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Flashcards in Economic Inequality Deck (32):
1

Developed countries

Northern hemisphere.
Australia & New Zealand.
Strong economies.
Well-developed.
Wealthy
Industrialised.
Secondary & Tertiary sectors.
High standard of education.
High-quality infrastructures.

2

Quickly developing countries

Tiger economies
Rapid industrialisation - increased employment in secondary
Focus on exporting goods
Wages increasing
Improvement in standard of living
Brazil, China, Mexico

3

Slowly developing countries

Third world countries
Southern hemisphere
Over-reliant on primary sector
Little manufacturing or services
Famine
War
High birth rate
Sudan, Ethiopia

4

Measuring development

GNP (Gross National Product) capita
Life Expectancy
Adult literacy rate
Years of schooling

5

What is GNP used to find?

Stage of economic development
Rate of economic development

Higher the GNP, more developed the economy

6

Finding the GNP

Total earning in one year / Total population

7

GNP weakness

Measure economic wealth only.
No account of cultural development, health, education, and other social services.
Calculates only average wealth. Ignores fact wealth is often unequally distributed.
Eg. Ireland has high GNP, but more than half of wealth is controlled by 5% of people.

8

Why our world is so unequal

200 years ago people in north & south had similar living standards. Today there is a big difference.

Three main reasons:
Colonialism,
Trade,
Debt and Corruption.

9

Colonialism

European countries colonised many parts.
Means they took over countries, making them colonies.
Often done by force.
Exploited raw materials & mineral wealth.
Stripped countries of natural resources.

10

Examples of colonialism

Spain + Portugal colonised Central & South America.

Britain + France colonised parts of Africa & many parts of Asia.

Germany, Belgium, The Netherlands, and Portugal colonised parts of Africa.

11

Effects of colonialism in Ireland

British exploited Ireland in various ways:

Cleared forests to provide wood during Industrial Revolution.
Exported farm produce at low price.
Took land from Irish during plantations.
No secondary industry, which stopped economy development.

12

Inequality

World is unequal.
Huge social & economic inequalities between places.
Many countries rich, others very poor.
Rich mainly in north, poor mainly in south.
Poor usually called Developing countries, rich usually called Developed countries.

13

Trade

European countries use their colonies to provide them cheap raw materials.

Include unprocessed minerals - bauxite, crude oil, uranium, diamonds.
Also include cash crops, crops frown specifically for export - coffee, tobacco, cotton, cocoa.

Countries in north buy these natural resources cheaply, then process into finished products. Sold at high profit, often to poor countries of south.

MNCa set up in less developed countries due to low paid workers.

14

Effects of trade: Coffee production

Worldwide commodity - raw material bought, sold on world market.

Coffee beans - Uganda, Kenya, Ivory Coast.

Next to oil, most important commodity in world.

Over 12 mil employed in coffee industry.

15

How coffee is grown

Plantations - large areas of land where coffee is grown
Owned by foreign companies - low wages
Local farms - grow coffee as cash crop
Farmer receives cash for crop

16

Exploitation of the countries of the south & trade

Price - large profits go to companies not farmers
Farmers don't get fair price
Protectionism - look after own profits
High taxes on processed coffee (tariff barriers)
Dependency - over-dependency on coffee production
Price fluctuation can damage economies
Difficult to improve infrastructure or invest

17

How coffee is grown

Plantations - large areas of land where coffee is grown
Owned by foreign companies - low wages
Local farms - grow coffee as cash crop
Farmer receives cash for crop

18

Exploitation of the countries of the south & trade

Price - large profits go to companies not farmers
Farmers don't get fair price
Protectionism - look after own profits
High taxes on processed coffee (tariff barriers)
Dependency - over-dependency on coffee production
Price fluctuation can damage economies
Difficult to improve infrastructure or invest

19

Debt and corruption

Development difficult bc of it
Owe foreign banks large loans + interest payments
Healthcare and education suffer
Corrupt leaders take money for personal wealth

20

Life expectancy

Income levels do not tell us everything about quality of life of people in country.

21

Human Suffering Index

Measures quality of life using 10 factors

22

Factors of human suffering index

Life expectancy
Income per person
Daily Caloric Intake (amount of food available)
Level of inflation
Availability of clean water
Civil Rights
Vaccinations of infants
Political freedom
Numbers in secondary school
Communication technology

23

Aid to the South

Aid is given by rich countries to poor countries.

24

Who gives aid?

Individuals
Government

25

Types of aid

Non-governmental
Bilateral
Development
Multilateral
Emegency
Tied

26

Non-governmental aid

Aid given by voluntary groups

Eg in Ireland: Trocaire, Concern, Oxfam

27

Bilateral aid

Aid given by one government to another

Irish government to Kenyan governments

28

Development aid

Long-term aid given to improve roads, water supplies, schools, etc.

29

Multilateral aid

Countries/Governments give money to World Institutions such as United Nations who distribute the aid.

30

Emergency aid

Aid given by countries and agencies to victims of disasters such as drought, earthquakes, etc.

31

Tied aid

Wealthy countries give aid to countries in need, but with strings attached.

32

NGOs (Non Governmental Organisations)

Voluntary organisations

Collect money which they use for many different projects in developing world

Help people to set-up a health clinic or school, make wekls, grow crops, start small companies, irrigate their land