Economic Development

Terms DefinitionDevelopment

Gross Domestic Product (GDP)

The total value of goods and services a country produces in a year. It's often given in US dollars ($)

GDP Per Capita GDP divided by the total population

Birth RateThe number of live babies born per thousand of the population per year.

Death RateThe number of deaths per thousand of the population per year

Infant Mortality RateThe number of babies who die under 1 years old, per thousand babies born

People per doctor The average number of people for each doctor.

Literary Rate The percentage of adults who can read and write

Access to Safe WaterThe percentage of people that can get clean drinking water

Life Expectancy The average age a person

Physical Quality-of-Life IndexThis is the number that’s calculated using life expectancy, literacy rate and infant mortality rate

Calorie Intake The average number of calories eaten per day

Human Development Index (HDI)

A number that’s calculated using life expectancy, literacy rate, education level (e.g. degree) and income per head.

Economic Indicators The exchange of goods and services

Social Indicators Social factors such as human rights

More Economically Developed CountryCountries which have a high standard of living and a large GDP

Less Economically Developed CountryCountries with a low standard of living and a much lower GDP.

Brandt Line

Divide of rich countries to the north and poorer countries to the south - the line used to show the divide is called the Brandt line

New Industrialising Countries (NICs)

These are countries that are rapidly greater richer as their economy is moving from being based on primary industry (e.g. agriculture) to secondary industry (manufacturing).

AidIs help given, often from one country to another, usually in the form of money or resources

Bilateral Aid From one country to another

Multilateral AidFrom international organisations which receive money from several countries e.g. World Bank

Emergency or Short-term AidFood or medical help to give short term relieg. Needed after a disaster e.g. 2004 Asian Tsunami

Conditional or Tied Aid

When one country donates money or resources to another but with conditions attached which will often be in the MEDCs favour e.g. aid has to be for buying goods from the donor country.

Charitable AidFunded by donations from the public through organisations such as Oxfam

Development Aid

This is usually a project involving local communities in education and skills for sustainable development, through organisations such as Practical Action

Primary IndustryInvolving collecting raw materials e.g. farming, fishing, mining and forestry.

Secondary IndustryInvolves turning a product into another product (manufacturing) e.g. making textiles, furniture

Tertiary IndustryInvolves providing a service - financial services, nursing, transport

Quaternary Industry

Is high technology - where scientists and researchers investigate and develop new products

Transnational Corporations Companies that operate in several countries

Climate ChangeAny change in the weather of an area over a long period.

Global WarmingThe increase in global temperature over the last century.

Globalisation

Is the process of all the world's systems and cultures becoming more integrated - trade, technology, transport improvements

Multinational Companies (MNCs)

Are companies that produce products, sell products or are located in more than one country e.g. McDonalds, Apple.

Development is…

Development is when a country is improving. When a country develops it basically gets better for the people living there - their quality of life improves (their wealth, health and safety)

The level of development is different in different countries and is hard to measure because it includes many things – ‘Development Indicators’ help to compare the level of development in different countries.

Type Name What it is A measure of..As a country develops it

gets…

Economic

Gross Domestic Product (GDP)

The total value of goods and services a country produces in a year. It's often given in US dollars ($)

Wealth Higher

GDP Per CapitaGDP divided by the total population Wealth Higher

Birth Rate

The number of live babies born per thousand of the population per year.

Female education and availability of birth

controlLower

Death Rate

The number of deaths per thousand of the population per year

Quality of and access of healthcare Lower

Infant Mortality Rate

The number of babies who die under 1 years old, per thousand babies born

Sanitation and healthcare Lower

People per doctorThe average number of people for each doctor.

Access to healthcare Lower

Social

Literary RateThe percentage of adults who can read and write

Access to education Higher

Access to Safe Water

The percentage of people that can get clean drinking water

Sanitation Higher

Life Expectancy The average age a personQuality of and access to

healthcare Higher

Physical Quality-of-Life Index

This is the number that’s calculated using life expectancy, literacy rate and infant mortality rate

Lots of things Higher

Calorie IntakeThe average number of calories eaten per day

Access to a healthy and varied diet Higher

Other

Human Development Index (HDI)

A number that’s calculated using life expectancy, literacy rate, education level (e.g. degree) and income per head.

Lots of things Higher

Development indicators have some disadvantages

- Economic indicators can be inaccurate for countries where trade is informal (not taxed) – therefore does not go through legal processes and measured for GDP

- Social indicators are difficult to measure such as physical quality of life index as that can be subjective, however they give a better indication of quality of life.

- Measurements can be misleading when used on their own.

Categories of development

In the past there was the first world (rich countries), second world (communist countries e.g. Poland) and third world (all other countries). From the 1980s, countries have been classified into two categories based on how economically developed they are:

- Richer countries are classed as More Economically Developed Countries (MEDCs). Generally found in the North but include Australia and New Zealand.

- Poorer countries are classed as Less Economically Developed Countries (LEDCs). Generally found in the South such as India, China, Brazil and all African countries.

Now there are lots of other categories too:

- Most Developed countries: UK, Norway, USA, Canada, France- Newly Industrialised Countries: rapidly getting richer e.g. China, India,

Brazil, Mexico (aka BRICS). - Middle Income Countries: aren’t really poor but they aren’t rich either –

developing quickly e.g. Albania, Bulgaria, Poland- Least Developed Countries: world’s poorest countries with the lowest

quality of life e.g. Ethiopia, Chad, Angola.

Factors that affect how developed a country is…

Aid is…

In international relations, aid (aka international aid, overseas aid, foreign aid or foreign assistance) is a voluntary transfer of resources from one country to

another. Aid may serve one or more functions; it may be given as a diplomatic offering to strength country alliance, to provide infrastructure or resources

needed or to gain commercial access. Humanitarian aid is usually given during a time of need or crisis.

Some types of international aid speed up development

- Bilateral Aid: aid given from one country to another e.g. money, goods or services

- Multilateral Aid: comes from several different countries – often through international agencies such as the World Bank

- Tied Aid: is gifts of money, goods or service that come with conditions attached. E.g. the recipient country may have to agree to spend the money in particular ways or allow companies from the donor country to set up or sell goods in the recipient country (China in Africa).

- Non-governmental Aid – comes from NGOs such as ‘Save the Children’, ‘UNICEF’ and ‘Oxfam’. They provide money and professional support paid for by donations from members of the public across the world.

In order for Aid to be Sustainable, it must help development in ways that does not irreversibly damage the environment or use up resources faster than they can be replaced.

For example: a scheme that would help people switch from earning money by deforestation to earning money in a more environmentally friendly way such as reforestation, forest conservation and rotating the felling of trees.

Industry and Employment Structure

LEDCs

Most of the workforce is employed in primary industry, few people work in secondary industry. Lack funds to invest in technology and there is a lack of educated or skilled workers

NICs

Employment in secondary industry is increasingInfrastructure developing and businesses are moving their factories to LEDCs where labour is cheaperBetter healthcare and living conditions – reduced death rate, increased life expectancy and literacy rate – more people educated and working

MEDCs

Few people work in primary industry because machines replace workers and its cheaper to import primary products from other countries. Fewer people work in secondary industry than in NICs. Most people work in tertiary industry because there’s a skilled and educated workforce and there’s a high demand for services like banks and shopsSome work in quaternary industry because the country has lots of highly skilled labour and money to invest in technology and research facilities.

Industry and economic development are linked. There are four types of industry – primary, secondary, tertiary and quaternary. The employment structure describes what proportion of its workforce is employed in each type

of industry which changes as a country develops.

Locational factors of differing economic activity:

- Climate- Site – relief of the land- Ready built accommodation- Competition- Market – demand vs. supply- Labour – is there a workforce with skills - Capital – money to start the business and/or to develop- Access- Industrial inertia - Universities- Energy

- Water and Electricity supply- Quality of life- Raw materials- Component suppliers- Government influences

Globalisation

Every country has its own political and economic systems as well as its own culture. Globalisation is the process of all the world’s systems and cultures becoming more integrated. Improvements in ICT and transport have increased globalisation by increasing trade and investment globally.

- ICT: e-mail, the internet, mobile phones and phone lines = has made it quicker and easier for businesses all over the world to communicate with each other.

- Transport: airports, high-speed trains and larger ships = quicker and easier for people as well as goods to move around the world. Places are more accessible and fewer places are undiscovered by the masses.

It has allowed businesses to not be located near to their supplies or customers and businesses can target a wider customer base.

Multinational Companies also increase globalisation. MNCs are companies that produce products, sell products or are located in more than one country. They are usually very ealthy companies that employ a lot of people and have a large output (number of products per year). MNCs increase globalisation by linking together countries through the production and sale of goods. Also, they allow the movement of culture to occur e.g. Mcdonalds.

Advantages

Create jobs and increases wealth to an area through employment, taxes and spendingPeople can learn new skillsIndustrialisation - Investment in infrastructure to help business develop e.g. invest in local airports and roadsLocal companies supply the MNCs, therefore increasing their income. Integration of people – sharing culture, memories, viewpoints – become more accepting

Disadvantages

The jobs created aren’t always the best – cheap wages, long hours, unsecure, poor working conditions and regulations Increased pollution (greenhouse gases) and migration of people Development in the area damages natural environment and locals become annoyed with changes as area becomes more developed and multicultural. Profits go back to MNCs country – usually MEDCsLoss of cultural heritage and identity

Global Climate Change

Climate Change is… any change in the weather of an area over a long period.

Global warming is… the increase in global temperature over the last century. Global warming is a type of climate change and also causes other types of climate change such as decreased rainfall in Africa, but increased rainfall in the UK.

An increase in Greenhouse Gases is causing global warming, according to a scientific consensus. Human activities like farming, forestry and

Will affect farming – higher latitudes are experiencing warmer weather increasing crop yields. However it is too hot for crops in lower latitudes. Weather is becoming more extreme – more money spent on predicting extreme weather events and money spent on rebuilding after natural hazards.

Economic Impacts

Sea level rise – increasing temperature causes ice on the land to melt and water in the oceans to expand. Some habitats will be lost as low-lying land is submerged e.g. the Maldives. Rising temperature and decreased rainfall = desertification Distribution of species many change – migration patterns change; kill off species as its too hot/too wet/too dry/ too cold.

Environmental Impacts

Crop yields decreased = malnutrition, ill health and death from starvationMore extreme weather events = increased death rate Hotter weather = increased spread of infectious diseases e.g. malariaHotter/drier areas become uninhabitable Flooded areas become uninhabitable Overcrowding

Social Impacts

Water will become more scarce in some places – lead to political agreements needing to be made = war climate change may cause people to move – increased immigration and emigrationGovernments under pressure to slow climate change or reduce its effects

Political Impacts

manufacturing have increased the concentration of carbon dioxide and methane into the atmosphere.

The Increase of manufacturing across the world has contributed greatly to environmental damage and the amount of greenhouse gases in the atmosphere.

Impacts of Climate Change

How to reduce the impacts of Climate Change

The Kyoto Protocol was a global response. From 1997, most countries in the world agreed to monitor and cut greenhouse gas emissions by signing an international agreement.

- The aim was to reduce global greenhouse gas emissions by 5% below 1990 levels by 2012.

- Carbons trading scheme – if you’re under the carbon target you can receive carbon credits and countries can also earn these by helping poorer countries to reduce their emissions.

There are also national and local responses to climate change:

- National: transport strategies such as improving public transport networks as well as increasing taxes on cars with high emissions.

- Local: congestion charges is a major initiative whereby local authorities charge people for driving cars into cities especially during peak times. Also, local authorities can recycle more waste with more recycling bins and investing in recycling plants.

Sector Currently Available Available by 2030

Energy Supply

Improved supply and distribution efficiency; switching from coal to gas; nuclear power; renewable energy

Carbon capture and storage for fossil fuel generating facilities; advanced nuclear and renewable energy

Transport

Higher fuel efficiency; hybrid vehicles; cleaner diesel vehicles; biofuels; shifts to rail, public transport and bicycles

higher-efficiency biofuels; higher-efficiency aircrafts; more powerful and reliable electric/hybrid vehicle batteries

Industry

Heat and power recovery; recycling and substitution of materials; control of emissions

technological changes in manufacturing of cement, ammonia, iron and aluminium

Agriculture

Management of land to increase carbon stored in the soil; dedicated energy crops to replace fossil fuel use

Improvement of crop yields; reductions in emissions from some agricultural practices

Forests

Increase in forested area; use of forestry products for bioenergy to reduce fossil fuel use

Tree species improvement to increase biomass productivity and therefore carbon capture