5.1 Economic growth and development

Economic development

An increase in a countries GDP per capita due to a fundamental change in the structure of society

Economic growth

An increase in a countries GDP per capita not due to a fundamental change in society

Fundamental changes in society

Rural to Urban

Primary sector to tertiary sector

Poor education to good education

Poor infrastructure to good infrastructure

Characteristics of LDCs

High population growth

High foreign debt

Uneven distribution of wealth

Population engage in primary sectors

How can countries develop

Agriculture - decrease emphasis on one crop and diversify

Basic infrastructure

Corruption - reduce bureaucracy to reduce corruption

Education

Types of foreign aid

Voluntary agencies - provide basic relief

Buying fair trade goods

Multinationals setting up in LDCs

Official Development Assistance

Benefits of ODA

Builds infrastructure

Improves health service

Provides clean water and sanitation

Negatives of ODA

Unfair distribution of benefits

Creates a culture of dependency

Costs on the environment

How can each factor of production effect economic growth/development

Land - countries with large natural resources are wealthier

Labour - countries with better educated workers are wealthier

Capital - Infrastructure is vital to the economy

Enterprise - if a country encourages enterprise it is likely to be more developed

The metrics for HDI

Health

Education

GNI per capita

GINI index

A measure of the distribution of income across a population

Challenges for reducing inequality

Increase cost of doing business

Increased cost is passed onto consumer - inflation

Government expenditure will increase

Opportunity cost - the resources could have been put to another use

Why Irelands population is growing

Positive net migration

War in Ukraine

Improved healthcare

High birthrate and decreasing death rate

Why Irelands population is aging

Good healthcare

Improved income/standard of living

Focus on a healthy lifestyle

Advantages of an ageing populaiton

Increased tax revenue

Larger labour force

Experienced work force

Disadvantages of an ageing population

Pressure on pensions

Tax burden for providing services to the elderly

Participation rate falls in the labour force

How the government can adapt to an older population

Increase spending on healthcare

Increase the pension age

Encourage youth employment

Consequences of raising the retirement age

Increased government revenue - more PAYE

Decreased government expenditure - on pensions

Unequal - wealthy people will still have the means to retire at a normal age

Competition for younger workers - with so many old people employed there wont be many openings for young people