migration

Vietnam Percentage of Job Sectors

Primary - 48%, rice, coffee, tea

Secondary - 21%, offshore location for TNCs, generates 33% GDP

Tertiary - 31%, generates 51% GDP

tourist industry grown to 4 million international visits per annum

Role Of TNCs

• transnational corporations

Why do TNCs invest in Vietnam?

It’s cheap labour, growing home market and fewer industrial laws and restrictions.

These things mean the companies make more profit (efficient).

Nike in Vietnam - Facts

• 34 plants in Vietnam

• Majority of workers are women under 25

Why is Vietnam important?

• GDP growth rate of 6.3% represents its strong manufacturing exports and rising demands for goods and services

• trade surplus - exports more than it imports

• exports: crude oil, clothing, seafood, rice to USA, Japan, China.

• Joined World Trade Organisation in 2007 showing its influence on a global scale.

• Joined Association of Southeast Asian Nations (ASEAN) in 2105 showing its influence on a regional scale.

International Aid - Vietnam

• Multilateral aid - from World Bank for sustainable development and to promote good governance

• Bilateral aid - from Australia and USA. In 2017-18 Australia provided $484.2 million for projects.

• Voluntary aid - by charities eg. Action Aid working on women’s rights, tackling hunger, providing education.

What harms Environment in Vietnam?

• Urbanisation → pollution

• Logging → deforestation and soil erosion

• Overfishing → threatens marine life populations

• Energy consumption → 58% from fossil fuels

What benefits of Quality of Life in Vietnam?

• Growth in economy → rise in incomes

• Poverty decrease → 58% in 1993 to 3.2% in 2016

• More money → more have access to amenities to improve quality of life

What negatives of Quality of Life in Vietnam?

• Inequalities in QOL → worse for ethnic minorities and people in rural areas

• Some people (reportedly those working under TNCs) had to work long hours in difficult conditions

Deindustrialisation

decrease in primary and secondary employment sector

Why has the Primary Sector decreased?

fewer workers required due to increased mechanisation and automation

Why has the Secondary Sector decreased?

competition form overseas where labour costs are cheaper and production methods are more advanced

Why has the Tertiary Sector increased?

increased since 2001, eg. tourism, financial services and healthcare.

Why has the Quaternary Sector increased?

increased since 2001, eg. software companies, research and development in business or science parks on edges of cities like Cambridge or Bristol

Differences between North and South

• North depended on industries which are now declining such as steel-making.

• South developed rapidly because of fast-growing tertiary sector.

• Higher wages in South.

• Unemployment higher in North.

• Higher demand, so higher housing prices in South.

• More work opportunities and higher wages in SOuth, so population grows more rapidly there

There are exceptions to these.

Globalisation

process i which the world becomes increasingly interconnected in terms of industry, markets, migration and cultures