Development in Economies Around the World Notes

Raw Materials

  • Raw materials are extracted, grown, or produced.
  • Developing countries rely on raw materials, trading them to developed countries for finished goods.
  • Examples of raw materials: oil, coal, timber.
  • Raw materials are used in manufacturing and production.

Services

  • Services, such as banking, finance, plumbing, and cosmetology, constitute the majority of the economy.

Economic Development

  • Economic development means changing from a traditional economy to one based on technology.

Traditional Economy

  • Centers on individual survival.
  • Families and small communities produce their own food, clothing, housing, and household goods.
  • Also called subsistence.
  • Developing countries with traditional economies often rely on agriculture.

Primary, Secondary, and Tertiary Economies

  • Primary: Extraction of raw materials (e.g., agriculture, mining).
  • Secondary: Manufacturing or producing goods.
  • Tertiary: Providing services (e.g., banking, cosmetology).

GDP per Capita

  • Definition: Total value of goods and services produced by a country in a year, divided by the number of people in the country.
  • Example: New Zealand’s GDP per capita was 42,900.

GNI per Capita

  • Definition: Total income received by a country from its residents and businesses (domestic or abroad), divided by the total population.
  • Example: Singapore has a GNI per capita of 34,760.

Literacy Rates

  • Definition: Percentage of a population that can read and write.
  • Typically at least 95\% or higher in developed countries.

Age Structure

  • Countries with a large population under 15 may spend more on education.
  • People under 14 typically cannot maintain steady, full-time work to support the economy.

Life Expectancy

  • Definition: Average number of years a person can expect to live.
  • Example: Japan has the highest life expectancy at 82.7 years.

Middle Class

  • Middle-class incomes fall between poverty and great wealth.
  • Some developing countries have large populations living in poverty (e.g., Haiti, where 59\% of people live in poverty).

Balance of Trade

  • Measured by the value of exports minus the value of imports.
  • Trade surplus: Exports > Imports.
  • Trade deficit: Imports > Exports.

Electrification

  • Electrification is often expensive.
  • High costs of oil, natural gas, and coal may slow electrification.
  • Hydroelectricity or nuclear energy require technology and money that developing countries may lack.

Unemployment Rate

  • Can indicate the level of economic development.
  • Developed countries: unemployment often below 10\%. Developing countries: unemployment can be very high (e.g., Zimbabwe, up to 95\%.)

Agricultural Output

  • Improved technology allows fewer farmers to harvest more food.
  • Raises income in rural areas and allows more people to work outside agriculture.

Newly Industrialized Countries

  • Lower poverty rates than less developed nations.
  • Have not yet reached income and education levels of developed countries.
  • Examples: India, Brazil, and Thailand.

BRICS

  • Brazil, Russia, India, China, and South Africa.
  • Large countries with large, rapidly growing economies. Not a political or trade alliance.

Human Development Index (HDI)

  • Measures the development of nations, taking into account:
    • Literacy rates
    • School enrollment
    • Life expectancy