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Reducing the Development Gap: Strategies and Case Studies, Study notes of Tourism

Strategies to reduce the development gap between countries, including investment, industrial development, tourism, aid, intermediate technology, fair trade, debt relief, and microfinance loans. The text also provides a case study of Nigeria, focusing on its economy, political history, and relationship with the UK and other countries.

What you will learn

  • What strategies are used to reduce the development gap between countries?
  • How does intermediate technology impact the development gap?
  • What role does aid play in reducing the development gap?
  • What is the current state of Nigeria's economy and its relationship with the UK and other countries?
  • How does industrial development contribute to reducing the development gap?

Typology: Study notes

2021/2022

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Changing Economic World
Measuring Development
Development measures how economically, socially, culturally or
technologically advanced a country is. It suggests: advancement,
evolution, expansion, grow th, improvement, increase, maturity, progress,
changes for the better.
Development Indicators
GNI Rocks that bash together to become smooth/smaller.
HDI A chemical reaction that dissolves rocks.
Infant
mortality
Rocks hurled at the base of a cliff to break pieces apart.
Literacy
rate
Water enters cracks in the cliff, air compresses, causing the
crack to expand.
You need to know the advantages and disadvantages of each of these
UK Links
Ports Air Roads
UK port industry is
the biggest in
Europe due to our
large coastline
120 ports in UK;
Teesport is the 3rd
biggest
Teesport handles
5000 vessels each
year
Heathrow is the Uks
busiest airport with
1 plane taking off
every 45 secs
300000 people
employed in UK
aviation
Durham Tees Valley
airport is looking to
expand
1st motorway in
1958
By 2008 there w ere
2200 miles of
motorways
The A1 is the longest
road in the UK and
connects Teesside
The A19 is g etting
improved
UK Global Links
Political
Commonwealth
These are 53 states across the world that were part of
our colonial history
Many expats live there (Brits who live abroad)
The Queen is head of state in 16 of these countries
promotes democracy, good governance, human rights
and economic development as the UK trades with its
previous colonies
EU
We joined the EU in 1979 and opted to leave in 2016.
About 50% of exports and imports are to the EU
It’s now a bit confusing as we go through the Brexit
process about what will happen to EU laws that we
have.
Trade 49.6% of the UK’s exports went to EU countries, and
50.4% went to non-EU countries such as the USA and
China,. The USA takes the most.
A lot of trade is now finance and comm unications
following deindustrialisation.
Transport More than 750,000 international flights depart from
the UK annually to 400 airports in 114 countries
Heathrow is the 4th busiest airport in the world (good
seeing as we’re not the 4th biggest population!)
Eurotunnel links our island to Europe
Culture English Language has helped us set up strong links
Students abroad can sit British exams
UK TV productions have a global audience
We are a culture of immigration leading to a uniq ue
and multicultural society
Technology 90% of population has internet very connected!
We spend more online shopping than anywhere in
Europe
18 million businesses run from home
SoL/QoL
Standard of life refers to the economic level of a person’s daily life.
Quality of life looks at social measures of well being.
Factors Causing Uneven Development
Physical Environment Health
Soil erosion, desertification , climate
change, overgrazing and infertile
soils affect farming.
Areas without fe rtile land, natural
resources, water and energy suffer.
Natural hazards make little progress
with development e.g. Haiti.
Diseases can make people too weak
to work or go to school.
80% of all developing world disea se
is water-related. 2 million die a year.
LIC’s are unable to invest in goo d
quality health care
Trade History
Trade blocs favour its membe rs.
Primary products sold by LIC’s are
sold for cheap price s that can
fluctuate. HICs make more expensive
products so earn more..
Poor infrastructure or conflict means
some people cannot se ll their goods
at all.
Colonialism: Many co untries in Asia,
S. America and Af rica have spent a
lot of time and mo ney on civil wars
and political struggles f or power
since being made separate f rom
European superpowers.
Many LICs haven’t had ti me to
develop fully.
Unit 2b
Classifying the World’s Development
A HIC has an GNI per capita of over
~$12000
A NEE has an economy that is
rapidly progressing
A LIC has a GNI per capita of below
$800
Many years ago, Dr Brandt classified the
world into the rich north and the poor
south. He drew this line called the
Brandt Line or the North-South Divide.
However over time, countries in the
south began to develop like Singap ore
and China and the line became
outdated.
Measuring Population
The demographic transition
model shows how a country’s
population changes as it
becomes more developed from
subsistence farming cultures to
HICs.
Population pyramids/structures
change over time too from
having a lot of babies and a wide
bottom, to good healthcare and
more elderly people.
Solutions to Uneven Development
TNCs Aid
Industrial Development Intermediate Technology
Fair Trade Debt Relief
Microfinance Tourism
Tourism in Kenya
Background: Kenya is in East Africa.
It has 333 miles of coa stline on the
Indian Ocean. It has a G NI per capita
of $760.
Attractions: The Big 5 animals for safa ris,
Mt Kenya, Mombasa coas t for white,
sandy beaches and cora l reefs Hot climate.
Cultural tours of the Masai Mara tribe and
hot air balloon rides ove r the savannah
Positive Impacts: Negative Impacts
Economic earns $500mill/year .
11% of people employed in tourism.
Better roads and infrastructure.
Social understanding of cultural
ideas. Can invest money in
healthcare and education.
Environmental Educate on how to
look after environment. Ecotourism.
Economiconly 15% of profits stays in
the country; the rest goes to HICs. The
jobs are seasonal.
Social local people can be offended by
dress ware that’s considered
inappropriate. Most people visit the
south so the north isn’t benefiting.
Environmental wildlife can be disturbed
affecting breeding. Increased air
pollution. Soil erosion from jeeps.
Ecotourism
Ecotourism, is a type of tourism which involves protecting the
environment and the way of life of local people. E.g. Tsavo National Park.
People camp, they stick to roads and don’t get close to the animals.
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Changing Economic World

Measuring Development Development measures how economically, socially, culturally or technologically advanced a country is. It suggests: advancement, evolution, expansion, growth, improvement, increase, maturity, progress, changes for the better. Development Indicators GNI Rocks that bash together to become smooth/smaller. HDI A chemical reaction that dissolves rocks. Infant mortality Rocks hurled at the base of a cliff to break pieces apart. Literacy rate Water enters cracks in the cliff, air compresses, causing the crack to expand. You need to know the advantages and disadvantages of each of these UK Links Ports Air Roads

  • UK port industry is the biggest in Europe due to our large coastline
  • 120 ports in UK; Teesport is the 3 rd biggest
  • Teesport handles 5000 vessels each year - Heathrow is the Uks busiest airport with 1 plane taking off every 45 secs - 300000 people employed in UK aviation - Durham Tees Valley airport is looking to expand - 1 st^ motorway in 1958 - By 2008 there were 2200 miles of motorways - The A1 is the longest road in the UK and connects Teesside - The A19 is getting improved UK Global Links Political Commonwealth
  • These are 53 states across the world that were part of our colonial history
  • Many expats live there (Brits who live abroad)
  • The Queen is head of state in 16 of these countries
  • promotes democracy, good governance, human rights and economic development as the UK trades with its previous colonies EU
  • We joined the EU in 1979 and opted to leave in 2016.
  • About 50% of exports and imports are to the EU
  • It’s now a bit confusing as we go through the Brexit process about what will happen to EU laws that we have. Trade • 49.6% of the UK’s exports went to EU countries, and 50.4% went to non-EU countries such as the USA and China,. The USA takes the most.
  • A lot of trade is now finance and communications following deindustrialisation. Transport • More than 750,000 international flights depart from the UK annually to 400 airports in 114 countries
  • Heathrow is the 4th busiest airport in the world (good seeing as we’re not the 4th biggest population!)
  • Eurotunnel links our island to Europe Culture • English Language has helped us set up strong links
  • Students abroad can sit British exams
  • UK TV productions have a global audience
  • We are a culture of immigration leading to a unique and multicultural society Technology • 90% of population has internet – very connected!
  • We spend more online shopping than anywhere in Europe
  • 18 million businesses run from home SoL/QoL Standard of life refers to the economic level of a person’s daily life. Quality of life looks at social measures of well being. Factors Causing Uneven Development Physical Environment Health
  • Soil erosion, desertification, climate change, overgrazing and infertile soils affect farming.
  • Areas without fertile land, natural resources, water and energy suffer.
  • Natural hazards make little progress with development e.g. Haiti.
  • Diseases can make people too weak to work or go to school.
  • 80% of all developing world disease is water-related. 2 million die a year.
  • LIC’s are unable to invest in good quality health care Trade History
  • Trade blocs favour its members.
  • Primary products sold by LIC’s are sold for cheap prices that can fluctuate. HICs make more expensive products so earn more..
  • Poor infrastructure or conflict means some people cannot sell their goods at all.
  • Colonialism: Many countries in Asia, S. America and Africa have spent a lot of time and money on civil wars and political struggles for power since being made separate from European superpowers.
  • Many LICs haven’t had time to develop fully.

Classifying the World’s Development Unit 2b

  • A HIC has an GNI per capita of over ~$
  • A NEE has an economy that is rapidly progressing
  • A LIC has a GNI per capita of below $ Many years ago, Dr Brandt classified the world into the rich north and the poor south. He drew this line called the Brandt Line or the North-South Divide. However over time, countries in the south began to develop like Singapore and China and the line became outdated. Measuring Population The demographic transition model shows how a country’s population changes as it becomes more developed from subsistence farming cultures to HICs. Population pyramids/structures change over time too – from having a lot of babies and a wide bottom, to good healthcare and more elderly people. Solutions to Uneven Development TNCs Aid Industrial Development Intermediate Technology Fair Trade Debt Relief Microfinance Tourism Tourism in Kenya Background: Kenya is in East Africa. It has 333 miles of coastline on the Indian Ocean. It has a GNI per capita of $760. Attractions : The Big 5 animals for safaris, Mt Kenya, Mombasa coast for white, sandy beaches and coral reefs Hot climate. Cultural tours of the Masai Mara tribe and hot air balloon rides over the savannah Positive Impacts: Negative Impacts Economic – earns $500mill/year. 11% of people employed in tourism. Better roads and infrastructure. Social – understanding of cultural ideas. Can invest money in healthcare and education. Environmental – Educate on how to look after environment. Ecotourism. Economic – only 15% of profits stays in the country; the rest goes to HICs. The jobs are seasonal. Social – local people can be offended by dress ware that’s considered inappropriate. Most people visit the south so the north isn’t benefiting. Environmental – wildlife can be disturbed affecting breeding. Increased air pollution. Soil erosion from jeeps. Ecotourism Ecotourism, is a type of tourism which involves protecting the environment and the way of life of local people. E.g. Tsavo National Park. People camp, they stick to roads and don’t get close to the animals.

Economic and Industrial Change in China History and Landscape

  • In 1949 China was one of the poorest countries in the world with ~90% of the population lived in the countryside and in poverty. The average life expectancy was 49 and you’d have 5 children.
  • 1979 opened up borders and Coca-Cola was one of the first companies to set up a joint venture in China.
  • It has some very inaccessible areas including the 4000m high Tibetan plateau and 2 deserts! This means the population is concentrated near the rivers in the East and the coast.
  • China has an ageing population and a gender imbalance following its 1 child policy. Political Changes Manufacturing and Economy
  • China joined the World Trade Organisation (WTO) in 2001 and that reduced barriers to trade.
  • China is an original member of the UN and is one of the five permanent members of the Security Council who safeguard world peace.
  • The EU is by far the largest trading partner of China, and China is the second largest trading partner of the EU. The EU’s investment in China continues to grow.
  • Treaty of Good Neighbourliness and Friendly Cooperation. - China is ‘the workshop of the world’. - ~80% of China's exports are manufactured goods - textiles and electronic equipment. It is the # producer of computers. - 3/5 of the world’s busiest ports are in China - China has low production costs and cheap labour - There’s a lot of people in china to buy goods there – never mind exporting them. This means more money for the government and they’ve invested in education, healthcare and infrastructure (China has enough tarmacked roads to loop the world x16!) TNCs in China: Apple
  • Workers are cheaper in China than American ones would be. The apple Shenzen factory employs over 300, people and they get paid 30p/hr. Most workers live in dorms next to the factory, and get 3 meals a day.
  • However, In 2006 it was reported that 200,000 workers who lived and worked in Shenzen factory were regularly working more than 60 hours a week for $50 a month. Some workers also decided to sue Apple after complaining about being poisoned by a cleaner used to clean LCD screens.
  • An investigation occurred in 2010 after 10 people committed suicide and the investigation shows that rules were be broken on working hoursand the safety of workers. Aid to China 11.8% of people in China live on less than $1.90 a day. Official Development Assistance (ODA) from Japan to China began in. This was following a history of violent and nasty wars between the 2 nations. It is an example of bilateral aid. Impacts of Development in China Social Environmental High rural – urban migration has led to water stress in the north of China. Also traffic congestion; 5mill cars in Beijing alone! Very dense populations in the flat, accessible areas of the east means greenbelts no longer exist. HDI on the up Soil erosion and desertification in the north. Habitats being destroyed to build and farm 10% of agricultural land is contaminated with heavy metals and 1/3 Yangtze river is too polluted to use! China emits 30% of the world’s annual greenhouse gases due to coal - which has knock on health impacts. Economic and Industrial Change in the UK De-industrialisation is the decline in secondary (manufacturing) industries, and the subsequent growth in tertiary and quaternary employment The UK has experienced de-industrialisation and has changed into a post-industrial economy; with more tertiary and quaternary industries. Secondary manufacturing industries (like the steel around here) has moved to cheaper countries abroad (e.g. China). The employment structure for Teesside has changed in the last 50 years due to the loss of employment in iron, steel and chemical industries as companies such as SSI in Redcar close. In the 1970’s, approximately 50% of people in Teesside were employed in manufacturing. In 2008, just 10% of jobs were based in manufacturing, which has mostly been due to industry closures. Changing Economic and Industrial Teesside Science Parks; Wilson Centre
  • Wilson Centre was opened in 1975 in Redcar and had £200 mill of government investment.
  • Over 60 companies, ranging from TNCs to start- ups, are located at the Centre and it’s 70% filled.
  • It has strong links with Teesside Uni in terms of employment. A science park is a group of scientific and technical knowledge-based businesses, located on a single site. Most of these are associated with universities, in order to use research facilities and employ skilled graduates. There are over 100 science parks located in the UK. Business Parks; Belasis Business Park
  • Belasis Business Park was built in the 1990s is 1 mile from the A19 and from Billingham Town Centre. It is part of the Tees Valley Enterprise Zone.
  • It’s eco aware as waste heat and CO 2 is used to grow tomatoes on site.
  • Rents are as low as £2/m 2 to try and attract businesses to the area.
  • A lot of the businesses are chemical companies A business park is an area of land that contains a cluster of different businesses, often located on the edges of towns and cities. This is because land is cheaper there, and more land is available Example : In Selwick’s Bay, Holderness Rural Changes Britain is experiencing counter-urbanisation where people move to the countryside in search of a better quality of life away from pollution and overcrowding. This causes commuter villages (e.g. Stillington Village): people live close to their work but drive there by car. This can lead to benefits for the villages or drawbacks: Growth; Stillington Village Good links to Stockton and Durham is having 54 new houses built. A primary school, takeaway and football pitches have been built as a result, along with improved bus routes. Decline; Lazenby Village Limited services with the post office shutting down and the bus cancelled in 2012. It has an elderly population as young people leave to find employment. North South Divide Some parts of the UK are easier to; build and farm due to the landscape but deindustrialisation hit the North worse This means that the South is growing with migrants looking for work More unemployment in the North (9.9% in NE vs 4.4% in SE) links to poverty (2% higher in North). For every 12 jobs created in the South, only 1 is in the North. Average pay is £4k more in the South and you’ll live on average 2.5 years longer!

Different economic and social measures of development

Social Measures ( Measure an aspect of quality of life) Infant mortality – the number of babies that die per 1000 before their first birthday. If this is high, the country must not have good hospitals = Developing. Birth rate – The number of births per 1000 of the population per year. If this is high, then the country probably has little access to contraception and sex education = Developing. Death rate – The number of deaths per 1000 of the population per year. This is misleading - see below Literacy rate – The % of people that can read and write. If this is low, it shows people cannot read and write, so must not have access to schools = Developing People per doctor – The average number of people to one doctor. If this is high, it means the country has little money to employ doctors = Developing. Access to safe water – This is the % of people with access to clean water. If this is low, it means that the people do not have clean water running in to their homes, either because they can’t afford it or the Government cannot afford to install it = Developing. Human Development Index: This is a number which is calculated using life expectancy, literacy rate, education level and income per head. It measures the health, wealth and education of a country. Countries have a HDI value between 0 and 1. 0 = the least developed, where as 1 = most developed. The problem of using individual indicators is it can be misleading. Some indicators improve at different rates to others. So it might means that a country is more developed than it actually is. For example if you looked at GNI per head of Russia it might seem quite high enough to be a HIC, however in reality there is huge disparity (difference) between the rich and poor.

Limitations of economic and social measures.

The problem of using individual indicators is it can be misleading. Some indicators improve at different rates to others. So it might means that a country is more developed than it actually is. Economic: GNI per head It hides variations within a country. For example, cities may be rich where as rural areas may be very poor, this is true in LICs. The wealth might only be in a few hands. For example, Russia it might seem to have a high enough GNI per head to be a HIC, (it has many millionaires and billionaires) which increases the GNI score. However, there are many extremely poor people in Russia as well. So there is huge disparity (difference/variation) between the rich and poor. GNI per head does not tell us black market economic activity. $ currency changes daily. Social: Death rate is high, many people would assume it is a developing country where many people are dying from poor sanitation and lack of health care. However, in very developed countries like Germany, death rate is high due to the proportion of the population who are over 65. Birth rate data can be influenced by governmental policies like China’s One Child rule. Measuring literacy rates in developing countries, or conflict zones or squatter settlements is very difficult. Limitation to using access to safe water is that water quality can decline following flooding or poor maintenance to water pipes. Also in urban areas increasing costs of water, force the poorest residents to use unsafe sources of water. Infant Mortality – in the world poorest countries it is difficult to measure infant deaths, as many are buried in unmarked graves. Resulting in official data being an estimate.

Link between stages of the Demographic Transition Model and the level of development

DTM – Demographic Transition Model – it shows how birth and death rates affect population growth (Population Growth Rate – How fast the countries population is growing.

  • Natural Increase– When the birth rate is greater than the death rate (population growth)
  • Natural Decrease– When the death rate is greater than the birth rate (population decline)
  • Country to Country: Birth and rate and death rates differ from counties to country. This means that population growth is faster in some countries than others, especially in less developed countries.
  • Within a country: population growth changes within a country as a country develops economically.
  • The DTM have 5 stages, and countries (usually) move from stage 1 to 5 as it becomes more developed. Stage 1 2 3 4 5 Develop ment Least developed LIC This is where NEE’s are HIC’s Most developed Birth Rate High High Decreases Low Low Death Rate High Decrease s Decrease and low Low Low but increasing Populatio n Growth Rate Slow Fast Fast Slow Decrease Reason Birth Rate Children needed for farming, People have lots of children because of poor health care and so Infant Mortality Rate high, lack of contraception , Farming becomes more mechanised, urbanisation, Women in education and more equal rights and so they work and don’t have as many children, contraception available, Less farming and more secondary industries mean children are not needed Women in education and pursue careers, so marry later, contraception widely available, Children are expensive Reason Death Rate Little health care, famine, Poor water and sanitation, Life Expectancy is low Water and sanitation improves and health care starts to improve = Life expectancy starts to increase, Vaccinations given to children = death rate starts to decrease. Good health care (often free), sanitation, water supply, healthy diets. Death rate starts to increase - larger proportion of elderly dependants

Death Rate

Birth Rate

Population Growth

An overview of the strategies used to reduce the development gap: investment, industrial development and tourism, aid,

intermediate technology, fairtrade, debt relief, microfinance loans.

Aid:

  • Given from one country to another as money or resources (food, doctors). This can be given as Bilateral aid (government to government), or via NGO’s.
  • Aid is spent on development projects likes schools improving literacy rates, buildings dams to provide clean water , supply farming equipment and training people how to farm to secure reliable food sources. This closes the development gap by improving quality of life of some of the population
  • Problems: Aid can cause debt and can become unmanageable, Or once the aid stops the projects stop , Corrupt governments may not distribute the aid to the needy. Debt relief:
  • This is when a countries debt is cancelled or interest rates lowered. This means the country can spend taxes on improving schools and hospitals rather than servicing the debt. For example, Zambia’s $4billion debt was cancelled in 2005, this resulted in a free health care scheme starting in 2006.
  • Problems: This can encourage countries to go down the same route as before and end up in debt again. They do not learn how to make their economy more sustainable. Also this can be seen as unfair which countries have their debt reduced or cancelled.

Development Gap – Difference in level of people’s quality of life and economic income between countries,

Fair trade:

  • This involves farmers getting a fair price for their goods in LICs, for selling things such as coffee and bananas allowing them to provide for their families
  • Companies who want to sell products labelled as “fairtrade” have to pay the producer a fair price. Buyers also pay a bit extra,.
  • This results in the country of origin getting more taxes to develop infrastructure and farmers having more money to buy medicines and send children to school. This closes the development gap.
  • Problems: If big companies such as Cadbury’s decide to use Fair Trade cocoa beans it can put non-fair trade producers out of business , increasing unemployment. Also, some consumers do not want to pay more for goods, meaning some Fair Trade producers can see sales go down and in some cases face bankruptcy, resulting in less income than before. Large companies decide if they sell Fairtrade – i.e. Sainsbury has now banned selling Fairtrade produce Microfinance loans:
  • Small loans given to people in LICs who may not be able to get loans from the banks. This means they can start businesses , therefore making money.
  • Problems: This does result in debt and can mean families paying profits servicing debt rather than spending it on medicines and sending children to school. There is also not that much research in how much it does reduce poverty. Using intermediate technology
  • Includes tools, machines and systems which improve quality of life, but are simple and affordable to maintain.
  • For example, LED lightbulbs being introduced to Nepal, allows locals to work and children to study at home. – this closes the development gap. This results in a GNI per capita and money to develop. The other lighting options are polluting and dangerous kerosene lamps or wood fires.
  • Problems: It may not reach all communities within a country and this can lead to unequal development within countries as some areas economies develop faster than others.

An overview of the strategies used to reduce the development gap: investment, industrial development and tourism, aid,

intermediate technology, fairtrade, debt relief, microfinance loans.

Industrial development

  • In countries with a very low level of development, agriculture makes up a large portion of the economy.
  • Developing secondary industries and promoting Transnational Corporations to invest, moves countries away from agriculture. This means that a higher GNI is reached, leading to more money to develop.
  • Problems: This can increase many types of pollution , industrial waste can end up in rivers and kill fish, as some Nike factories in Vietnam have caused. Also air pollution can increase, leading to breathing disorders locally.

Development Gap – Difference in level of people’s quality of life and economic income between countries,

Tourism:

  • Tourism can lead to an increased income for locals and the government, as tourist have huge amounts of disposable income. I.e countries like Kenya.
  • Problems: Most money from tourism goes to the tour operators in HIC’s meaning the locals do not see all of the benefits and still live in poverty. Local values and traditions can be ignored, resulting in cultures being lost in some countries. Also it can put pressures on water and waste disposal. Investment:
  • Foreign Direct Investment (FDI) is when companies buy property and infrastructure another to develop their own company or project. I.e BMW locating factories in another country. This has good features such as improving the expertise and skills of local people who work in factories. This has good features such as improving the expertise and skills of local people who work in the factories, increasing trade for the country, offering new job opportunities to people, transferring technology and ideas from rich to poorer nations and increasing taxes to the host country.
  • Problems: Companies and owners could ‘pull out’ of the country at any time, this can cause unemployment or financial difficulty trying to maintain the infrastructure in the area. Also, much of the profits return to the country who invested the FDI , leaving less money in the local economy. Also, misuse of the environment, local workers in poorer countries getting poor wages or working in poor conditions, and also large foreign firms squashing the development of local companies.

The location and importance of the country, regionally and globally

  • India is in South East Asia and a Newly Emerging Economy
  • India has the 2 nd^ largest population in the world (approx. 1.3 billion)
  • India was a colony of the British until 1947, but now has it’s own ‘elected’ government.
  • It has medium level of development with a HDI of 0.61. However, great inequalities exist. Some people are very wealthy, but 20% still live in poverty. Although education is improving, literacy rate is just 70%.
  • It exports services and manufactured goods across the world

A case study of one NEE: India

the location importance of the country, regionally and globally, the wider political, social, cultural and environmental

context, the changing industrial structure, The balance between different sectors of the economy.

India’s Rapid Development is due to industrial structure changing

  • Primary industries such as agriculture employ 50% of the workforce, but this is decreasing. Primary industry only accounts for 17% of the GNI
  • Secondary industries now employ 22% of the population, work here is better as it is not seasonal and wages are higher than agriculture. This stimulated economic development, as they create more reliable jobs than agricultural work, and selling manufacturing goods overseas brings more income into India than selling raw materials.
  • Tertiary (services) and quaternary (knowledge and information services) industries are also growing , with 29% of the workforce employed here. India has many call centres and IT firms (in Bangalore) operating within it. 53% GNI.

A case study of one LIC or NEE to illustrate: How manufacturing industry can stimulate economic development • role of

transnational corporations (TNCs) in relation to industrial development. •Advantages and disadvantages of TNC(s) to the

host country • changing political and trading relationships with wider world

What is a Transnational Corporation (TNCs)

  • Are companies that are located in or produce and sell products in more than one country E.g Sony is a TNC it makes electronic products in China Japan.
  • TNC factories are usually located in poorer countries because labour is cheaper, and there are fewer environmental and labour regulations which means they make more profit
  • They can improve the development of a country by transferring jobs, skills and money to less developed countries reducing the development gap. This means governments often encourage TNCs to set up in their country.
  • TNC often located their Headquarters in HIC because here there are more educated people to work in administrated skills
  • Advantages – creates jobs – which have more reliable income, spend more money improve local infrastructure (airports roads), New technologies computers and skills brought to the poorer countries
  • Disadvantages – wages low, work long hours and poor conditions, most profits go back to HQ in HIC and not reinvested in to the poor country

Many transnationals operate in India – they bring advantages and disadvantages

  • Many TNC’s operate in India including Coca Cola
  • TNC’s can help economic development by increasing the amount of manufacturing industry and they can bring benefits and disadvantages. Coca-Cola in India: Has it’s headquarters in Atlanta in the USA, and factories all over the world. In 1997, due to a cheap workforce, long working hours, the low cost of raw materials and the opportunity to sell more Coca-Cola to the 2nd^ largest nation in the world, it set-up in India, in the state of Kerala , southern India The benefits of Coca – Cola to India:
  • Created jobs – 7000 in total (125,000 indirectly), giving the people a wage and a chance to pay for medicines and send children to school.
  • Generates taxes – this helps the government pay to improve schools and hospitals.
  • Coke has set up, primary education projects – these help the poorest children get an education.
  • Has worked with NGO’s to set up medical centres and provide medical treatment for the poor – this has saved lives and increased life expectancy. The problems of Coca – Cola in India:
  • Most of the profit returns to the USA – means development takes place slowly eg building new infrastructure projects.
  • It takes 3.8 litres of water to make 1 litre of Coke – this has caused the water table to drop 35m, leaving farmers without water to water crops, leading to bankruptcy.
  • Villagers in some cases are being forced to drink dirty water and walk for miles to get this = cholera.
  • People work long hours, sometimes up to 16hr shifts = less time with family.
  • Wages are still low = quality of life improves slowly as people have only limited funds to send children to school and buy medicines.

India’s relationship with the wider world is changing:

  • India is playing a more leading role in regional and global politics as it develops. It has improved relations with its immediate neighbours and global trading partners International trade is growing by
  • India is reducing barriers to increase trade and encourage Foreign Direct Investment.
  • Trade is happening with more foreign businesses, particular those who get companies in India’s large service sector to do office jobs for them, is also increasing,
  • India now has many of it’s own global companies. For example Tata steel is controlled by India and operates in the UK. India also make Jaguar and Land Rover cars.
  • India is also working with its neighbours to build the TAPI pipeline to carry natural gas from Turkmenistan, through Afghanistan and Pakistan to India

A case study of one LIC or NEE to illustrate: How manufacturing industry can stimulate economic development • role of

transnational corporations (TNCs) in relation to industrial development. •Advantages and disadvantages of TNC(s) to the

host country • changing political and trading relationships with wider world

Major changes in the economy of the UK and the effects on employment patterns and regional growth

How has the economy the UK economy changed?

1. De-industrialisation and the decline of the UK industrial base - fewer jobs in primary and secondary industries such as mining and steel making. And manufacturing. These industries were once a primary source of employment and income for the UK. 2. Globalisation and government policies – A lot of manufacturing has moved overseas, where labour costs are lower, though headquarters of manufacturing companies have often remained in the UK. Trade with other countries is an increasingly part of the UK GDP. In 1945 – 80s the UK government propped up the declining UK economies (coal, steel and British Rail) as they were unprofitable (equipment was old, outdated practices). The 1970s was full of strikes. In the 80s to 2010, state run industries were sold off to private companies, this is called privatisation and it brought change. The UK derelict industrial areas were redeveloped into financial centres. 2010 onwards – the government had to rebalance the economy. This was to be done by rebuilding the UK’s manufacturing sector and relying less on service industries in particular the financial sector. This included: improving infrastructure (Crossrail), more investment in manufacturing industries, easier access for loans for small businesses and encouraging global firms to locate within the UK 3. Mechanisation – Less workers are needed in primary and secondary industries as machines can now do these jobs. Primary Industries – These collect raw materials such as; farming, logging, oil rigging, mining, quarrying etc Sector employment of employment in the UK Quaternary – Knowledge and Information services Tertiary Industries – These provide a service such as; teaching, accounting, health care, sales assistants etc Secondary Industries – These manufacture goods into products such as; car manufacturers, food processing plants, toy assembly plants, builders etc The UK is moving towards a post-industrial economy – continued next page Post industrial economy is the economy of many economically developed countries where most employment is now in service industries. Services are more important in the UK as we become Post-Industrial. Tertiary and quaternary industries are growing in the UK and in 2011 accounted for 81% of the workforce. As secondary manufacturing is declining, Important industries in this sector include: Quaternary Industries: Defined as hi-tech , research and design. They include hardware and software designers for computers, pharmaceutical companies which are designing the new medicines for tomorrow, or aeronautical (planes and space) engineering. These are the growing industries in developed countries.

Major changes in the economy of the UK and the effects on employment patterns and regional growth. Continued

Impacts of industry on the physical environment Large scale extraction of industries such as mining and quarrying can and have an impact on the environment. This has been the case in the UK. Where quarries have been cut out of the countryside and huge wastes topes pilled up on the edges of mining settlements. Additionally, manufacturing plants can look very dull and can have a negative visual effect on the landscape. Other issues include: It can destroy natural habitats, pollute water, scar the coastline, transportation of raw materials and manufacturing products is usually by road, which increases levels of air pollution and damage to the environment when roads are widened to build wider roads to cope with large trucks. For Example Hanson Cement in Lincolnshire is a cement work and was voted the ugliest eye sore in Britain in 2010, it also creates noise and dust from blasting, scaring wildlife and the dust causing breathing problems locally. More sustainable today due to planning regulations : However today Hanson Cement plants 7 trees for each 1 it cuts down returning habitats – it has now planted 13,000 trees , it only blasts once per day, reducing noise and dust. It has installed a 63m long bat caves to protect endangered species on the land. It has the largest solar farm in the UK to produce electricity, all of which make it a better for the surrounding environment. Its policy is to a good neighbour. As well as making sure the environment is protected, as well as this the company ensure it provides a practical and financial support for local groups. Modern Industrial developments are more environmental sustainable than older plants as they are regulated by strict environmental regulations, better environment awareness and increasing energy and waste disposal cost.. For example Jaguar Rover in Wolverhampton, has solar panels which produce 30% of it’s energy, almost all waste is recycled. The UK is moving towards a post-industrial economy – continued

1. Services – E.g retail, entertainment, and personal services like hairdressing. This is the largest sector. 2. Information Technology – This is now an important part of the UK economy. Over 60,000 people are employed in the IT sector by companies like Microsoft and IBM. 3. Finance – The UK and especially the City of London is the home to important financial institutions. HSBC have their headquarters in London (Canary Wharf). 4. Research – Research and development (R&D) is increasing in the UK, making use of the university graduates in the country. In 2013 nearly £ billion was spent on R&D. Quaternary industries are found in science parks or business parks. A science park is a group of scientific and technical knowledge based businesses located on a single site. There are over a hundred science parks in the UK e.g University of Southampton Science Park. A business park is an area of land occupied by a cluster of businesses example Cobalt Business Park, Newcastle upon Tyne which included IBM, Siemens offices and Santander. They are often:

  1. On the outskirts of cities near transport links e.g. motorways and airports
  2. Close to housing to accommodate the workforce
  3. Near universities to get the best workers and so they have access to university research, allowing them to develop cutting edge technology
  4. Next to other similar businesses to share ideas and expertise. They are on the increase because:
  • There is a growing demand for hi-tech goods and medical breakthroughs.
  • Many universities in the UK have a strong research focus, for businesses on science parks to form links with.

Major changes in the economy of the UK: social and economic changes in the rural landscape: Continued…….

Improvements and new developments in road and rail infrastructure, ports and airports:

The UK’s improving transport network: Although the UK is developed and has much transport infrastructure, but congested transport networks can slow development, so the UK is improving its infrastructure to ensure continued economic growth: Roads – Capacity on motorways is being increased by upgrading motorways ‘smart motorways’ with electronic signals to control speeds and stop accidents, extra lanes are also being added e.g M4. Railways - Crossrail (currently under construction) it will increase central London rail capacity by 10% when it opens in 2018. The proposed H2H line linking London, Birmingham, Leeds and Manchester will increase capacity and allow faster journeys between major English cities eg Manchester and London in 1hr 8 mins. Airports – The UK government has agreed that a new runway has been planned for Heathrow, this will mean greater transport around the world. This is needed as existing airports are full or filling up. Ports – a new port London Gateway is operating at the mouth of the River Thames. It is a hub of global trade and can transport some of the world’s largest container ships. It is able to handle the world’s largest container ships and hopes to become a hub for global trade. The UK’s place in the wider world The UK has strong links with other countries: Trade – The UK trades globally, with links to the USA, Europe and Asia being the most significant. UK’s overseas exports are worth £250 billion per year. Culture - Our creative industries are exporting our culture worldwide eg the X-Factor is now on in 172 countries worldwide. Transport – The Channel Tunnel connects the UK to Europe, provides a route for goods and people to access mainland Europe. Large airports like Heathrow is an international hub connected to hundred of countries. Electronic Communications – As well as being home to offices to many global IT firms like Microsoft research centre is in Cambridge. Trans-Atlantic cables (carrying phone and internet lines) linking Europe and the USA come through the UK European Union – The EU is an economic and political partnership of 28 countries. £130 billion worth of exports went to the EU, as the UK is in economic and political partnership with the 28 other countries. This provides a large market without trade barriers. The Commonwealth – This contains 53 independent states, and advantageous trade links and deals are done with these countries, due to past relationships.

Strategies used in an attempt to resolve regional differences

GCSE The Changing Economic World Knowledge Organiser KI : There are global variations in economic development and quality of life KI : Various strategies exist for reducing the global development gap Key terms Definitions Birth rate Number of births in a year per 1000 of the population Death rate Number of deaths in a year per 1000 of the population Demographic Transition Model A model showing how populations change over time in terms of their birth rates, death rates and total population size Development The progress of a country in terms of economic growth, technology and welfare Gross National Income (GNI) Gross national income divided by the size of the population Human Development Index (HDI) Development measure using GDP per capita, life expectancy and adult literacy. Given as an index figure Infant mortality Average number of deaths of infants under 1 year of age per 1000 live births per year Life expectancy Average number of years a person might be expected to live Literacy rate Percentage of people who have basic reading or writing skills Access to safe water Percentage of people with access to clean water People per doctor Number of people per doctor Key terms Definitions Development gap Difference in standards of living and wellbeing between LICs and HICs Fair trade When producers in LICs are given a better price for the goods they produce Intermediate technology Simple, easily learned and maintained technology used in a range of economic activities serving local needs in LICs Microfinance loans Very small loans given to people in LICs to help start a small business Classification of countries LIC – Low Income Countries US $1045 or less GNP 30 countries NEE – Newly Emerging Economy 80 countries. Number increasing due to globalisation HIC – High Income Country US$ 12,736 or more 80 countries Indicator Limitations LICs Not higher death rate as have younger population Birth rate Useful except where government policies Infant Mortality Rate Decreasing in HICs. Increasing in LICs. Close link to wealth, access to services. Data can be inaccurate Life Expectancy Rising in HICs though may decrease due to obesity Gross National Income Blunt tool. No measure of how much $1 will buy. Hides variations HDI Most useful indicator. Economic and social element. Data can be unreliable. Does not account for subsistence economy, corrupt governments etc. Causes of uneven development Physical Climate Few raw materials Poor farming land Lack of safe water Extreme weather Natural hazards Economic Poor trade links Primary economy Debt Corrupt government Lack of education Poor health and water quality Historical Colonialisation Conflict Consequences of uneven development Disparities in wealth and health HICs – higher income, better health care, higher life expectancy, lower IMR NEE – wealth not evenly distributed LICs depend on HICs for aud. Borrow from world bank causing debt North America 35% of global wealth, Africa 1% International migration Migration to countries with higher development e.g. Mexico to USA Depends on push and pull factors. Money sent home Strategy for reducing the development gap Investment Governments, organisations of companies invest in big projects. Provides employment and income leading to development. TNCs from NEEs and HICs inject FDI leading to multiplier effect Industrial development and tourism HEP helps economic growth in Africa and Asia. Brings employment, income and opportunities. Investment occurs in housing, education and infrastructure Move from primary products as issues with overproduction and import taxes. Manufacturing goods lead to more profit Tourism leads to investment and more income. Vulnerable to recession. Aid Gift (not repaid). Can be funding for development e.g. infrastructure which boosts economy and leads to an increase in quality of life. From countries / IMF / World Bank UK spends 0.7% GDP on aid Intermediate technology Comines sophisticated ideas with cheap readily available materials. Local knowledge and tools used eg. Afridev handpump, solar ovens Fair Trade Prevents exploitation with realistic prices and better working conditions. Increases standard of living, health care and education. Debt relief Writing off debts / making repayments lower and terms longer IMF / World Bank Highly Indebted Poor Countries Initiative helped 41 countries (mainly in Africa) control their finances, show no government corruption and agree to spend saved money on education, healthcare and decreasing poverty. Tanzania now has free education and Uganda has safe water for 2 million people African countries are over US$300 billion in debt Microfinance loans Provided by investors in HICs to entrepreneurs in NEEs and LICs. Many borrowers are women e.g. Glameen Bank in Bangladesh. Vital cash to escape cycle of poverty EG of how tourism in a LIC can reduce the development gap Case Study : Tunisia Reasons for tourism Climate Links with Europe History and Culture Landscape Cheap package holiday How has it helped? Multiplier effects helped souks and farmers. Jobs and income Now one of wealthiest African countries with increasing life expectancy, literacy rates, jobs and gender equality Concerns Pollution of the environment Leakage of profits Terrorism in 2015

GCSE The Changing Economic World Case Studies Knowledge Organiser Key terms Definitions Commonwealth Voluntary association of 53 independent and equal sovereign states Deindustrialisation Decline of a country’s traditional manufacturing industry European Union International organisation of 28 European countries formed to reduce trade barriers and increase cooperation among its members Globalisation The process which has created a more connected world Information technologies Computer, internet, mobile phone and satellite technologies North south divide Economic and cultural differences between Southern and Northern England Post industrial economy Economy of many HICs where most employment is in service industries Science and business parks Business parks are purpose built areas of offices and warehouses. Science parks are near universities and high tech industry is established here. Service industries Economic industries that provide a service (tertiary industries) Trade The buying and selling of goods and services between countries KI : Major changes in the economy of the UK have affected, and will continue to affect, employment patterns and regional growth Causes of economic change Deindustrialisation and decline of traditional industrial base

  • Less manufacturing, more services and quaternary industries
  • Machines and technology replaced people
  • Lack of investment, high labour costs and outdated machinery means UK goods expensive
  • 1800 : Primary 75%, Secondary 15% and Tertiary 10%
  • Now : Primary 2%, Secondary 16%, Tertiary 73%, Quaternary 9% Globalisation • Made possible by improvements in transport, communications and internet
  • 60, 000 TNCS worldwide
  • UK characteristics : economic growth, cheaper goods and services, foreign investment, high value production, migration, less manufacturing, outsources jobs Government policies
  • 1945 – 1979 : state run industries propped up by government money
  • 1979 – 2010 : Privatisation and redevelopment of old areas
  • 2010 - : rebalancing of economy – improvement of infrastructure, investment in manufacturing, easier access to finance and encouraging global firms to locate in the UK Movement to a post industrial economy Development of ICT
  • IT manufacture of hardware and design
  • 1.3 million jobs
  • One of world’s leading digital economies Finance • Banking, insurance, securities, dealing and finance
  • 10% GDP, 2 million jobs, 29% exports
  • 50.5% based in London Research • Quaternary sector
  • 60,000 jobs and £3 billion income
  • Research in universities, private companies and government bodies Science and business parks
  • Science park : Group of scientific and knowledge based businesses based on one site e.g. Cambridge Science Park
  • More than 100 in the UK providing 75, 000 jobs
  • Business park : Cluster of businesses on the edge of towns e.g. M corridor Impacts of industry on the physical environment
  • Negative visual impact
  • Air and water pollution
  • Soil degradation
  • Landfill
  • Impacts of roads EG of how modern industry can be more environmentally sustainable CAR INDUSTRY
  • Nissan – less electricity and water used. More electric and hybrid cars build, less CO^2 emissions, 7% of energy used is from windfarms
  • Jaguar – maximise natural cooling and natural light to decrease energy use; solar panels produce 30% energy used; most waste recycled Social and economic changes in the rural landscape in ….. 1 area of population growth South East England – Hurstpierpoint , Sussex
  • Population maintained
  • Newcomers likely to start businesses
  • Keeps rural services open
  • Older people retire here increasing the average age
  • House prices increase
  • Outmigration of locals changes culture 1 area of population decline Capel Dewi – Mid Wales
  • Decreasing population leaving the eldest
  • Shops and services shut
  • Convenience shop opened by volunteers Improvements and new developments in transport Road • 2014 - £15 billion road investment strategy – 100 new roads by 2020, 1300 miles added to roads and extra lanes on motorways, Smart motorways
  • A303 Superhighway - £2 billion road widening converting road to dual carriageway Rail • Electrification of Trans Pennine Express and Midland Mainline
  • HS2 - £50 billion : London to Sheffield, Leeds and Manchester
  • London’s crossrail 2018 - £14.8 billion, 32km
  • Channel Tunnel – 346 million people in 20 years, 1. million trucks, 2.5 million cars, 58, 500 people a day Airport capacity
  • 3.6% GDP
  • 300,000 jobs
  • 750,000 international and 420,000 domestic flights
  • Recommended 3rd^ runway for Heathrow Port capacity • 2014 – Biggest were Grimsby, Tilbury, Milford Haven and Southhampton.
  • Investing : Belfast, Avonmouth, Felixstowe, Harwich
  • 37000 jobs. More through multipler effect
  • 2013 London Gateway opened for bigger ships closer to London The North South Divide North v South Cultural and regional differences
  • North : deindustrialisation, more unemployment, decreasing / slow growing population. Falling house prices. Lower wages, poorer health, poorer education
  • South : higher standard of living, better quality of life, more income, more congestion, increasing house prices Strategies used to decrease regional differences
  • Deindustrialisation in the north meant financial support from the government
  • Foreign investment encouraged in north e.g. Nissan, Mitsubishi
  • EU regional funding to decrease regional disparities
  • In 2011 24 Enterprise zones were established to encourage new businesses with decreasing rates, superfast broadband and simple planning regulations
  • 2015 : Northern Powerhouse strategy aimed to develop economies of major cities in North. Tourism, food and energy to be developed in rural areas
  • Power given to individual cities on how to raise and spend money Place of the UK in the rider world Trade • Most with EU. USA important too.
  • Increasing trade with China
  • £250 billion of exports per year Culture • TV and media exports - £1.28 billion (USA 47%, Australia and New Zealand, China 40%)
  • Migrants bought own culture – food, music, fashion, films, festivals Transport • Heathrow one of world’s busiest airports
  • Channel Tunnel and ferries to Europe
  • Southampton – cruise hub Electronic communication
  • Focus on submarine cables – 99% internet traffic uses these
  • Vital part of global economy
  • Arctic Fibre project 2016 : UK to Tokyo – 15000km
  • 90% UK population use internet – emails / social media Economic and political links EU • Migration
  • Financial support for farmers
  • Single market (trade)
  • European Structural and Investment funds for disadvantaged regions
  • Laws and controls
  • Pay more to support poorer countries Commonwealth • 53 countries – most former colonies
  • 2.2 billion people – 60% less than 30 years old
  • Advice on human rights, social and economic development and youth empowerment
  • Trading, cultural and sporting links
  • Many UK residents live in Commonwealth countries and vice versa
  • Most use English