Strategies to reduce the development Gap Flashcards
- Why can very few countries meet their own needs?
Not every country has the climate for natural produce such as: bananas, cocoa or tomatoes, while others lack the raw materials they need for industry such as iron in ore, copper or fossil fuels
What are the consequences of only trading in primary products?
Countries that do this do not always receive a good price for the products. This means that they have insufficient money to import manufactured products from HICs
- Why are development goals harder to achieve in LICs?
Development goals are harder to achieve in LICs since there is a lack of investment in technical equipment such as computers and specialised hospital equipment
- Why does overproduction cause low prices for LICs?
Overproduction causes low prices for LICs as if too many countries grow the same crop it decreases the global prices for that crop
- Why do import taxes cause low prices for LICs?
Import taxes can make imports more expensive than goods manufactured in the home country, causing low prices for LICs
- Why do manufactured goods sell for more money?
Manufactured goods sell for good money because value has been added to the primary products when they are processed to make things
- How did China use industrial development to help the country?
The Chinese government introduces policies that helped turn the country into the ‘workshop of the world’. This included establishing Special Economic Zones (SEZs), where industrial development was encouraged
State the strategies for reducing the development gap
investment,
industrial development
tourism,
aid,
using intermediate technology,
fairtrade,
debt relief,
microfinance loans.
Describe and explain how investment reduces the development gap
Countries, organisations (e.g. the World Bank) and transnational corporations (TNCs) invest in low-income countries (LICs) to increase profits. Investments lead to improvements in:
infrastructure (e.g. road networks and airports)
services (water, sanitation and electricity)
dams and reservoirs (for hydro-electric power)
industrial developments
Example: Chinese companies investing in Africa (mainly energy, mining, construction and manufacturing)
Chinese and Indian Companies are buying companies in HICs. Tata, an Indian company owns the Jaguar Factory in Coventry. This strategy is helping TNCs from NEEs increase their wealth.
Describe and explain how tourism reduces the development gap
Tourism brings in valuable foreign currency and brings a range of improvements including to the infrastructure, healthcare and education. Tourism brings employment opportunities in the service sector and raises incomes.
E.g.
The Maldives opened its first tourist resort in 1972. Since then, tourism has increased significantly. Tourists spend over $200 million per year which means that tourism generates the biggest income for the country.
Describe and explain how industrial development reduces the development gap
Industrial development brings employment opportunities in construction, manufacturing and service industries. This causes a multiplier effect. Increased individual wealth leads to improvements in health, education and service provision through the payment of more taxes
China’s move away from agriculture to manufacturing made it one of the fastest growing economies in the world
E.g.
The Chinese government introduces policies that helped turn the country into the ‘workshop of the world’. This included establishing Special Economic Zones (SEZs), where industrial development was encouraged
Describe and explain how aid reduces the development gap
Aid is usually in the form of financial assistance offered by countries, organisations and TNCs. Long term aid supports development projects such as improving sanitation, water supply and education. Short term aid is often given in response to natural disasters.
E.g.
Economic - In 2014, the DRC was provided with a $73 million grant by international donors to help build a new dam and hydroelectric power station. This has also created many new jobs
Describe and explain how using intermediate technology reduces the development gap
Intermediate technology is the simple, easily learned and maintained technology used in a range of economic activities serving local needs in LICs and NEEs.
Intermediate technology is often used to support local development projects. These are projects usually aimed at improving water supplies, health and agriculture. The development gap is reduced through improvements at the local level.
E.g.
Wateraid provides aid for improved water supplies in poor countries using intermediate technology, such as the Afridev hand pump to help provide clean water.
Describe and explain how fair trade reduces the development gap
Fairtrade involves paying farmers a fair price for their products and investing in local communities. Fair-trade also promotes fair wages for farmers and their workforce.
Part of the end price is invested back into the local community and future development projects
Examples of Fairtrade produce include chocolate, bananas, wire, footballs and jeans. Some people are happy to pay a little more.
Describe and explain how debt relief reduces the development gap
Debt relief involves cancelling money owed, allowing more significant investment in development projects such as road building and health care.
E.g.
In the 1970s and 1980s, many countries borrowed a significant amount of money for large scale development projects. Some of these countries have fallen into considerable debt repaying loans or high rates of interest
The USA wrote of $30 million in debts from Indonesia if they promised to enforce greater protection of its Sumatran Forests where endangered rhinos and tigers live
