Development Case Studies

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  • Created by: Sofalof
  • Created on: 18-01-15 14:45

Singapore

  • Steadily increasing population (from 1.6 million in 1960 to 5.4 million in 2013)
  • High population density
  • Urbanisation economy
  • Population has become far more educated (Confucion values)
  • Independent from Malaysia in 1965 (disaster as it had no industry or infrastructure, and a British military base closed which employed 1/6th of the population)
  • Chinese revolution scared TNCs away from China, Taiwan and Hong Kong
  • Singapore welcomed TNCs with low taxes, cheap wages, a large skilled workforce and vocationally-focused education
  • 1968 laws restriced employees right to strike, and the government encouraged companies to sack their entire workforce, and then reemploy everyone but troublemakers
  • Lee Kuan Yew was president, and introduced new policies to grow singapore economically
  • Gave people a crash course in business and put them in charge of companies set up by the government, and threatened them with closure if they didn't succeed e.g. Singapore Airlines
  • Mixture between Eastern and Western culture
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China

  • Nearly 10 million km2
  • Capital city = Beijing
  • Mao created People's Republic of China in 1949
  • Deng initiated modernisation of China in 1977
  • GDP per capita = $7,000
  • Literacy rate = 95%

REASONS FOR RISE:

  • One child policy
  • Rural household responsibility (farmers allowed to sell surplus goods)
  • Tourism (more accessible, Olympics, famous landmarks)
  • SEZs (5, special tax incentives for foreign investors & independence on international trade activities)

BENEFITS OF RISE:

  • Decrease in poverty
  • Increase in standard of living and quality of life
  • Better infrastructure (e.g. 3 Gorges Dam)
  • Increased globalisation

DRAWBACKS OF RISE:

  • Split into two political systems (modernist and socialist) causes internal conflict
  • Huge disparity between rich and poor
  • Increased dependency ration (1-2-4 family)
  • Gender imbalance (60% male)
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India

  • 3 million km2
  • Capital city = New Delhi
  • Became independent from UK in 1947

WHY COMPANIES OUTSOURCE TO INDIA:

  • Low cost, high quality (40% of what it would cost in USA)
  • 2nd largest English-speaking manpower resource in the world
  • World class infrastructure
  • Stable democratic environment

BANGALORE:

  • Many TNCs (IBM, Accenture etc. )
  • Rural-urban migration (population has risen to 10 million people)
  • Government struggling to keep up with growing demand for infrastructure (new airport with 2-3x the capacity of old one built in 2008, new billion dollar metro system will carry 1 million passengers per day)
  • Globally competitive wage ($10,000-20,000)
  • Multiplier effect (for every outsourcing job, 4 more are created)
  • Government tried to decrease influence of caste system (more power to land workers vs land owners)
  • Competition between cities trying to become specialist
  • New privately funded toll road
  • Developments may benefit TNCs more than locals
  • 13,000 millionaires
  • New middle class
  • Rising house prices ($300,000 for 2 bedroom apartment in city centre)
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Niger

CHARACTERISTICS:

  • Lowest HDI in world (0.337)
  • 0.02 physicians per 1,000 population (2.77 in Uk)
  • Literacy = 28.7%
  • Agriculture provides 1/3rd GDP and livlihoods for 9/10ths of population
  • 63% live below poverty line
  • $1.556 billion external debt

CAUSES OF POVERTY:

  • Food insecurity and drought
  • Landlocked location
  • 80% of land is the Sahara desert
  • Political instability (coup in 2010)
  • Dependent on external factors (uranium market, rainfall, donor financing - 1/2 the governements budget comes from aid)
  • Poor infrastructure
  • Inadequate health and education systems
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Starbucks

  • 23,000 locations in 65 countries
  • CEO, President and Chairman = Howard Schultz (sold to him in 1987)
  • Annual revenue = $15 billion
  • Employees = 160,000
  • 1st shop opened in Seattle in 1971
  • Share price has risen steadily over past 20 years, except for in 2008 (global financial crash, 771 shops closed)
  • Sources coffe beans from Latin America, Africa and Asia
  • Most manufacturing in USA (one roasting plant in Netherlands) as it requires a skilled workforce
  • Fordism has been implemented as the roasting process is highly automated and segemented
  • Customer care outsourced to company called Sitel in New Mexico

POSITIVES:

  • FairTrade (biggest buyer of FairTrade coffee in the world, with 95% ethically sourced overall)
  • Reusable tumblers reduce waste
  • Partners and customers contributed over 600,000 hours of volunteering in 2013
  • Starbucks Foundation distributes grants to non-profit organisations ($8.7 million in 2013)
  • Creates jobs with a low turnover rate of 9%

NEGATIVES:

  • Out-competes local stores
  • Use 2.3 billion paper cups per year
  • Doesn't always benefit host countries - tax avoidance schemes (hasn't paid corporation tax since 2009)
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Fender

  • Mexico - Fordism
  • USA - Post-Fordism
  • Established in 1945
  • Controls 30% of US guitar market (worth $700 million a year)
  • Uses Maquiladoras

MAQUILADORAS:

  • 2,700 in Mexico - up 15% from last year, and emplyees up 26%
  • 810 employees at Fender factory
  • Low 5% turnover rate compared to 70-100% at others such as Sony and Hyundai
  • $60 per week salary, high for a maquiladora, plus free medical and day care, an athletic programme, subsidised housing and low-cost loans
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