Patterns of Economic Development Flashcards
(23 cards)
The economy
describes all the ways in which the people earn a living and how money moves between them
GNI
Gross National Income - the total income earned by the people of a country. If a country increases GNI over time, we say it is experiencing economic development.
Why is GNI not always an accurate measurement of how well-off a country is?
GNI is a narrow measurement of how well-off a country is and doesn’t tell us how money is distributed in a country.
HDI
Human Development Index - a broad measure of how wealthy a country is
Three indicators of human development (+fourth indicator)
- GNI per capita
- Education
- Life expectancy
- Gender Equality
Why was the fourth indicator added to the human development index?
Gender equality was added because countries that treat women more equally tend to be wealthier. Their children tend to have higher levels of literacy and there tends to be a longer life expectancy.
How does HDI rank countries?
-ranks or lists each country according to how well it measures on the first three indicators. The HDI shows a number between 0 and 1. The closer a country’s HDI is to 1 the higher its level of development.
The fourth indicator has a separate measurement called the Gender Development Index.
Patterns of economic development
a term to describe where wealth is distributed on Earth.
How is the world’s wealth distributed?
-Unevenly distributed. Majority concentrated in countries in the northern hemisphere. Countries in the southern hemisphere are underdeveloped and rely on primary activities such as agriculture.
Developed countries
- High levels of industrial activity and most people are employed in manufacturing or services.
- People have larger incomes
- Well- developed health and education systems
- High life expectancy, literacy rates and quality of life
e.g. Ireland, Norway, Japan
Quickly developing countries
- Employment has moved from agriculture to manufacturing and technology
- average income per person is low but increasing
- Education and health are improving
- Standard of living, life expectancy and literacy rates are improving
e.g. BRIC countries - consists of Brazil, Russia, India, China
Slowly developing countries
- Most people are employed in primary activities such as agriculture
- Low levels of industrial activities
- Average income per person is low
- Health and education systems poorly developed
- Life expectancy and literacy rates are low
e.g. Senegal, Sierra Leone, Myanmar
Factors affecting patterns of economic development
- Colonialism
- Unfair Trade
- Debt
- War
- Environment
Colonialism
The practice of taking over a country and ruling it.
Colony and Colonial Power
A colony is a country or region that is taken over and ruled by a colonial power.
How did colonial powers exploit their colonies?
- They took control of the mineral wealth and resources of their colonies.
- They took agricultural land from the native people and forced people to work the land.
- They set up an unfair trading system. Colonies were not allowed to compete with the colonial power and they could only buy goods from them.
Colonial Powers became wealthy, developed countries while colonies remained poor and underdeveloped. This created a wealth gap which still exists today.
Unfair Trade
As a result of colonialism. a system of unfair trade exists today. Raw materials and agricultural goods of colonies were exploited by colonial powers.
Cash crops
Crops that are specifically grown to be sold for cash.
- allowed colonies to pay the taxes placed on them by the colonial power
- colonies became and remain dependent on a narrow range of agricultural goods
How do developed countries benefit from the developing world’s dependence on cash crops?
Cash crops are sold cheaply to the North as unprocessed raw materials.
They cannot be processed in the South due to lack of industry.
Cash crops sold for a low price and their manufactured equivalent can only bought at a higher price. This results in the former colonies being constantly in debt.
The Coffee Trade
- Coffee is the second most traded product in the world today after oil.
- Grown mainly in developing countries along the tropics as the climate is well suited to Coffee Production
- Coffee is grown as a cash crop (sold for money) and millions of small farmers rely on it for an income
- Coffee is exported as a raw material as coffee beans in large sacks. - All processing takes place in the developed world.
- Growers get a poor price for their coffee (8% of total price) while the producers, shippers and retailers make the profits
Protectionism
Where countries of the North protect their markets from cheap finished products from the South.
Countries of the North allow unprocessed goods freely into their markets but charge heavy tariffs on finished products so developing countries can’t compete
MNC’s
protected by the governments with barriers against outside products because the MNC’s create a lot of employment in the country.
Tariff Barriers
Taxes placed on finished products from the south to allow the countries of the north to control the market.
