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Economic Development

Economic Development

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Economic Development

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  1. Economic Development

  2. Levels of development Least developed countries (LDCs) Less economically developed countries (LEDCs) Newly industrialising countries (NICs) North-south divide line- showing the rich and poor. LDCs- These are the poorest countries with the lowest quality of life. LEDCs- These are the least economically developed countries. NICs- these are rapidly getting richer by moving from primary to secondary industry. MICs-These countries are not poor but not rich. MEDCs- These countries are the most economically developed. Middle income countries (MICs) More economically developed countries (MEDCs)

  3. Quality of life Climate Happiness Job security Freedom Housing Food/ water Family/friends Natural hazards (volcanoes) Health Education

  4. Factors affecting development Poor trade links Drinking water Women’s place Economic Social Debt Child education Economy based on primary Limited water supply Unstable government Poor climate Poor soil Environmental Political War Natural hazards Few raw materials Corrupt governments

  5. Measuring development Increase/decrease with development • Social • Birth rate- measures female education and birth control. • Death rate- measures healthcare and quality of life. • Infant mortality- measures sanitation and health care. • People per doctor- measures access to health care. • Literacy rate- measures education. • Access to safe water- measures sanitation. • Life expectancy- measures access to health care and quality of life. • Calorie intake- measures access to healthy diet. • Economic • GDP- Gross domestic product. The total value of goods and services a country produces per year. • GDP per capita- GDP divide by the total population. • Other • Human development index- A number calculated using life expectancy, literacy rate, educational attainment and GDP per capita. • Physical quality of life index- A number calculated using life expectancy, literacy rate and infant mortality rate.

  6. International aid Aid Official governmental aid Voluntary aid Multilateral aid Bilateral aid Long-term Short-term Given by many countries and paid out by an international organisation e.g. UN. Given for constant improvement. To help development. Given to cope with immediate problems caused by disasters. Given from one country to another. • The good….. • Aid which is long term can help development. • Overtime the country can become less reliant on foreign aid. • Aid can help combat poverty. • It can be used to help a boost a countries economy. For example money can be used to set up new industry. • The bad….. • The recipient can become dependent on the aid. • Some aid may not reach the people who need it. • Some aid only lasts a short time- will not help development. • Some aid can be tied. • The benefits of aid can take a long time.

  7. A sustainable aid project Wateraid - Mali WaterAid is an international NGO (non-governmental organisation /charity) that focuses on the provision of safe domestic water, sanitation and hygiene education to the world's poorest people.. WaterAid's vision is of a world where everyone has access to safe domestic water and effective sanitation. In Mali, current national figures indicate that only 50% of the people have access to clean drinking water and only 4% of the population have access to adequate sanitation facilities (toilets). Women spend much of their time searching for water. Children also spend precious school hours looking for water at the expense of their education Wateraid works with local people & organisations, as they best know the local people. Mali’s environment is harsh and deteriorating. Rainfall levels are already low and falling further. Poor sanitation means bad health. Bacteria, viruses and parasites found in human waste are responsible for the transmission of cholera, typhoid and other infectious diseases that kill millions of people each year. The problem is huge in both urban and rural areas Wateraid integrate water, sanitation & hygiene projects 65% of the country is desert or semi-desert In Mali, the water industry is privatised but often fails to the provide water to rural and urban aeas. Health has now improved include reducing the deaths from diarrhoea – 65% improvement Education is now improving, money is being invested into the infrastructure Wateraid is first targeting Slums in Mali’s capital, it wants to show the government that projects in slums are easy to set up and sustainable. Wateraid employs local people, who they are training up to maintain the system and raise money to keep it running. Then invest in the community – THIS IS SUSTAINABLE WaterAid started pilot projects in Mali in 2001

  8. Employment structures Secondary industry Primary industry • Economic • Cheap land as farming uses large areas of land. • Good transport routes to export. • Environmental • Lots of raw materials. • A suitable climate. • Good soil. • Economic • Suitable local market. • Government grants given to encourage set up. • Lots of workers. • Good transport routes. • Environmental • Close to raw materials. • Plenty of flat land • A local water supply. Research and development. Quaternary industry Tertiary industry Services • Environmental • Green open spaces for a pleasant environment. • Economic • A suitable local market. • Good transport routes. • Skilled and educated workers. • Economic • Near similar businesses so that information can be shared. • Skilled and educated workers. • Environmental • Green open spaces for a pleasant environment. • Social • Enough local people to support the service. • Social • Nice quality housing nearby to encourage workers to move.

  9. Employment structures and development NIC MEDC LEDC As a country develops they loose their primary industry and begin to industrialise as the country becomes further developed and the land too expensive the secondary industry is moved. Any secondary industry that is left if carried out by machines. Tertiary industry then has enough money to fully develop.

  10. More MNCs are located here than anywhere else in Brazil South East Brazil is the economic CORE region of Brazil, it has primary, secondary, tertiary and quaternary industries. Factors that influence economic activity LEDC - South East Brazil Secondary Industries It is the centre for foreign and national investment in manufacturing. Investment was concentrated her in the 1950s/60s by the Government. Excellent road and rail links here, as well as the most ports and airports. Solid pipeline for oil and gas. Car industry is the major activity – Ford, GM, VW, Fiat and Toyota manufacture here. Other production includes clothing, food , printing and furniture. (Yet decreasing due to competition in AISA) The quality of life and wages are higher than anywhere else in Brazil The periphery is just outside the economic core, where most people live and some industries are located • Primary Industries • What influence the primary industries here? • -Warm temperature • Average rainfall • Rich soils • GREAT FOR FARMING • Coffee, beef, rice, cacao, sugar cane and fruit are grown here • MINING • Large deposits of gold, iron ore, manganese and bauxite make mining very viable here • ENERGY • Oil, gas offshore and hydroelectric power from the large river ensure energy is produced • FOREST/LOGGING • Warm temperatures create the forest • FISHING • -Off the coast many are employed in fishing and supplies food for the locals Tertiary Sao Paulo is the largest financial centre in south America. Most headquarters for Brazil’s banks. Rio de Janerio, Santos, Sao Paulo major cities Quaternary Centre of research and development in public & private sectors. San Jose Dos Campos is the key area. The Aerospace Technical Centre is where space & aviation is developed & tested Map showing Brazil’s regional Human Development Index 50 years upward growth, clear multiplier effect The population is over 72 million and is the largest in Brazil

  11. Factors that influence economic activity LEDC - Kenya Tertiary Strong in the rift valley as there is lots of National Parks and lakes. Primary Lots in the north east. They rear livestock such as cattle. The area is too hot and dry to grow crops but suitable for grazing. Primary Lots in the west. They produce coffee, tea, tobacco and fruits. The area has good soil and rainfall. Tertiary Strong on the coast because of the beaches. Secondary Lots of manufacturers in Nairobi . They produce clothes, food and drink . The area has good transport links and a good labour supply. Secondary There are cement works in the coast. They use the limestone from nearby deposits as a raw material and can then ship it easily.

  12. Global climate change Global warming is the increase in global temperature over the last century. • Social effects • More people will diedue to extreme weather events. • Diseases will spread more quickly due to hotter weather. • Some areas will become uninhabitabledue to becoming too hot and dry. • Economic effects • More money will need to be spent on predicting extreme weather events in order to reduce their impacts as weather events are becoming more extreme. • Industries that helps to reduce the effects of climate change will become bigger and make more money. The greenhouse effect is the natural warming of the earth. • Global warming is caused by the enhancement of the greenhouse effect. • This is done by creating a layer of greenhouse gases which trap the outgoing heat. Greenhouse gases: • Cows (farming)- releasing methane • Cutting down trees (forestry)- releasing carbon dioxide • Cars- creating more carbon dioxide • Industry- creating more carbon dioxide • Environmental effects • Sea levels will rise as increasing temperatures leads to expanding oceans and ice melt. • Rising temperatures and decreased rainfall will turn some areas into desert. • Political effects • Water will become scarce and competition could lead to war. • Governments are under pressure to come up with ways to reduce the effects. Climate change is any change in weather over a long period.

  13. Global climate change responses Global response • Kyoto Protocol • Most countries are part of this world agreement to cut greenhouse gas emissions. • Each country is set a target. • Countries can trade carbon credits- countries meeting their target can sell spare credits to countries who are not. • Countries can earn credits by helping poor countries reducing their emissions. National response • Transport strategies • Governments can improve public transport. For example they can make people want to use them by making them faster and cheaper- reducing the cars on the roads. • Taxation • Governments can increase taxes on cars with high emissions- encouraging people not to drive. Local response • Congestion charging • Local authorities can charge people for driving cars into cities during busy periods. • Recycling • Local authorities can recycle waste material by building recycling plants and giving people recycling bins. • Conserving energy • Local authorities give money and advice to make homes more energy efficient. If people use less energy, less energy is produced which uses carbon dioxide.

  14. Globalisation ‘The increasing interconnectedness of countries economically, socially and culturally’. Err what does that mean…well it just means that we are not more linked with other countries and their cultures. ICT- Improvements in email, internet, mobile phones and phone lines. This means that it is now quicker and easier for businesses to communicate all over the world. Multi-national companies- they sell and produce products all over the world. They therefore increase globalisation by linking countries together through production and sale of goods. Causes Transport- Improvements in airports, trains and larger ships. This has made is quicker and easier for people to communicate face to face. It has allowed businesses to distribute their products all over the world.

  15. Multi-national companies (MNC’s) Economy Their effects on economic development…. Multiplier effect • They create jobs. The workers pay tax which increases the wealth of the area and the local people. • Taxes are used to improve infrastructure. This attracts other MNCs creating even more jobs. • MNCs are often located in LEDCs because of cheap labour, which means that they make a profit. • MNC headquarters and research centres are usually located in MEDCs, because of skilled labour. Jobs Wealth Taxes Their general positive effects……………. Infrastructure • MNC’s create jobs where they are located. This can lead to more jobs through the multiplier effect. • They create some skilled jobs in LEDCs. This encourages more education and training. • Workers can get higher wages and more reliable incomes compared to farming. • MNCs spend money on infrastructure, this helps to develop the country. • Local companies supply the MNCs with their resources therefore increasing their income. Education and training Cheap labour Profits Development …………………………..and the negative The jobs created are not always secure. Local companies struggle. Profits go back to MNCs origin country. Employees may have to work long hours in poor conditions. May be paid lower than MEDCs Large sites create pollution

  16. A Multi-National Company (MNC) Nike Nike s the world's leading supplier of sports footwear and equipment. The company was founded in 1972. The company name comes from the Greek word for 'victory'. Nike does not make any shoes or clothes itself but contracts out to factories in LEDCs. “Nike’s Wealth was built upon the backs of the worlds poor” • The numbers… • Yearly revenue of $19.2 billion (2009). • Products in 140 countries. • Contracts to 700 factories in 45 countries. • Employing 800.000 people in the supply chain. These subcontracted companies then act on their own and re-subcontract their operations in other Asian countries that give low wages and have no employment laws. E.g. Vietnam, The Philippines and Indonesia The average pay at a Nike factory close in Vietnam is $54 a month, 3x higher than other jobs. Children as young as 10 making shoes, clothing and footballs in Pakistan and Cambodia Nike has been accused of using child labor in the production of its soccer balls in Pakistan. In 1998 Nike changed the minimum age requirements to 17 yrs • Negatives of Nike • - Sweatshops • - Child labour. • - Hazardous working conditions • - Below subsistence wages. • Measures taken by Nike, • Code of conduct. • Decommissioning. • Auditing tools and task force. Nike have hired independent auditors to make sure that the company subcontractors are living up to Nike’s code of conduct.

  17. Conflict between economic activity & the environment The Pearl Delta -China The Pearl Delta is in the Republic of China in the low-lying area surrounding the Pearl River estuary where the Pearl River flows into the South China Sea. It is one of the most densely urbanised regions in the world and one of the main hubs of China's economic growth. The Pearl River Delta is notoriously polluted, with sewage and industrial waste. (Treatment facilities are failing to keep up with the growing population). The Pearl River Delta has become the world's workshop and is a major manufacturing base for products such as electronic products (such as watches and clocks), toys, garments and textiles, plastic products, and a range of other goods. Much of the area is frequently covered with a brown smog. This has a strong effect on the pollution levels in the delta. In October 2009, Greenpeace released a report, "Poisoning the Pearl River" that detailed the results of a study it conducted. All samples they took contained hazardous properties including heavy metals such as beryllium, copper and manganese. These substances are associated with a long list of health problems such as cancer, endocrine disruption, renal failure and damage to the nervous system as well being known to harm the environment. Nearly five percent of the world's goods were produced in the Greater Pearl River Delta in 2001. Over 70,000 Hong Kong companies have plants there. The industries in the delta make over US$448 billion a year In 2007, the World Bank approved a $96 million loan to the Chinese government to reduce water pollution in the Pearl River Delta. 7.1 billion was spent on the river by mid 2010 to clean up the river's sewage problems. The city will build about 30 water treatment plants, which will treat 2.25 million tonnes of water per day. The program hopes to cut down the amount of sewage in the area by 85%, Pollution is a great risks to the Chinese White Dolphins that inhabit the area.

  18. Impacts of globalisation Economic • MEDC • Globalisation has caused industry to move out of MEDCs because labour is cheaper. • MEDCs have developed their tertiary and quaternary industries- increasing the gap between the rich and the poor. • LEDCs and NICs • Globalisation has caused industry to move to these countries • MNCs create jobs which has brought wealth to some people- which increases the gap between the rich and the poor. Social Environmental • Improve peoples quality of life especially in LEDCs. • Increased trade brings in more money and jobs. • Loss of culture. • Expose to other cultures. • Carbon emissions- transporting goods around the world, increases global warming. • Waste-people have access to more products. • Deforestation- cleared forests to make way for crops. • Oil pollution- products being transported by ship.