What does development mean?
The use of human and natural resources to achieve a higher standard of living.
How can development be measured?
There are number of indicators that can be used and can be normally classified into economic, social or environmental factors.
What economic indicators are there?
- GDP (Gross Domestic Product): the total value of the good and services produced by a country in a year.
- GNI (Gross National Income): like GDP, but also factors in income from oversea
What social indicators are there?
These include things like health, education, population. Things like life expectancy, adult literacy %, infant mortality and access to health care. They tell you about the lives of the people in the country.
What environmental indicators are there?
These can often be harder to quantify. They include indicators such as access to clean water, air pollution and sanitation systems.
Why is it useful to look for such correlation between two indicators?
Using one indicator alone is not wise. GNI does not show the distribution of wealth within a country – i.e. one person might own 99% of the wealth and the rest of the population could be really poor. Such inequality can’t be hidden in social indicators like life expectancy or adult literacy. Therefore, it is best to examine a variety of indicators to gain an accurate picture
How can different parts of the World be classified?
Brandt Line - The Brandt Line is an imaginary division that has provided a rough way of dividing all of the countries in the world in to the rich north and poor south. Many countries in the poor south have become more developed since the 1980s and so many people now think that the Brandt line is no longer useful.
What does the term'standard of living' mean?
Standard of living refers to how much money people have – it is measured as GDP per capita.
What does the term ‘Quality of life’ mean?
Quality of life refers to the general well-being of individuals or societies. Quality of life is a broader measure than ‘standard of living’. It encompasses standard of living (money-GNI), but it also factors in social factors like life expectancy, education and perhaps environmental factors.
How can ‘Quality of life’ be measured?
The UN has used the Human Development Index (HDI) as an indicator of development. It includes:
- Life expectancy
- Educational attainment and average number of years spent in school
- GDP per capita ppp
Will different places have a different perception about quality of life and standard of living?
In Bhutan, culture and the environment are rated more highly than perhaps in the UK. In Kenya, the basics are perhaps more crucial than our priorities like mobile phones etc.
How can people in ‘poor’ countries improve their quality of life?
- Moving from rural areas to urban areas as water, food and jobs are easier to access.
- Improving their environment e.g their houses.
- Communities can improve their services such as schools.
- Fair trade can be considered.
- Becoming part of a trading group.
- Debt abolition which is where a countries debt is cancelled.
- Conservation swaps where some of the countries debt is paid off.
Why are some areas more developed than others?
Environmental - These include things like earthquakes, volcanic eruptions and hurricanes. Poor countries tend to suffer badly from these as they lack the money to prepare and recover from them. CASE STUDY - Earthquake Nepal
Social - 768 million people in the World don’t have access to a reliable water supply (roughly 1 in 10 of the population). A child dies from a water-borne disease every 15 seconds. 12% of the World’s population use 85% of the water
Political - A corrupt government or a communist country mean their potential money is lost as businesses are unlikely to invest in such countries, which could prevent further development.
Economic - For example in some countries money is given to the government but then that money is used in a bad way. Also if countries have many debts to pay off, they are not able to put money toward things in their country, holding back development.
What does the term ‘trade balance’ mean?
Trade balance = the difference between imports and exports.
Why else do countries remain poor?
Coffee and other agricultural products have World prices that fluctuate dramatically; producers (LEDCs) can really struggle when prices are low. Manufactured commodities like TVs have relatively stable prices by comparison (MEDCs) – another example of how trade is stacked in favour of MEDCs.
Is trade fair and how can countries protect themselves from foreign imports?
Rich countries want to keep the balance of trade so they employ protectionist policies to do this.
Tariff: taxes paid on imports. These are added to make them appear more expensive than the domestic competition
Quotas: precise limits on the quantity of goods that can be imported. Beyond these quota levels huge taxes will be added to these imports, making them more expensive.
What are trading groups?
These are where countries group together to increase the amount of trade between them and the value of their trade.
What efforts have been made to reduce the imbalance of World trade?
The World Trade Organisation (WTO) deals with the rules of global trade. It tries to make trade easier and remove any barriers preventing it; it also settles trade disputes.
Producers group together in poor countries to produce food for the fair trade market. Such products have the logo (on the right), which shows consumers that the product is ‘Fairtrade’. The prices tend to be a little higher, but consumers know that they have produced a fair price for their product. They are also paid a ‘fair trade’ premium which is spent on community projects etc. to improve their quality of life.
This is where producers group together and take a share of the profits. By grouping together, they are able to share resources, which enables them to compete on price. For example, the Gumutindo Coffee Co-operative in Uganda has 3000 farmers that have grouped together.
Why are poor countries in debt?
- inbalance of trade
- corrupt government
What is being done to reduce this debt?
In July 2005, the Live 8 concerts (8 around the World) were aimed to try to help the ‘Make Poverty History’ campaign and cancel World debt. A few days later, the G8 (the World’s 8 richest countries) met and an agreement was made to cancel all debts (worth $40 billion) owed by 18 highly indebted Poor Countries (HIPC).The HIPC are a group of the 38 poorest countries. Eventually, $85 billion was cancelled, but $300 billion still remained in Africa.
In order to have their debts cancelled, the countries had to agree to:
- Show that they could manage their finances and were not corrupt
- Agree to spend the money they would have spent on debt repayments on education, healthcare and reducing pover
Other ways debt can be reduced:
An interesting concept called ‘conservation swap’ or ‘debt-for-nature swaps’ tackles debt, but also benefits nature. A country (creditor) which is owed money from another country (debtor), cancels part of the debt in exchange for the debtors country’s agreement to pay for conservation activities. NGO (non-government organisations) like the WWF (World Wide Fund for Nature) often help to arrange the swaps.
Case Study: Debt-for-nature swap in Peru In 2002 and 2008, Peru and the USA agreed to swap debt worth $40 million. Peru agreed to conservation activities to preserve more than 27.5 million acres of endangered rainforest. The forest provides rare habitats for jaguars, pink river dolphins and other are species.
What is aid?
Aid is when a country receives help from another country, or an organisation such as an NGO, to help it to develop and improve people’s lives.
What are the ways aid can be classified?
Short Term Aid - coping with immediate problems eg. natural disasters and sending emergancy food supplies.
Long Term Aid - sustainable aid which can prevent things from happening in the first place e.g building schools and hospitals.
- decisions about development projects made by large governments
- development projects are large scale
- project involves huge sums of money
- outside experts help to plan developments
- local people have no direct involvement
- experts work with local people
- much of the work done by NGOs e.g FARM AFRICA
- local people have control over improving their lives
- technical experts help with projects
How can aid lead to sustainable development?
Case Study: FARM-Africa and the Moyale Pastoralist Project. Helps by reducing their dependence on their animals for all of their income. The project is:
- Helping communities to form Local Development Committees (LDC) – which finds problems and solutions – e.g. improving access to markets, so that farmers can sell their produce more easily.
- Helping families to adapt the way they manage crops, animals and forests to improve their sustainability – e.g. avoiding deforestation, which destroys the soils.
- Provide small-scale loans to set up alternative business, such as small shops.
- Training people to identify clean, safe water sources and to dig well
Trade or Aid?
We are very good at providing aid after a major disaster, but governments can be less generous. The UN set a target that every year richer countries should give 0.7% of their GDP to poorer countries. Not many countries meet this target! However, in the long term, trade is much better than aid in helping poor countries to develop. Trade creates jobs, which provides wages that people spend on improving their quality of life.
What is the EU?
It was originally set up in 1957 to achieve economic and political cooperation after the 2nd World War. The number of countries has grown dramatically in the last decade and there are now 28 member states.
Do differences in development exist within the EU?
The EU is a very rich region, but there is still a big gap between its richest and poorest regions. The richest regions include areas like London, Brussels and Hamburg. Luxembourg – the richest country is more than seven times richer then Bulgaria or Romania, the poorest members of the EU.
Comparison of two EU countries:
- The UK is part of the EU’s ‘core’ or centre. These create the most wealth and have larger populations. They produce and consume most goods and services and have the best communications.
- UK joined in 1973 and is rich. However, 14% live in poverty. The global recession has meant that we have a trade deficit – 351.3 billion exports and 473.6 billion imports in 2010.
- GNI/capita ppp: $36,130
- HDI rank: 21
- Employment structure: 1.4% Agriculture, 18.2% industry and 70.4% services
- Poland is on the ‘periphery’ or edge of the EU. Such countries have poorer populations and poorer communications. Belonging to the EU has helped them develop.
- Poland joined the EU in 2004; it used to be a communist country. 17% live in poverty. Hundreds of thousands of Polish migrants came to the UK to find work after joining the EU (see Population case study!) Trade deficit – $134.7 exports - $141.7 imports.
- GNI/capita ppp: $17,310
- HDI rank: 41 Employment structure: 17.4%
- Agriculture, 29.2% industry and 53.4% services
What is the EU’s regional policy?
The policy transfers resources from richer to poorer areas.
Between 2007-2013, regional spending will have used up 36% of the EU’s spending - $350 billion!! The focus is on countries in Central & Eastern Europe – like Poland. The money comes from three sources:
- The European Regional Development Fund, which pays for general infrastructure
- The European Social Fund, which pays for things like training and job creation programmes
- The Cohesion Fund, which covers environmental and transport infrastructure projects, as well as the development of renewable energy. You have to be a country with living standards less than 90% of the EU’s average to qualify for this funding.