Reducing uneven development Flashcards
(34 cards)
Name the four types of aid:
- FDI - foreign direct investment
- Intergovernmental agreeements
- Fair trade
- Remittances
What is foreign direct investment FDI
A top-down approach where companies (TNCs - transnational companies) invest in developing/emerging countries. They set up factories in these countries as well as some services such as call centres for British banks.
For example, Coca Cola who has many factories in India.
What is intergovernmental agreeemnt?
When government work together to provide aid for developing countries.
For example:
The EU invest in one sector of a developing country such as its education sector.
The EU will give money directly to the education sector rather than go through the government. This avoids corrupt politician getting their hands on the money first.
Some emerging countries Eg. Brazil and China are now wealthy enough to help other developing countries.
(China have done this, but they didn’t involve the local people whom it involved the most)
What is fair trade?
A way of buying and selling products that allows the farmers to be paid a fair price for their produce and have better working conditions.
Advantages:
- fair trade has encouraged many farmers to farm in a more sustainable and environmentally friendly way, using fewer chemicals and effective irrigation.
- fair trade products come from over 70 different countries from around the world. The people who produce these items receive a minimum price and premium for their products.
Disadvantages:
-some people have argued that fair trade has a negative effect on the ‘free market’, where products are produced when they are needed and farms can grow in size and grow different crops, as well as use new mechanical equipment if the demand for their product increases.
Fair trade doesn’t always support this as the farmers have to get paid a minimum amount.
What are remittances?
The sending of money to a recipient who lives abroad.
Most families live in slow-growing economies and developing nations rely heavily in these remittances as their main source of income.
Foreign workers who send a portion of their pay to their families back home frequently do this.
Advantages:
- many countries in the world are dependent on the remittance sent by their migrant workers abroad.
- ending poverty and hunger.
- permitting good health, quality education, clean water and sanitation, decent work and economic growth.
Disadvantages:
- reduces labour supply
- created a culture of dependency which inhibits economic growth.
Name the top down and bottom up strategies to reduce uneven development:
Top-down strategies:
- Aid
- FDI through TNCs
- intergovernmental agencies
Bottom up strategies:
- non-governmental organisations (charities, UN)
- Remittances
- local community banks who give loans.
What are top down approaches?
Where richer individuals and larger companies help with development.
The wealth created by them will naturally tickle down and benefit everyone.
Usually the government makes the decisions and is often linked to development through large scale projects such and dams.
What are bottom up approaches?
The aim of bottom up strategies is to lift people out of poverty by helping them directs - helping them to help themselves.
Local involvement in the strategies and decision-making process which includes them saying what they accruals need.
Providing basic support such as sanitation and water supply, improved farming through use of technology, education, healthcare improvements and family planning, access to technologies such as the internet and mobile phones.
This is usually done by NGOs (non-governmental organisations) (charities).
What is an example of foreign direct investment:
Brazil was naked the sixth largest destination for FDI flows in 2019 with inflows of $72 billion.
In recent years, Brazil received more that half of south America’s total income FDI.
Advantages:
- a reliable form of income for people living in rural areas.
Disadvantages:
- TNC can create many jobs, but this is never their main aim.
- TNCs can exploit raw materials and people.
- TNCs tend to care about consequences for the local people such as increased levels of pollution.
Coca Cola in India - Coca Cola provided the area with an increase in available jobs.
The groundwater levels dropped as coca coca used the farmer’s irrigation water supplies.
The groundwater became polluted and contaminated.
What is an example of inter-governmental agreements:
China 3 gorge dam: a government could ask for knee from the world bank (a loan) which is then invested in improving the country’s infrastructure such as building to provide electricity. China have dine this, but they didn’t involve the local people whom it affected the most.
The energy from the dam could be transported 1000+km.
The river could increase shipping transport for trade.
Advantages:
- produced more green energy than any other power plant on earth.
- Can control the amount of flooding
- the river could increase shipping transport for trade.
Disadvantages:
- workers needed to flood 600km2 (13 cities, hundreds of villages amd thousands of archeological sites)
- the construction roughly displaced 1.4 million people.
What is an example of remittances:
The Philippines: 10% of the population live abroad and send money home. In 2019 they sent home $33.5 billion which accounted for 9% of the country’s GDP.
India - $129 billion has been sent home from remittances in 2024, the highest ever for a country in a year.
Pakistan - $31 billion was sent home in 2021, 10% of Pakistan’s GDP.
What is an example of fair trade:
In coffee, fair trade sets a minimum floor price for a pound of coffee beans, which protects farmers when the market dips too low.
Give a bottom-up approach to reduce poverty:
Nepal micro-hydro plant
The UN are helping the people in Nepal
Nepal is land locked and doesn’t have a lot of natural resources, which is hindering their development.
Nepal is mountainous, which is making it difficult for them to connect to the national grid.
However, Nepal has lots of water so they have produced Nepal micro-hydro plants which use gravity from the rivers flowing downwards to turn a turbine to produce electricity.
The local communities are helping build the micro dams.
In the last 30years, 500,000 people have gained access to electricity in Nepal due to the project.
Cost effective - helps to run small-scale cotradge industries, which enable more families to afford education for their children.
How can trade strategies reduce uneven development:
Removing trade barriers can increase trade - for example between China and the EU.
Trade unions such as the EAC (East African community) promote trade between East African nations.
Increased trade with other countries leads to a higher GDP and increased job opportunities.
Trade can be more difficult with landlocked countries such as Zambia, Botswana and Uganda as sea trade is impossible, but is the cheapest form or trade.
How can Fair trade reduce uneven development
Fair trade producers in developing countries work together to deal directly with retailers in developed countries Eg. Sainsbury’s.
Fair trade makes up only 1% of total world trade, meaning many products are still made in unsafe and unfair conditions.
Producers with fair trade receive a better price for their goods, fairer working conditions and investment into local education/healthcare.
Small-scale producers with fair trade form a cooperative which makes it easy to trade with retailers in developed countries - cutting out the ‘middleman’ who would take profit.
How can FDI reduce uneven development:
Costs of FDI include: big brands outselling local products, investors can pull out, lack of regulations means environmental consequences and industrial accents
Benefits of FDI include: higher wages, widens the consumer market by bringing in big brands, brings in investment to an area (improves infrastructure)
How can debt relief reduce uneven development:
Debt relief helps to release some of the countries income to be used to improve the lives of their residents.
Debt is a major problem for the world’s poorest nations and they struggle to make repayments associated with debt.
How can international aid strategies help reduce uneven development:
International aid involves one country voluntarily transferring resources to another - it can be vital income for many lower developed countries and those in emergencies.
International aid can be used to pay for imports (oil, machinery - which are needed for development) support in industry and infrastructure and addresses a shortage of skills needed.
Voluntary aid is arranged by non-governmental organisations and charities such as Oxfam.
What is official governmental aid?
Government provide money for charity organisations to bid for to develop projects in different parts of the world
What is multilateral aid?
Government handover responsibility of aid to international aid agencies such as UNICEF and World Bank. These agencies try and pay more attention to what the country actually needs enabling them to become more developed.
What is bilateral aid?
Aid being given from one government to another. The country receiving the aid may have to purchase goods from the country giving the aid.
Disadvantages: some governments giving the aid often sell very expensive products eg. Tractors which will not necessarily help the country progress. The tractors require expensive fuel, spare parts and can cause unemployment.
What is voluntary aid?
These are charities eg. Oxfam, who collects donations to give to developing countries. Most non-governmental organisations target their aid towards small scale local projects which bring genuine benefit to the people.
What is short term aid?
Always used to deal with emergencies and involves many countries from all over the world giving money to countries which have been affected by natural disasters.
What is long term developmental aid?
It’s purposes to increase a countries level of development for the future and the lot of people to become more self-sufficient.
