Section C - The changing economic world

The Changing Economic World – Measuring Development

What is Development?

Development refers to the progress in economic growth, the use of technology, and the improvement of people’s quality of life. It describes how advanced a country is socially and economically.

A more developed country (MDC) has a high standard of living, strong infrastructure, high literacy rates, and good healthcare. A less developed country (LDC) often struggles with poverty, poor healthcare, limited education, and unstable economies.

Development is a continuum rather than a simple divide — countries are at different stages and can move forward or backward over time.

Ways of Measuring Development

Development can be measured using a variety of economic and social indicators. These are divided into quantitative (numerical) and qualitative (descriptive) data.

Economic Indicators:

  • Gross National Income (GNI) per capita: The total value of goods and services produced by a country, including income from overseas, divided by its population.

    • Shows wealth, but not distribution or cost of living differences between countries.

  • Gross Domestic Product (GDP): The total value of goods and services produced within a country’s borders in one year.

  • Employment structure: The proportion of the population working in primary, secondary, tertiary, or quaternary industries.

Social Indicators:

  • Birth rate: Number of live births per 1,000 people per year.

  • Death rate: Number of deaths per 1,000 people per year.

  • Infant mortality rate: Number of deaths of children under one year per 1,000 live births.

  • People per doctor: Indicates access to healthcare.

  • Literacy rate: Percentage of people over 15 who can read and write.

  • Access to safe water: Percentage of people with access to clean drinking water.

Each indicator gives partial information, but none provides the full picture of a country’s development.

Composite Measures of Development

Because individual indicators can be misleading, composite indices combine several measures to give a more complete picture.

Human Development Index (HDI):

  • Created by the United Nations.

  • Combines:

    • Life expectancy (health)

    • Education (mean years of schooling and expected years of schooling)

    • GNI per capita (wealth)

  • Measured on a scale from 0 to 1:

    • 0–0.49: Low human development

    • 0.50–0.69: Medium

    • 0.70–0.79: High

    • 0.80–1.00: Very high

  • Countries such as Norway and Switzerland have high HDI; Niger and Chad have low HDI.

Limitations of Economic and Social Measures

Each indicator has weaknesses:

  • Data reliability: Some countries may lack accurate data collection or manipulate statistics.

  • Averages: National data can hide regional differences and inequality.

  • Cost of living: Exchange rates and purchasing power differ.

  • Quality vs quantity: High GNI doesn’t guarantee a good quality of life.

  • Cultural differences: Indicators may not capture values or wellbeing in all societies.

The Demographic Transition Model (DTM)

The DTM shows how birth and death rates change over time as a country develops. It has five stages:

Stage

Characteristics

Stage 1 – High Fluctuating

Birth and death rates are high due to disease, famine, and poor healthcare. Population growth is slow. Example: tribal societies.

Stage 2 – Early Expanding

Death rate falls due to improved healthcare and sanitation, but birth rate remains high. Population increases rapidly. Example: Afghanistan.

Stage 3 – Late Expanding

Birth rate begins to fall as people have fewer children; death rate continues to fall slowly. Population growth slows. Example: India.

Stage 4 – Low Fluctuating

Birth and death rates are both low, population growth stabilises. Example: UK.

Stage 5 – Natural Decrease

Birth rate falls below death rate, leading to population decline. Example: Japan.

The DTM helps explain development trends but doesn’t account for migration or government policy.

Population Pyramids

Population pyramids show the age and gender structure of a country.

  • LICs (Low-Income Countries): Wide base, narrow top – high birth rate, low life expectancy.

  • NEEs (Newly Emerging Economies): Narrowing base, expanding middle – falling birth rate, longer life expectancy.

  • HICs (High-Income Countries): Narrow base, wide top – low birth rate, ageing population.

They are useful for comparing countries at different DTM stages and predicting future population trends.

Alright, here’s Part 2 – Reducing the Development Gap — the second half of your sheet rewritten as clear, exam-style notes.

The Changing Economic World – Reducing the Development Gap

The Development Gap

The development gap refers to the difference in standards of living and quality of life between the world’s richest and poorest countries.
This gap exists between countries (e.g., UK vs. Chad) and within countries (e.g., urban vs. rural areas in India).

Causes of Uneven Development

1. Physical Causes

  • Climate: Extreme climates (hot, dry, or wet) reduce agricultural productivity.

  • Relief: Mountainous or landlocked regions find transport and trade difficult.

  • Natural hazards: Frequent earthquakes, droughts, or floods disrupt progress and destroy infrastructure.

  • Resources: Lack of natural resources limits industrial growth and trade potential.

2. Historical Causes

  • Colonialism: European powers exploited colonies for raw materials and cheap labour, leaving many countries with poor infrastructure and unbalanced economies.

  • Conflict: Wars destroy capital, displace populations, and discourage investment.

3. Economic Causes

  • Trade: LICs often export low-value primary goods (coffee, copper) and import expensive manufactured goods, leading to trade deficits.

  • Debt: Many LICs borrowed money for development but cannot repay it due to high interest rates.

  • Unequal terms of trade: Global markets favour developed nations, keeping poorer ones dependent.

  • Consequences of Uneven Development

  • Wealth disparities: Richer countries dominate global trade and finance, while poorer nations rely on aid or debt.

  • Health inequalities: LICs have higher infant mortality rates, lower life expectancy, and fewer medical facilities.

  • International migration: People move from poorer to richer regions for better opportunities, often creating “brain drain” in LICs.

Strategies to Reduce the Development Gap

1. Investment

TNCs (Transnational Corporations) and foreign governments invest in developing countries.

  • Brings capital, infrastructure, and jobs.

  • Risk: profits may leave the host country.

2. Industrial Development

Promoting manufacturing and industrial growth creates employment, raises income, and stimulates local economies.
Example: China used industrialisation to transform its economy.

3. Tourism

Tourism brings income and foreign exchange, encourages infrastructure development, and provides employment.
Example: Jamaica’s tourism industry contributes 24% of GDP.

4. Aid

Aid is financial or practical help given by governments or charities.

  • Short-term aid: Emergency relief after disasters.

  • Long-term aid: Development projects (education, water, agriculture).

  • Fair trade: Ensures producers in LICs get a fair price for goods, improving income and community investment.

5. Debt Relief

Reducing or cancelling debt allows countries to spend money on development projects instead of repayments.
Example: The World Bank’s Highly Indebted Poor Countries (HIPC) initiative.

6. Intermediate Technology

Simple, appropriate technology that meets local needs.
Example: WaterAid installing hand pumps and solar cookers in African villages.

Case Study – Jamaica: Using Tourism to Reduce the Development Gap

Background:

  • Jamaica is an NEE in the Caribbean with a population of around 2.7 million.

  • Tourism is its main source of foreign income.

Benefits:

  • Accounts for 24% of Jamaica’s GDP.

  • Provides 200,000 jobs directly and indirectly.

  • Investment in infrastructure: improved roads, ports, and airports.

  • Encourages local businesses such as restaurants and craft markets.

Problems:

  • Economic benefits are not evenly spread.

  • Environmental damage in coastal areas due to overdevelopment.

  • Reliance on tourism makes the economy vulnerable to global downturns.

Summary:
Tourism has reduced the development gap, but sustainability and inequality remain issues.

The UK’s Changing Economy (briefly mentioned on the sheet)

Although the UK is a High-Income Country (HIC), it still faces regional inequalities.

  • North–South Divide: The south (London, South East) has higher incomes, better education, and more job opportunities.

  • Deindustrialisation: Traditional industries declined, replaced by the service and technology sectors.

  • Government strategies: Investment in transport (HS2), enterprise zones, and local development funds aim to reduce this internal gap.

Summary – Reducing Global Inequality

  1. Trade and fair trade: Improves producer income.

  2. Aid and debt relief: Supports essential development spending.

  3. Tourism and investment: Encourage long-term growth.

  4. Technology transfer: Helps modernise agriculture and industry.

  5. Industrialisation: Creates jobs and raises GNI per capita.