Revision

Richer or Poorer?

Is the NORTH / SOUTH divide still relevant?

Gross National Product (GNP) is the value of everything a country produces, measured in US dollars.

Gross National Product (GNP) is the value of everything a country produces, measured in US dollars.

GNP

However a country’s GNP figure is not an accurate indicator of peoples wealth.

E.g. in 2006 the UK’s GNP was close to China’s, but with a population of over one billion, on average China’s people are actually much worse off.

A better way is to divide each country’s income by it’s population. Gross National Income per capita (per person) is the average income of people in a country, measured in US dollars.

Gross National Income (GNI) is the average income per person in a country, measured in US dollars.

THE TOP 21

THE LOWER MIDDLE

No data

THE BOTTOM

Today, some countries in the South have developed so rapidly that many people’s standard of living is more like Europeans, rather than the poorest in the world.

Even in the 1970’s when this map was developed some countries did not fit the pattern.

Which LEDCs do you think are the richest in terms of GNI

Today the World Bank classifies countries like this:

DEVELOPED DEVELOPING

Problems with using wealth to measure development

It is easier to collect data in wealthy countries so figures may be more accurate than for poor ones.

The data only measures products that are bought and sold. Food grown by farmers is an important part of production in many developing countries, but this will not show up in the figures.

Many people in developing countries work for cash so their work is not recorded.

The figures are only an average for each country and do not tell us about inequality there. A wealthy Indian or Chinese may be far better off than a poor American

US $1 goes much further in some countries than others.

Someone living on $10 a day would be living in poverty in New York, but would be quite comfortably off in some parts of the world.

As well as making people better off, development is also about improving the quality of peoples lives.

Indicators of development must be measurable.

Birth rate

Infant mortality rate

Literacy rate

% employed in primary industry

% access to clean water

No. of people per doctor

Average calorie consumption

% access to secondary education

As countries become wealthier they usually become better developed, and people also become healthier, better educated and live longer.

As well as making people better off, development is also about improving the quality of peoples’ lives.

To measure development just using a country’s income would not give the whole picture.

The United Nations Human Development Index (HDI) is one measure of people’s quality of life.

It gives each country a score based on its people’s average life expectancy, education and level of wealth.

Life expectancy at birth

Education including:

Literacy rate

Years spent in school

Income adjusted for purchasing power (how much it will buy)

Maximum HDI = 1

What type of correlation is this?

It is a negative correlation.The higher the birth rate, the lower the GNI per capita

An anomaly is a figure that does not fit in with the pattern e.g. Romania has a lower birth rate than expected, given its low GNI

GNI per capita and birth rate

1.Why is birth rate an excellent measure of development?

2.Why is death rate a poor indicator of development?

3.Why does GNI on its own give a narrow picture?

4.Why do all indicators of development mask the true picture of development?

5.What can give us a broader picture of development?

Make sure you can answer

these questions

Standard of living Quality of lifev

Standard of living refers to how much money people have. It is measured in GDP per capita. Do they have enough money to pay for the basics of food and housing? Do they fall below an income of $1 a day – the global measure of absolute poverty?

Quality of life is the degree of well-being felt by people and includes factors such a health and happiness. It is based on peoples’ perceptions and is therefore difficult to measure. HDI is an attempt to measure Q of L, based on heath (life expectancy) knowledge (literacy and years spent in school) and standard of living (GDP per capita).

The big idea is...

uneven development

What factors are obstacles to

development?

Environmental factors

Economic factors

Social factors

Political factors

PHYSICAL

FACTORSHUMANFACTORS

1. Environmental factors1. Environmental factors

NATURAL HAZARDSNATURAL HAZARDS

UK in 1976

Drought affects food and water supplies and vegetation. It can be an inconvenience in wealthy countries like the UK, but in the worst affected parts of the world like the Sahel, drought can be a matter of life and death.UK in 1976

Boscastle

Floods may cause severe property damage in developed countries, but most lives are lost in the densely populated lowlands of developing countries. The poorest often live in the places most at risk.Queensland, Australia

Bangladesh

Earthquakes and volcanoes have less of an impact in developed countries because their buildings are built to withstand shocks, and they have better early warning systems for volcanoes.

(Figure rose to 26,000 people)

2oo3

A lahar in Armero, Columbia killed 22,000 people after the eruption of Nevada del Ruiz. Early warnings were ignored.

63 people died in the USA after the eruption of Mt St Helens.Early warning systems meant the area was evacuated.

Hurricane Ivan hit several Caribbean countries before hitting the USA in September 2004

What were the effects on Grenada?

7th September, 2004

Winds 200 km / hr

Category 4 on Saffir-Simpson scale

PRIMARY EFFECTS

• Trees uprooted

• Buildings damaged

• Roads blocked by fallen trees• All schools damaged

• Water, power & telecommunications systems disrupted

SECONDARY EFFECTS

• 37 people died

• Half the population was made homeless

• Health risk due to lack of clean water

• Loss of income

The effects on the development of Grenada

SHORT TERM LONG TERM

People lacked food, clean water and medical care.

Agriculture, tourism and the infrastructure were badly hit, and took a long time to repair

A natural disaster such as a hurricane sets back the development of a country. It can take more than 10 years to catch up what was destroyed by a hurricane. Poor countries lack the funds and insurance cover to help them recover.

2. Social factors

WATER

WATER: the world’s most precious resource

One in three of the world’s population lives in a country already suffering from WATER STRESS, where supplies are limited compared to the population.

Water supplies are unevenly distributed between

countries and within them.

By 2025 global water use is expected to rise by 40%, when the UN expects 2/3 of the world’s population will live in countries with moderate to high water stress.

90% of water is used for agriculture, especially in developing countriesAs populations grow,

fresh water availability is

reduced

Global consumption is growing at twice the rate of population growth as people’s standard of living rises

Unequal access to

clean water

DEVELOPED DEVELOPING

URBAN

RURAL

WOMEN

MEN

Huge amounts of money invested to ensure a plentiful supply of water & reliable sewage treatment

100% access to clean drinking water & sanitation

1.1 billion people without access to improved water.

2.5 billion without safe toilets

Access worse in rural areas.

Big differences in urban areas between the wealthy and those living in shanty towns

72% access to clean water in rural areas

Women and girls waste hours every day collecting water when they could be in school or working to improve their lives.

Better educated & more opportunities as time not wasted collecting water.

Water supply and healthWater supply and health

Illness Reduced ability to work

Low productivity

Poverty

Malnutrition

Healthy people

Work hard onthe land farming

High productivity

Money & crops

Good diet

Clean Water

How clean water canbreak the

cycle of poverty

What type of correlations are these?

Make sure you can explain the link

between the variable on the

graphs

3. Political factors

.... can have devastation impacts on development. They can cause:

Deaths

Displaced people / refugees

The destruction of infrastructure – roads, power supplies and schools, as well as farmland and factories.

Many disputes in LEDCs Europeans drew up boundaries that divided peoples, and threw local people off their land.

E.g.

Rwanda

Kenya

Worldwide deaths directly attributable to war or conflict in 2002

President Mugabe of Zimbabwe

President Assad of Syria

Colonel Gaddafi of Libya

Corrupt politicians enrich themselves illegally at the expense of their country’s development. When this happens, money is not available for education, health services, roads, clean water and sanitation.

In Zimbabwe, highly productive land that was previously owned by large-scale white farmers was taken over by ‘war veterans’.

The country’s economy has been almost completely destroyed and inflation has exceeded 1000%.

In recent years Zimbabwe has been the worlds fastest shrinking economy. It is an extreme example of a government that has failed its people.

Political mismanagement and corruption can slow or reverse development in any part of the world.

Zimbabwe was once one of the most developed countries in Africa. Since the 1990s it has suffered some of the worst setbacks in welfare and human rights as a result of HIV / AIDS and poor government.

International trade is dominated by the developed countries. They have grown wealthy through trade. Some of the wealthiest countries club together to form TRADE BLOCS e.g. the European Union.

There are two big problems with trade:

The pattern of trade

Unfair trade

The pattern of trade is a problem for those countries that depend mainly on PRIMARY PRODUCTS

Primary products tend to be lower in price than manufactured goods. Developing countries tend to export primary products at a lower price, but have to buy in manufactured goods at a higher price, giving them a negative balance of trade or a TRADE DEFICIT.

E.g. iron ore is exported more cheaply than steel is imported.

Prices go up and down on world market and may go so low that producers do not cover their costs.

Prices vary on the world market depending on supply and demand.

Overproduction forces prices down. Prices may go so low that producers do not cover their costs.

It is difficult for the producers to plan ahead e.g. as coffee bushes take several years to grow.

CASE STUDY

Zambia is a former British colony. In the 1960s it was one of the richest countries in Africa. It’s economy was based solely on copper. This is called PRIMARY PRODUCT DEPENDANCY

On gaining independence the government borrowed heavily from the World Bank to buy a 51% share in the copper mines.

BUT the price of copper fell from £1400 per tonne in 1974, to £498 per tonne in 1975. This meant Zambia’s export earning fell dramatically.

Zambia then had to borrow more money to pay the interest on its original loans. It went further and further into debt.

How can unfair trade hold back development?

How is rice growing in Ghana affected by American imports?

Rice farmers in USA are supported by government subsidies which means they grow more than the USA needs.

Some of the surplus is exported to Ghana.

International trade rules say Ghana must allow free access to international rice.

The rice sells for a cheaper price than Ghanaian rice. This puts Ghana’s rice farmers out of business. Ghana now produces only 6% of the rice it produced 20 years ago.

How has Fair Trade helped the banana growers of the Windward islands?

The Windward Islands joined the Fair Trade scheme in 2000. The buyers pay more for Windward Island bananas and the farmers receive and extra $1.75 per box above world market prices. This is a social bonus which helps to raise the standard of living of individual farmers and of the community.

• is a society of cocoa farmers in Ghana operating under the Fair Trade system.

• Individuals receive more money, but a portion is set aside for community developments such as:

A water pump

Clean water

Less illness

A new school

Better education

Better jobs

Nearly one billion people entered the twenty-first century unable to read a book or sign their name

Source: www.globalissues.org/article/26/ poverty-facts-and-stats

One billion people live on less than US$1 a day

The poorest 20% of the world’s population live on 2% of the global income

Source: www.gapminder.org/

Globally, 146 million children are malnourished

Source: World Bank 2007

KEY FACTS ON POVERTY

‘Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life.’

Nelson Mandela

How can global inequalities be reduced?

How can global inequalities be

reduced?

Change the patterns of world trade

Increase Fair Trade

International aid

Abolish debt

The reduction of global inequalities……….

…….. will require international efforts

DEBT – KEY FACTS1970s - many banks lent money to LEDCs to build projects such as roads, airports and HEP plants, so that they could build up their industries , get rich and pay back the loans.

1970s and 1980s - interest rates rose dramatically and the LEDCs were not able to pay back the interest on the loans. Money that should have been spent on health and education was being spent paying back the banks. Countries had to borrow more money to pay off the interest on the original loans.

1990s - the banks got back in debt repayments over 4x what the British government gave out in oversees aid.

DEBT – KEY FACTS2000 - International ‘Drop the Debt’ campaign. Britain cancelled the debts owed to it by the world’s 41 most indebted countries. However the IMF and the World Bank refused to do the same.

2005- ‘Make Poverty History’ campaign targeted the G8 countries at a summit meeting in Scotland.

The three demands of the campaign were:•Trade justice•Drop the debt•More and ‘better’ aid

In what ways could a country such as Ghana develop without the burden of debt?

Without the burden of debt Ghana and other LEDCs could invest in education and health care to help raise the country out of poverty

DEBT FOR CONSERVATION SWAPS

What are conservation swaps?Swaps are agreements whereby a proportion of a country’s debts are written off in exchange for a promise by the debtor country to undertake environmental conservation projects.

These were first set up by environmental groups in the 1980s to reduce the debt problem of poor countries and to promote the conservation of important environments.

Between 1987 and 2001, 50 countries took part.

Usually areas of valuable land are set apart for protection, especially tropical rainforests.

The first swap took place in Bolivia.

A north American conservation group took over $650,000 of Bolivia’s nation debt in return for the Bolivian government setting aside a large area of rainforest as a nature reserve.

Guatemala, Peru, Ecuador and Costa Rica also took part

This frees up more money for investment in education, health, farming, water supplies etc, which will improve the standard of living and opportunities of ordinary people.

Aid comes in different forms ...

• goods such as machinery, food and medical supplies.

• people with special skills such as engineers, teachers and doctors.

• money to buy local goods, invest in development projects or reduce a country’s debt.

• loans for big projects (which have to be repaid).

Money, food, goods and services given at times of dire need

Emergency aid

Edible commodities donated to needy populations

Food aid

Aid that is given by a number of countries and organisations, like the United Nations and the World Health Organisation

Multilateral aid

Foreign aid that must be used in the donor country to buy goods and service from the country giving the aid

Tied aid

Development that meets the needs of the people today without harming the ability of future generations to meet their own needs

Sustainable development

An independent charitable organisation that provides aid

Non-governmental organisation

Aid from one country to another

Bilateral aid

Money collected from the public (and sometimes governments) by non-governmental organisations

Voluntary aid

Aid that provides support for a short time, sometimes when there is an immediate need

Short-term aid

Development projects that are imposed in people from ‘above’

Top-down development

Aid that provides support over a long period of time to make changes that last

Long-term aid

Development projects that start and work from the ‘grass-roots’ level

Bottom-up development

12th January 2010

Emergency aid helps people recover from natural hazards

and conflicts in the SHORT TERM

Development aid aims to improve people’s standard of living and quality of life in the LONG TERM

Most aid agencies prefer to invest in projects like this, working with local partners to identify what is really needed.

If people are involved in the development of their own community it is more likely the changes will be SUSTAINABLE

Voluntary aid comes from charities.

These are non-government organisations (NGOs) which raise money from the public.

They usually work closely with communities, so aid is more effective because it is based on local needs.

Bilateral aid is given by the government of one country to another. Sometimes this aid is used for large-scale developments such as dams, which do not always meet the real development needs of a country.

The Cahora Bassa dam, Mozambique

Often this is TIED AID, as the donor governments specify how the aid is to be used. E.g. they may sell goods or services as part of the deal, so that much of the aid money returns back home.

Many governments give bilateral aid to friendly countries for political reasons, rather than those in greatest need.

But governments are now much more careful to make sure their aid is used to meet the needs of the poor.

The UN sets a target of 0.7% GNI to be spent on aid - but few wealthy countries do so.

Multilateral aid is given by governments to international agencies such as the World Bank, UNESCO and the WHO, which then fund development projects. These agencies are large organisations with lots of money to invest in development, but are sometimes criticisesd for being out of touch with people’s real needs.

The public are more likely to give to emergencies, rather than to help with long term development projects.

Sometimes food or goods sent as emergency aid puts local out of business, making the problem worse in the long term.

Aid can make weaker countries dependent on stronger ones. In the long term countries need to develop their own trade and industries to be self sufficient.

Aid can link the rich world and developing countries, but it may also make some givers feel superior.

Some aid is lost to corrupt governments and individuals.

Lack of infrastructure can prevent development happening as planned, e.g. schools and hospitals cannot operate without roads and power.

The right kind of aid is essential, i.e. at a suitable scale, appropriate to the level of technology and local culture, as well as being sustainable.

AID FROM CANADA TO TANZANIA• Bi-lateral aid • Tied aid

• Top down development

7 large government farms were set up to grow wheat. Canada provided the finance, advice and equipment. Initially this was free, but later they had to pay for it. All spare parts had to be bought from Canada (Tied Aid).

ADVANTAGES: it made Tanzania self sufficient in wheat with a surplus left over to export. This could help raise income to pay off debt of invest in further development. Jobs were created on the farms. New skills were learnt.

DISADVANTAGES: it destroyed the way of life of the local nomadic farmers. Wheat is not traditionally eater by Tanzanians, they grow maize which they grind into flour to make bread. Wheat baked bread is too expensive for most Tanzanians. The scheme had little impact on the ordinary Tanzanians.

Once the Canadians withdrew funding, Tanzania had to pay for spare parts and new machinery from Canada.

AID TO SOMALIA• Bottom up development

• Long term development

• Voluntary Aid

• NGO

After the severe drought in east Africa in the 1980s, many Somali people had left their homes and land and moved to refugee camps where they were supplied with emergency aid by the UNHCR. 10 years later they were still in the camps receiving aid.Action Aid an NGO was called in to help break the dependency on emergency aid. They provided bottom up, long term development aid by teaching farming skills. Initially they taught the poorest women in the camp how to prepare the soil and grow crops. Tools were leant out and returned each night. After the initial success of the women, the men began to take an interest and join in. Action Aid then helped them find land on which they could grow their own crops.This project was an investment in self sufficiency. It is sustainable as the people have skills to provide for themselves. It broke the dependence on emergency aid. It reached the people who needed help most.

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1957

10 new countriesjoined the EU in June 2004.

EstoniaLatviaLithuaniaPolandCzech RepublicSlovakiaHungarySloveniaMaltaCyprus

2 more countries joined in 2006

BulgariaRomania

What contrasts are there within the

EU?

The CORE

The PERIPHERY (edge)

The core region has some of the highest HDI scores in Europe.

WHY?

Biggest population Wealthiest population

Most advanced industries and services

The best communications

Contains the original 6 members of the EU

There is a long history of trade between these countries

The periphery region has some of the lowest HDI scores in Europe.

WHY?

The 10 countries which joined the EU in 2004 were all allies of the USSR until the end of communism in 1989.

Then many of their industries collapsed and there was rising unemployment. People faced hardships with falling living standards and low wages.

Parts of Eastern Europe are also remote and have poor communications.

The periphery of Eastern Europe

A comparison of two countries in the EU

GERMANY

BULGARIA

Factors which have

made Germany

rich

CORE region of Europe

Good communications with the rest of Europe

An original member of the EU so it has strong trading links with other European countries.

Moderate climate with no extremes or drought.

Good agricultural land leading to high level of food production

Plenty of raw materials e.g. coal and iron ore

Well established industries e.g. iron and steel and car manufacturing e.g. Volkswagen

A positive balance of trade (exports are of higher value than imports)

Factors which have made Bulgaria one

of the poorest countries in

Europe

PERIPHERY region of Europe

Isolated. Poor communication links with the rest of Europe.

Few raw materials therefore not a strong base for industry.

Negative balance of trade - imports greater in value than exports

Steep slopes and poor soils in the Rhode Mountains makes farming difficult

Former communist country and member of USSR until the collapse of communism in 1989

With the collapse of communism many state run industries collapsed leading to high unemployment.

Since joining the EU in 2004 many of the most able workers have been migrating west.

How can the EU close the

gap in development?

The Common Agricultural Policy (CAP)

The CAP includes a system of subsides paid to EU farmers. It’s main purposes are to:• guarantee minimum levels of production so that there is enough food for Europe’s population.

• ensure a fair standard of living for farmers.

• ensure reasonable prices to customers.

The CAP guarantees the survival of rural communities, where more than half of EU citizens live.

The Urban II fund

This fund is for SUSTAINABLE DEVELOPMENT in troubled districts of European cities.

It aims to provide economic and social regeneration .

Any successful idea in one city is shared with others to try to improve living conditions as widely as possible.

The EIB’s money comes from the members who own it. They contribute according to their size and wealth.

Its main purpose is to invest in regional development. Some regions are suffering because of the decline of local industry or reduced farm incomes.

Projects are usually locally based and funds are used to train people with new skills and to help set up new businesses

Structural FundsStructural funds support poorer regions of Europe and improve infrastructure, particularly transport because that enables the economy to work more efficiently.

Regions whose GDP per capita is less than 75% of the EU average are targeted. The aim is to accelerate economic development so they catch up with other regions.