Economic Development

Economic Development

1. Development

   • The use of resources and the application of available technology to improve the standard of living within a country.
     • Sustainable development = Development that meets the needs of the present without harming the ability of future generations to meet their own needs
   • Wealth
     • This relates directly to money, or economic well-being.
       • Can be divided into rich and poor, individual unlike development.
     • How much money a person has or the value of their possesisons.
       • Measured by GDP (gross domestic product) total of value of goods and services provided by a country in a year.
         • Other organisations publish this data as PPP (purchasing power parity)
   • Measured in HDI (human development index
     • A measure of quality of life combining: education, health and wealth.
     • Norway has the highest of 956, while Sierra leone has the lowest at 273.
   • Quality of life = the factors that affect a person's well-being and happiness
     • This was measured by the PQLI (physical quality of life index)
       • Was the average of three development factors:
         • Literacy
         • Life expectancy
         • Infant mortality
       • Now measured by HDI, this too includes three factors:
         • Life Expectancy
         • GDP per capita
         • Educational attainment
   • Different stages of Development:
     • The North-South divide, this is basically the world split into the hemispheres. No longer accurate due to changes and doesn't show any development or include NICs.
       • Rostow's model:
         • 1. Traditional society 2. Pre-conditions for take-off 3. Take-off (manufacturing) 4. Drive to maturity 5. High mass consumption.
     • LDCS - Poorest of the developing countries with major economic, institutional, and human resource problems
       • 49 countries
       • 10.5% of the world's population
     • NICS (newly industrialised countries) - Started with South Korea, Singapore, Hong Kong and Taiwan, refered to as the 'Four Asian tigers'
       • 'Tiger economy' = Grows very rapidly
       • Reasons for this include: A good level of infrastructure, skilled but low-cost work force, Culture which encourages education, Foreign investment, Advantages geographically Encourage banks to give low interest rates on loans
     • Development Gap
       • There are three main factors that affect this:
         • Physical geography
           • Landlocked countries developed slower
           • Islands develop slower
           • tropical countries develop slower due to hot climates for crops.
           • Natural resources
         • Economic policies
           • welcome and encourage foreign investment develop faster
           • high rates of saving and low rates of spending
         • Demography
           • Low birth rate
   • Aid
     • Foreign exchange gap, savings gap and technical gap
     • International aid = the giving of resources by one country to another poorer country with the objective to improve the economy.
       • Official Gov. aid = Amount is decided by the Gov of an individual country.
         • Bilateral = Given directly from one country to another, often tied with commericial deals.
         • Multilateral = Provided by many countries and organised internationally, e.g. UN
       • Voluntary aid = Run by non-Gov organisations but some Gov goes here too due to their expertise.
         • Long-term = Directed towards continuous imporvement.
         • Short-term = Help cope with unexpected disasters

2. The employment structure

   • Types of employment sectors:
     • Primary sector = Collecting raw materials from the land or sea, for example: fishing or quarrying
     • Secondary sector = Manufacturing the raw materials into a product, for example: food packaging and car production
     • Tertiary sector = Provides a service to people or businesses, for example: retail assistants or nurses
     • Quaternary sector = Using high technology to provide information and expertise, research and development (new sector), for example: computer scientists and biotechnology workers
     • Formal = contracts/taxes/benefits(holiday and sick leave)/security/MEDC
       • Informal = unofficial/part-time/poor job security/paid in cash/no inland revenue/LEDC
         • 5% in UK/ 40% in LEDCS
   • How do employment structures vary?
     • MEDCS = 'Post-industrialised society'/mostly tertiary/increasing quaternary/less manual labour, robotics etc/ manufacturing industries have left to cheaper places (NICS)
     • NICS = Attract MNCS and foreign direct investment/greater investment in agriculture and mechanism/secondary and tertiary increase, primary decrease/vulnerable to market change
       • Foreign direct investment = Overseas investments om physical capital by MNCS
     • LEDCS = Agriculture/subsistence farmers/work is shared, limited amount (underemployed)/primary sector, few secondary and tertiary/primary-product dependent, vulnerable to market change
       • Subsistence farmers = Produce is consumed by the family who made it, surplus is sold or traded
   • Outsourcing = Where a dompany contract out some of its work to another company. this usually happens because a company can save money or if a company lacks skills. For example; India.
     • Back offices = Offices of a company handling communications by telephone, electronice transaction or letter, moved to areas of cheaper labour and land.
     • Global city = Major world city supplying financial, business ad other services to all parts of the world.
   • Factors that influence industrial locations:
     • Physical factors:
       • Site
       • Raw materials
       • Energy
       • Natural routeways and Harbours
       • Climate
     • Human factors:
       • Capital (money)
       • Labour
       • Transport and communications
       • Markets
       • Gov. influence
       • Quality of life

3. Economic activity and the environment

   • Primary and secondary sector
     • Farming = Chemicals damaging soil, reducing fertility and increasing soil erosion/impacts wildlife/slurry from livestock can cause eutrophication in ponds.
     • Mining = Landscape scarring/pollution of groundwater - water supplies/damage buildings with blasts
     • Factories and mechacnisim in areas, large amounts of sulphur dioxide and carbon dioxide and as LEDCS strive to catch up, pollution levels rise
   • Tertiary and quaternary sector
     • Large shopping malls = Indirect/pollution from cars getting there/food miles from the stock
     • Specialist materials used by the quaternary industries have environmental impacts with their process/computers on eclectricty
     • MEDCS introducing legislations to control pollution (environment legislations) and money is spent on research and development on a 'greener industry', fianally relocation to NICS
   • Climate change
     • Causes: