Developing Country Flashcards
(7 cards)
Characteristics
Poverty
3/4 of the world’s population have incomes which are considerably lower than those in the developed world
High population growth
Birth and death rates are higher than in the developed world
Agricultural dominance
About 70% of the population live off land. Agriculture is largely at subsistence level
Lack of industrial capital
And hence a lack of investment in factories, offices and machinery
Lack of infrastructure
There is a shortage of social capital eg roads, railways, sewage disposal, schools and electricity
High dependence on one or two exports
These are usually primary products such as food or raw materials eg Madagascar is vanilla
Types of aid given to developing countries
Gifts - of foodstuff for humanitarian reasons
Grants and loans- grants don’t have to be paid back and have no condition on how they are spent because of corruption
Writing off debt- a recent initiative has seen the US and British govt write off debts of certain countries on condition that the money saved is used to relief poverty
Tied aid- grants and loans may be tied on the purchase of equipment from the donor country
Technical assistance and education- technical experts may give technical advice and wealthier nations provide facilities and finance for overseas students to attend universities
Gdp per capita for developing countries in 2007
Niger was $260 GDP per capita
Burundi was $100 GDP per capita
GDP per capita in 2024
Dr congo $744 GDP per capita
Burundi $156 GDP per capita
A developing country
Is one where real per capita income is low compared with that of an industrialised country. These countries are heavily dependent on one or two main exports and do not yet fully integrated health or education systems
Explain measures that could be taken to raise economic growth rates in developing economies
trade liberalisation such as free market supply-side policies - privatisation, deregulation, lower taxes, less regulation to stimulate private sector investment (1)
• capital investment to encourage diversification away from agriculture (1)
• infrastructure spending to improve transport network (1)
• education/training to improve the skills of the future workforce (1)
• increased spending on health/immunisation etc to improve productivity of workforce (1)
• ending of agricultural subsidies in developed world to provide easier access to world markets (1)
FDI brings capital inflows which can help finance a current account deficit (1)
• tackle the high levels of corruption within the economy to create a level playing field to ensure rule of law/property rights to maximise opportunities for growth (1)
Explain why some developing countries have struggled to achieve high rates of economic growth
• some developing countries (such as Chad) face significant challenges in trade as they are landlocked, so they lack territorial access to the sea (1).
As a result, they face high transport and transit costs compared to countries who have open access to the sea (1). The majority of goods produced globally are transported via sea routes, so this gives countries with a coastline a cost advantage, which a landlocked country cannot address (1).
There are also high administrative costs due to transit, associated with border crossings, additional paperwork and bureaucratic procedures (1).
Many developing countries’ economies have a focus on primary industry or agriculture, but it takes longer for landlocked countries to supply the perishable goods to the global market (1). This may result in poorer quality goods being provided to the market (1). This may reduce the attractiveness of potential exports (1). Fewer exports would result in a lack of foreign currency reserves (1).
(1). This could be very difficult if a neighbouring country is experiencing significant economic disruptions caused by political upheaval or civil war
poor human capital
• dependency on primary production
• corruption
• low productivity
• lack of capital/technology
• poverty cycle
• lack of natural resources
• poor infrastructure
• lack of developed banking system
• lack of property rights
• burden of debt
• trade barriers
• higher impact of Covid on export dependant countries
