economic Flashcards
(21 cards)
Causes of uneven development:
PHYSICAL CAUSES:
* Natural hazards - natural hazards create difficult conditions for
economic development e.g. the Haiti earthquake of 2010
caused the country’s GDP to shrink by 5%.
* Landlocked countries - with a few exceptions, the world’s 45
landlocked countries are LICs or NEEs. Of the 15 lowest-ranked
HDI countries, 8 have no coastline.
ECONOMIC CAUSES:
* Food prices - food prices fluctuate wildly depending on
competition e.g. the price of cocoa beans halved in the 1990s
due to overproduction, slowing growth in Ghana & Ivory Coast.
* Terms of trade - international organisations like the World
Trade Organisation have been criticised for not doing enough
to establish fair terms of trade for food and raw materials.
HISTORICAL CAUSES:
* Colonialism - many LICs were colonised by powerful trading
nations from Europe and exploited for their raw materials, with
10 million people exported from Africa to North America.
* Conflict - conflict can arrest a country’s social development e.g.
since the conflict in Syria began in 2012, 50% of children live in
refugee camps and 90% no longer receive an education
Investment Countries, organisations and TNCs invest in LICs and NEEs to increase profits. Investments lead to improvements in
infrastructure (e.g. airport construction) and services (e.g. electricity). Over 2,000 Chinese companies have invested in
Africa e.g. the Chinese company CRCC won a $12bn contract to build a new 1,400 km railway along the coast of Nigeria.
Industrial development
Industrial development provides employment, increases individual wealth and results in improvements in education,
health care and service provision. Industrialisation has promoted development in countries such as Brazil, Mexico and
Malaysia e.g. Proton cars. Tourism can also create employment opportunities and raises incomes.
Aid Aid often takes the form of financial support offered by countries, international organisations (such as the EU) and
charities. Short-term emergency aid is given in response to natural disaster. Long-term aid supports development
projects such as improving water supply, sanitation and energy provision e.g. UK gave Pakistan £338 million of aid in 2013.
Intermediate technology
Intermediate technology is appropriate in many countries for supporting local development projects involved with
farming, water and health. The ‘magic stones’ promoted by Oxfam in Burkina Faso managed to increase crops yields by
50% in the first year, whilst the stock of trees grown on the restored farmland increase from 25% to 50%.
Fairtrade :Fairtrade is an organisation that promotes fair wages for farmers in LICs. The international organisation guarantees the
farmer a fair price and invests money in local community projects e.g. in eastern Uganda, over 90& of smaller coffee
farmers have joined Fairtrade, processing their own beans to increase the export value of the crop.
Debt relief Many countries borrowed money in the 1970/80s to invest in development projects e.g. dam building. Some countries
have fallen into serious debts, unable to pay back the loans or pay the high rates of interest. In 2006, the International
Monetary Fund (IMF) agreed to cancel the debts of 19 of the world’s poorest countries»_space;> invest instead in education.
Microfinance loans
Small-scale financial support helps individuals or community groups to start small businesses e.g. the Garmeen Bank in
Bangladesh lends money (US$200) to women to buy a mobile phone so that they can check market prices when selling
agricultural produce. The bank has so far lent over US$11 billion to 7 million members.
Reasons for visiting Barbados
The coast is almost encircled with
coral reefs.
* Tropical climate - temperatures range
from 21-30oC.
* Mount Gay rum visitor’s centre, then
relax on Miami Beach.
* Enjoy a traditional meal at Oistins
Fish Fry restaurant.
* Explore Harrison’s Cave, a 3km long
network of coral caves
How tourism helps to reduce the development gap Barbados
- The total contribution of travel and tourism to GDP was BBD
3.6bn (Barbados Dollars), which equates to 40% of total GDP. - The total contribution of travel and tourism to employment,
including jobs indirectly supported by the industry, was 40% of
total employment (51,000 jobs). - Increased incomes have benefited the retail sector and increased
the amount of money circulating in the economy. - The revenue created by these thriving businesses in Barbados
has meant extra tax being paid to the national government. This
extra taxation has been invested in new infrastructure has been
improved to support tourism e.g. new roads and hotels. - Extra government money has also been invested in schools and
colleges which has helped reduced the literacy gap compared to
countries like the USA and Canada. - Barbados is the highest ranked Caribbean country in the UN’s
Human Development Report for 2016. Barbados was ranked at
38 out of 187 countries with an overall rating of 0.825. The
Human Development Index (HDI) is a composite measure of 3
basic aspects of human development: health, education and
income. Barbados remains well above the regional average for
Latin America and the Caribbean, and is the only Caribbean
country listed in the high human development category
Regional importance of Nigeria
Nigeria has the highest gross national
product (GNP) in Africa.
* Nigeria has the 3rd largest manufacturing
sector in Africa and the largest population.
* Nigeria has the highest farm output in Africa.
It also has the highest number of cattle.
Global importance of Nigeria
Nigeria is the world’s 21st largest economy
and has experienced a rapid growth in gross
domestic product (value of goods & services).
* Nigeria is ranked 7th in the world by size of
population.
* Nigeria is the world’s 12th largest oil producer.
* Lagos is a thriving ‘world city’ with a strong
economic and financial base.
How is Nigeria’s industrial structure changing?
Nigeria’s economy used to be dominated by the
agricultural sector. Rapid industrialisation means
that over 50% of the country’s GDP now comes from
manufacturing (7%) and services (52%).
* Employment in agriculture has fallen, partly due to
increased mechanisation & rural-to-urban migration.
* Increased political stability & investment from TNCs
have led to a rapid rise in manufacturing. It’s
Nigeria’s fastest-growing sector due to a large, cheap
labour force & a huge market.
* Along with industrialisation, there has been a huge
growth in the service sector e.g. finance, retail and
communications.
How can manufacturing stimulate economic growth?
Manufacturing industries often encourage the
establishment & growth of linked industries by
supplying materials & components to each other.
* Increased employment opportunities & higher
wages increase consumer demand, which in turn
increases the market, and leads to further growth
and investment»_space;> multiplier effect.
* Increased employment results in higher taxes,
which the government can use to expand the
economy further and improve social conditions.
* A thriving manufacturing sector attracts foreign
investment into Nigeria.
* Manufacturing stimulates growth of the service
sector - finance, retailing & communications -
leading to overall economic growth.
ADVANTAGES of TNCs
Oil & gad has created employment for 65,000
Nigerian workers + 250,000 related jobs.
Local companies may benefit by supplying the
TNCs e.g. 91% of Shell contracts go to Nigerian
companies.
The Nigerian government benefits from export
taxes paid by TNCS, providing money that can be
spent on improving education, health care &
services»_space;> closing the development gap on HICs.
DISADVANTAGES of TNCs
Tankers transport the oil to Europe & the USA
where it is refined into petroleum products. The
TNCS make most their profits from refined oil.
There have been many oil spills in the fragile Niger
Delta, causing water pollution & damaging fishing.
Oil flares & toxic fumes have increase air pollution.
Militant groups can be violent, causing social
unrest in the area which has led to theft of oil,
sabotage & violent crime.
aid nigeria
Despite huge economic growth, poverty remains common in Niger e.g. 100 million people live on less than
$1 a day. Infant mortality rates are high and life expectancy low, especially in parts of northeast Nigeria.
* Aid involves the provision of support for people. It can take the form of emergency aid (e.g. food, shelter)
following a natural disaster, or long-term development aid, aimed to improve people’s quality of life
(e.g. health clinics, water supply & schools.
Impacts of aid
Nigeria receives about 4% of the total aid given to African
countries. Aid comes from organisations such as the World Bank,
the EU, UNICEF, and individual countries like the UK. The total
amount of aid to Nigeria is about US$5 billion per year.
* Between 2009 to 2013, 60 million mosquito nets were distributed
by the organisation ‘Nets for Life’ funded by the World Bank.
However, 100 million malaria cases in Nigeria still + 300,000
deaths last year
* The UK gives £300 million a year of aid to Nigeria to invest in
projects such as satellites that will help improve food production
by predicting weather patterns. However, Hunger rates have
increased from 7% (2013) to 11% (2016) especially in Northern
Nigeria where investment into infrastructure and irrigation is low.
* Despite good intentions, some aid money fails to get to people
who need it due to corruption.
The environmental impacts of economic development
MINERAL & OIL EXTRACTION:
* This has resulted in serious incidents of pollution, particularly
involving oil spills and fires in the Niger Delta, causing damage
to aquatic ecosystems & toxic fumes being released into the air.
* In 2008/9, two massive oil spills devastated 20km2 of natural
swamps close to the town of Bodo in the Niger Delta. In 2015
Shell agreed to pay compensation and to clean up the area.
INDUSTRIAL DEVELOPMENT:
* In the major cities of Lagos and Kano, toxic chemicals are
discharged into drains & open sewers, posing dangers to human
health & natural ecosystems.
* Deforestation is a major issue. Up to 80% of Nigeria’s forests
have been destroyed. Burning releases carbon dioxide into the
atmosphere and forest removal results in serious soil erosion.
URBAN GROWTH:
* The rapid growth & outward sprawl of urban centres such as
Lagos have had a significant impact on the environment. Large
areas of countryside have been lost to industry or shanty towns.
* The lack of sanitation and inadequate waste disposal cause land
& water pollution e.g. the local government in Lagos collects
only 40% of the 10,000 tonnes of waste produced every day.
DEINDUSTRIALISATION
Deindustrialisation involved the decline in the UK’s traditional heavy industries. These
industries were often based close to raw materials (such as coal to manufacture iron) in
places such as South Wales and northeast England, who relied heavily on manufacturing.
* The decline of manufacturing & closure of coal mines from about the 1970s left a legacy
of unemployment, low incomes & environmental dereliction in these regions.
Manufacturing declined from about 55% of total employment (1900) to just 15% (2006).
GLOBALISATION:
Globalisation is the way businesses, ideas & lifestyles spread rapidly around the world.
The global economic landscape has been transformed by the growth of TNCs and the
rapid economic growth experienced in Asia.
* Many of the goods we now buy are cheaper because they are produced in countries
where people earn lower wages than we do. More imports of manufactured goods,
especially from China = fewer goods are produced in the UK = factories close & jobs lost.
GOVERNMENT POLICIES
The government has an important role in shaping the UK’s economy.
* 1979-2010: state-run industries were privatised, many heavy industries closed down and
jobs were lost. Government & private investment transformed former industrial areas like
the London Docklands into financial centres such as Canary Wharf.
* 2010 onwards: the government has tried to rebalance the economy by encouraging
investment in the high-tech manufacturing sectors e.g. aerospace & computer engineering.
Moving towards a post-industrial economy
In the UK, over 1.3 million
people work in the IT sector
as UK is recognised as one
of the best in the world.
EXPLANATION:
Since the decline of manufacturing in the 1970s, the
UK has moved towards a post-industrial economy. For
example, the internet and use of computers enables
people to work from home and to be self-employed
UK financial sector employs
over 2 million people and
contributes about 10% to
the country’s GDP per year.
EXPLANATION:
Services industries provide support rather than making
products. The service industry is by far the largest
sector in the UK, both in terms of employment and
economic output, with the City of London at the core.
KEY FACT:
The R&D sector employs
60,000 people and
contributes £3 billion to the
UK economy.
EXPLANATION:
Research & development is part of the UK’s rapidly
growing quaternary sector. Much research is linked to
UK universities such as Oxford & Cambridge, as well as
government bodies (NHS) and pharmaceuticals (GSK).
KEY FACT:
Over 1,500 IT and biotech
companies are based in
Cambridge. The Science
Park opened in 1970.
EXPLANATION:
The Science Park enjoys excellent access to the A14
(Midlands) & M11 (London). Many businesses employ
graduates from Cambridge University. Few traditional
industries compete for space, so rents are lower.
how Nissan has made industrial development more environmentally sustainable
Nissan employs 7,000 people in its car plant at Sunderland.
Opened in 1986, it produces over 500,000 cars a year.
Use of renewable energy
The car plant currently has 10 onsite wind turbines, producing
10% of the energy required. This saves the plant the 3,000
tonnes of CO2 from not burning fossils to generate energy.
Reduction in air pollution
Nissan is committed to reducing its use of volatile organic
compounds (VOCs) by switching to water-based spray paints.#
Water use management
Nissan thoroughly processes wastewater and reuses water
within its operations, reducing wate use by 2.1% by 2014.
Preventing soil & groundwater pollution
Nissan conducts regular tests of groundwater via regular
boring surveys, the results of which are reported to the local
government.
Effective use of resources
Nissan has reduced the waste generated during the
manufacturing process by 26% to 2.6kg per vehicle in 2014.
: Improvements and new developments in road and rail infrastructure, port and airport capacity
Roads With over 35 million vehicles on the roads, (a number
growing every year), congestion is getting worse on
the major motorways and ‘A’ roads.
Aa 32 mile stretch of the M4 motorway between London and
South Wales will be widened to have four lanes and will be
turned into a ‘smart motorway’. A ‘smart motorway’ uses a
range of technologies including electronic signs to vary
speed limits in order to reduce congestion.
Railways If the railways can be improved then there will be a
knock-on effect to reduce road congestion and help to
stimulate economic growth.
The ‘Crossrail’ development in London. 32km of new railway
lines running East-West across London, with each new train
carrying 1500 passengers on the ‘Elizabeth Line’. Drastically
reduced commuting time will promote using this rather than
attempting the same journey by car.
Ports Importing/exporting bulky products by air is too
expensive, yet as an island the UK needs to trade
across the seas.
A new development called ‘London Gateway’ on the Thames
Estuary, big enough to accommodate the largest container
ships yet near enough to London to reduce travel time and
carbon emissions.
Airports London needs to stay competitive as a ‘world city’
with major cities such as New York and Paris, (which
have greater airport capacity) and Heathrow airport is
already operating at maximum capacity.
Heathrow expansion. A third runway is planned to open in
2030, allowing a greater number of flights and boosting the
UK economy by £200 billion.
The North-South divide and strategies used in an attempt to resolve regional differences
When complete, the spine of HS2, the new high speed
track, will be shaped like a letter “Y” with London at
the base, Birmingham at the split, Leeds at top right,
and Manchester top left.
Key statistics
Trains will travel at up to 250 mph.
Total cost could exceed £106 billion.
How does it help resolve the North-South divide?
HS2 is estimated to generate £40 billion for the UK
economy, most of which will be in the North. It will
create 40,000 jobs, split between the Midlands and
northern England. The reduction in travel times
between the North & South will encourage investors to
take the North more seriously in the future.
Northern Powerhouse partnership
Description
In 2015 the UK government launched the ‘Northern
Powerhouse’ partnership, encouraging industrial land
and infrastructural development in northern England.
Key statistics
Plan to add £100 billion to the region’s economy.
Create an additional 850,000 jobs in the region.
How does it help resolve the North-South divide?
The aim is to spread economic growth more evenly
across the UK to cities such as Leeds, Sheffield and
Manchester. Building a Northern Powerhouse is about
boosting the local economy by investing in skills,
innovation, transport & culture, as well as devolving
powers & budgets to directly elected mayors to ensure
decisions in the North are made by the North.
The place of the UK in the wider world.
UK’s links with the European Union
* The UK joined the EU in 1973 and is set to leave at
the end of 2020.
* Whilst a member, the UK had access to a ‘free
market’ whereby goods, services, capital & labour
could move freely between countries.
* Europeans funds, such as the European Structural
Fund, support regional development projects such
as the redevelopment of Cardiff Bay in Wales.
* Hundreds of thousands of people from the poorer
countries of Eastern Europe have entered the UK in
search of higher wages. Many work in factories &
agriculture, wiling to work long hours for low pay.
* The Single Payment Scheme supports UK farmers,
and benefits wildlife and the environment. In 2015
£18 million was used to support dairy famers in
England & Wales.
* Many EU laws & regulations affect working
practices, product standards, safety, consumer
rights and environmental guidelines. Some of
these regulations can be seen as restrictive.
* The UK pays a consider amount of money into the
EU budget, a gross contribution of £20bn a year.
UK’s links with the Commonwealth
* The UK maintains strong political & economic links
with its former colonies through the
Commonwealth, a voluntary organisation made up
of over 50 countries.
* The aims of the Commonwealth are to provide
support to individual countries and encourage
co-operation between countries, all of which have
a historic link.
* The heads of each country meet every 2 years to
discuss issues of concern and work together to
promote sustainable development.
* Many people of British descent now live in
Commonwealth countries such as Canada, New
Zealand & Australia. People have also migrated to
the UK from Commonwealth countries such as
India, Bangladesh, Nigeria & the Caribbean.
* This movement has established strong cultural
links between the Commonwealth countries and
has also encouraged trade & business links.
* There are important cultural & sporting links
between the countries e.g. the Commonwealth
Games is one of the world’s major sporting events.
