EXAMPLES Flashcards
(20 cards)
What is an SAP?
Structural Adjustment Programmes - loans provided by the IMF and the World Bank to countries experiencing economic crisis
What is the CPI?
Who produces it?
Corruption Perception Index - shows how corrupt a country is based on the perceived levels of public sector corruption according to experts and business people
Produced by Transparency international in an aim to shed light on shady deals, weak enforcement of rules and other illicit practises that undermine good governments, ethical businesses and society at large
What is corruption?
the abuse of entrusted power for private gain
What does multilateral mean?
agreed upon/participated in by 3+ parties (country governments etc)
What is G7?
Group of Seven
international intergovernmental economic organisation consisting of the seven IMF-advanced economies in the world
- Canada, France, Germany, Italy, Japan, UK, USA
What is a free market?
economic system with little/no governmental control where consumers and firms decide on what to produce, how much to produce, and how much to charge
- can be unobstructed competition between buyers/sellers
Gov control can include taxing/restricting products e.g. rice into Ghana
Quotas are government-imposed restrictions on the number or amount of a certain good or product being imported into a country.
How do free markets use the government?
they incorporate gov regulation including tariffs to restrict the import of certain goods into the country and subsidies to support certain industries within the country
How does profit and trade relate to processing and manufacturing?
the countries that process the raw materials or manufacture goods make a greater profit than those who provide the raw materials
- started during colonial times when several European countries began to use raw materials found in their colonies to develop their own domestic manufacturing industries
What is the IMF?
What does it do?
The International Monetary Fund
- an international organization of 191 countries working to foster global monetary cooperation, secure financial stability, and promote sustainable economic growth
- it does this by providing policy advice, financial support, and capacity development to member countries, especially those facing economic challenges
What is the World Bank?
an international financial institution that provides loans and grants to developing countries to reduce poverty and support sustainable development
What is resource curse?
When a new material/mineral is found, other countries fight over the rights to exploit and export it, meaning that the original country doesn’t get any profit and instead has resources drained and no investment
Why is managing natural resources difficult?
- exhaustible
- dependant on gov to transform the money from resource into improved standard of living. Reality is that they are wasted or
misappropriated - MNCs are often needed to extract so money goes overseas instead of being locally invested
Give two contrasting examples of oil management
NORWAY = GOOD MANAGEMENT
- created jobs
- created economic supply chain creating more jobs and a higher quality product (refineries, processing plants etc)
NIGERIA = BAD
- exploited by Shell
- theft, corruption, spills
- Goa made uninhabitable
- import cheap, poor quality oil and export theirs cheaply too
Give some detriments of having a lot of a resource, and none of a resource
Give examples
LOTS:
- stifles export of other products: causes inflation of local prices so it is more expensive to buy necessities e.g. rice
- vulnerable to economic downturns and price fluctuations e.g. if oil price declines, Nigeria gets poorer
NONE: (though this can maybe also be seen as a positive)
- economy grown through labour intensive mass production industry e.g. textiles in East Asia
- high number of low/medium paid jobs and the only requirement is a building and some sewing machines
Why are oil and diamonds a bad resource to have? (if managed wrong)
- requires more machines than people e.g. high tech drills operated by a relatively small number of highly skilled people. They get well paid, others in poverty
- governments of mineral rich states find it easy to borrow so they end up with crippling debts
- resources can fund/fuel wars and conflict
Give examples of how resource abundance does not equate to wealth
Nigeria = 10th in world for oil = GDP/capita $2,065 2021
US = 11th in world for oil = GDP/capita $70,248
What is a commodity?
a raw material or primary agricultural product that can be bought and sold, such as copper or coffee
What is human capital?
the skills, knowledge and experience possessed by an individual or population, viewed in terms of their value or cost to an organisation or country
- if you educate and train someone, or a group of people, you are increasing your human capital
a) What is an oligopoly?
b) What are the issues with oligopolies?
c) Give an example of an oligopoly
a) an industry dominated by a few large firms
b) the power of oligopolies in the global economy has forced down prices for basic commodities such as tea, coffee, and cocoa. These commodities are often produced in poorer countries meaning that the often small-scale farmers are penalised by low prices
e.g. UK supermarkets - Tesco, Sainsburys, Aldi etc
e.g. Chocolate - Cadbury’s, Mars, Hershey’s, Galaxy
When and why did the Fair Trade movement start?
90s - NGOs argued free market capitalism was not benefiting the poor in the world
- oligopolies meant that producers in poor countries received very low price for their goods
Fair Trade movement developed with the goal of rebalancing trading relations and giving poor producers a fair price
- started with ‘handicraft goods’ in the 60s but by the 80s had shifted to commodities like coffee, cocoa, sugar and cotton
There is now huge market penetration with major supermarket chains like Tesco and coffee retailers like Starbucks
