Factors Encouraging Growth

And Debt

Firstly a step back

• Can you name all nine types of aid?• What is invisible trade?• Do you understand the term cumulative

causation?• Name two NIC’s and 2 RIC’s? and tell

what the difference is?• Can you name 3 trade blocs?

Nine types of AID

• Bilateral• Multilateral• Food Aid• Disaster Relief• Aid and trade provision• Debt relief• Programme aid• Project aid• Tied aid

Invisible Trade

• Import and export of services including such items as banking, insurance and tourism

cumulative causation

• A model that explains why wealth becomes concentrated in certain places and not in others

two NIC’s and 2 RIC’s

• NIC• South Korea• Taiwan• Brazil

• RIC• Thailand• Chile• India• China

3 Trade Blocs

• OPEC – Organisation of Petroleum Exporting Countries

• EU – European Union• NAFTA – N. American Free Trade

Agreement• APEC – Asian Pacific Economic Co-

operation

Debt

• LEDC’s often get into enormous debt• Owe money to World Bank and the

IMF investments have failed and left them with huge sums to repay

• 1997 total debt owed by South to North = £1.5 trillion

• Each day £475 million is repaid just to service the debt

• Every new born child owes £300• Aid given is often dwarfed by debt

owed

LDCs most dependent on foreign aid LDCs most dependent on foreign aid (As a percentage of GDP, 2006) (As a percentage of GDP, 2006)

Factors Encouraging Aid

Globalisation is a complex process• Organisation• Production• Services• Tourism

1700 – 2 yrs to navigate the globe in 3 mast ships

1930’s - 8 days to navigate the globe, propeller aircraft 1990’s – 31 hrs

in Concorde

• 200 AD first sailing ship• 1500 – 1700 Industrial canals and stagecoach

routes• 1800 – first steam ship (Crosses Atlantic in 29

days)• 1866 – Telegraph wires laid across the Atlantic• 1900’s – early Ford Motor car company 1903 /

first TV 1926 / first commercial flight 1928• Late 1900’s – first mobile phones – 1980’s /

Internet 1989 onwards.

Globalisation is a complex process• Organisation• Production• Services• Tourism

• The growth in telecommunications has aided businesses with instantaneous communication

• Broadband has allowed the quick movements of data around the world in seconds

• Air Travel pioneer cheap travel for all and movement of large amounts of people quickly

• GIS and GPS help to transmit data around the world on locations and pinpoint cargo’s

• Cluster – Geographical concentrations of similar businesses

• Cumulative Causation – Wealth becoming concentrated in one area. Globalisation increases this as local people can find markets for their products

• Global Hub – A settlement that has a global influence e.g. Megacities.

• Multiplier Effect – Positive spin offs from an initial investment

• Technopole – Cluster of technology lead businesses

• Trickle Down – Positive impacts on the peripheral regions e.g. improved infrastructure.

• Export Processing Zone – Small industrial area usually on the coast that attracts TNC’s due to tax exemptions or over incentives