2.4.2 Developed, Emerging and Developing economies

Question 1

BRICS

Answer 1

Brazil, Russia, India China and south africa → large, fast growing economies with influence on regional and global affairs, emerging economies

Question 2

Human development index

Answer 2

UN: Provides a measure of development based on access to health care and education, as well as national income (qual and quant aspects of development)

Question 3

Mean income and Median income

Answer 3

Average ncome (GDP/population) and Middle of all incomes

Question 4

BRICS

Answer 4

• Brazil, russia, india, china → grouped together because of their size and speed of development
• Transformed global trade relationships and changed trade patterns
• Responsible for half of world economic growth 2000-10
• Less affected by world finacial crisis 2008
• Growth now slowing in china and russia as their development is catching up
• Political issues in india and brazil have led to slower growth

Question 5

economic growth of the UK and BRICS

Answer 5

• UK has a more mature economy, grows at 2-2.5% pa
• S korea, singapore, taiwan have transitioned froma developing to mature economy over the last 30 years
• Productivity has increased
• Labour has migrated from rural to urban manufacturing centres
• Labour has become more skilled
• Russia has experienced structural change due to the collapse of communism and movement to a more free market economy
• Brazil economy is less open and depends heavily on exporting commodities so it has slower growth

Question 6

UK economic growth

Answer 6

• Advanced economy and therefore a lower growth rate than the BRICS, as they are emerging economies
• Strong and sustainable growth
• BRICS catch up process is fuelled by big increase in productivity when large numbers of people move out of the agricultural sector into manufacturing or services

Question 7

china economic growth

Answer 7

• Strongest growth rates in China, 10% a year for 3 decades
• Rapid growth led by investments and exports, but relies on world being able to buy output (financial crisis)
• Aiming for slower, more sustainable growth by relying more on domestic demand
• Dangerous: big investment projects can fail; significant slowdown could have far reaching and negative consequences for the global economy

Question 8

russia economic growth

Answer 8

• Had many problems: political events and the West’s sanctions or falling oil/gas prices
• Rouble fell in value and little confidence in future trends
• Exports has dropped sharply, affecting countries such as Germany, slowing their growth

Question 9

brazil economic growth

Answer 9

• Relies heavily on selling commodities → iron ore, soya, coffee, sugar
• Falling demand and volatile commodity prices have slowed brazils growth rate
• Progress will depend on developing manufacturing

Question 10

india economic growth

Answer 10

• Undramatic growth → rapid spurt followed by slowing growth
• Expected to improve in the future → election of prime minister, who can bring in structural reforms
• Per capita income is still low in india

Question 11

GDP per capita as an indicator of growth

Answer 11

• GDP divided by the population, measures wealth of country
• Cannot always be helpful: some countries can appear wealthy but have inequality (income comes from natural resources and a small proportion of the population enjoy the benefits)
• GDP stats more accurate if adjusted for differences in costs of living → purchasing power parity

Question 12

human development index as an indicator of growth

Answer 12

• Ranks countries in relaton to several aspecs of development
  income (GDP per capita at PPP) → living standards
• Life expectancy, indicator of populations health
• Years spent in school and years expected to be in school, indicator of population’s level of education
• Also use literacy rates, health indicators (infant mortality rates, incidence of diseases and access to clean water), mobile phone use (can lead to economic development in remote areas)

Question 13

other indicators of growth

Answer 13

• Inequality
• Exchange rates
• Mobile phones → internet access, banking apps
• Level of bureaucracy
• Political stability

Question 14

characteristics of developed countries

Answer 14

• High per capital incomes, literacy levels and life expectancy
• Large service sectors, healthcare and welfare provision
• Tertiary sector 70% of population, secondary sector often capital intensive as wages are high, primary sector is small
• People have some skills and are highly educated
• Advanced technology and infrastructure
• Highly developed capital markets and robust financial institutions

Question 15

characteristics of developing countries

Answer 15

• Low incomes, weak education and welfare systems, abundant cheap labour and relativelty little capital investment
• Large primary sectors, small secondary sector small and low incomes → early statge of industrialisation
• Most econ activity is labour intensive as labour is cheap and capital limited and has to be imported
• Lower standard of living, low levels of healthcare and education and lower HDI

Question 16

emerging economies

Answer 16

• High areas of growth and high levels of disposable income, alongside areas of serious poverty and deprivation
• Rising levels of capital investment and growing, increasingly productive secondary sectors
  International trade growing rapidly
• New lines of production often in collaboration with MNCs
• Features of developing and developed economies: fast economic growth with rapidly rising standards of living; manufacturing grows fastest among all 3 growing sectors
• Investment: production is less labour intensive, but capital less advanced than in developed economies

Question 17

mean and median incomes

Answer 17

• Growing inequality of income may caue mean income to increase while median decreases → median income provides a better measure of how peoples well being has changed over time, not affected by outliers
• Can also use quartiles, quintiles and deciles