3.1 Development

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Use a variety of indicators to assess the level of development of a country.

Development Indicators

  • Gross National Product (GNP): the total value of goods and services produced in the country in the year plus any income earned by residents from overseas investments, minus income earned within the domestic economy by overseas residents.
  • Crude birth rate: the number of live births per 1000 of the population.
  • Crude death rate: the number of deaths per 1000 of the population.
  • Infant mortality: number of deaths of babies before reaching 1 year/ 1000 live births.
  • Adult literacy rate: the % of adults able to read & write.

Human Development Index (HDI)

This is a composite index that aims to take into account both economic and social factors to give a single value. Its component factors are:

  • Life expectancy index: how long an individual is expected to live at birth
  • Education Index: mean years spent in school and mean years expected to be spent in school
  • Income Index: GNI per capita PPP. Life expectancy index, Education index and Income index.

Established by the United Nations and gives a score between 0-1 (0 being poor & 1 being very high). It is generally regarded as giving a better indication of development but still has some limitations. Statistics are often hard to come by and many other important considerations are omitted (such as impact on the environment).

Importance in measuring disparities

– Allows comparisons between countries and aid/assistance to directed to where it is most needed.

– Can highlight strategies that are not working for countries (infrastructure developments, trade deals,

education).

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Identify and explain inequalities between and within countries

Inequalities between Countries

Distinct disparities in the levels of development between countries are evident. Geographers refer to MEDCs (More Economically Developed Countries) and LEDCs (Less Economically Developed Countries) and maps such as the Brandt North-South Divide have tried to highlight the divisions.

Such a clear division is becoming outdated as the distinct difference between the developed and developing countries becomes more blurred. Many Latin American and Asian countries have been industrialising and rapidly developing over the last few decades. GNP in them has been rising, death rates and birth rates falling and general standards of living increasing.

Causes of Inequalities

Inequalities in development exist between countries for various reasons. Some of the main factors are:

  • Resources and raw materials: some countries have been fortunate to have valuable resources which allowed then to develop or trade. In the past, the UK used its iron ore and coal reserves to industrialise and become one of the main manufacturers of the world. Currently, Saudi Arabia and other Middle East countries have become rich through exporting oil.
  • Physical geography: countries with areas of relatively flat land and fertile soil have been able to produce large quantities of food, expand their populations and export the rest for profit. Other countries have mainly steep rocky terrain that is difficult to build on, farm or develop transport networks.
  • Climate: countries with extremes in climate often have limited natural resources available. Sudan is mainly desert, Greenland is mainly ice-covered.

Inequalities within Countries

Most countries have some significant inequality between residents. There are often differing living standards

between urban and rural residents. Urban areas tend to have more investment in infrastructure and public services, but can suffer from overpopulation. Within urban areas vast inequalities often exist. The favelas of Brazilian cities or the slums in Indian cities are good examples.

Inequalities within countries often exist for different reasons.

  • Ethnicity: in many countries ethnic minorities are often discriminated against in economic, political & social senses.
  • Residence: people living in slums are often restricted from formal jobs, bank loans & suffer discrimination.
  • Employment: large disparities in income & living standards between employed & unemployed people, but also between formal & informal sectors (even in MEDCs).
  • Land ownership: owners of land can sustain themselves (subsistence farming) and often produce to sell and raise their income level.

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Classify production into different sectors and give illustrations of each.

Industrial Classifications

In any country, we can categorise production into three or four main industries:

Primary sector– these are the firms that draw or extract natural resources from the earth. This may be as varied as coal mining or fishing, corn growing or oil drilling.

Secondary sector – these are the firms involved in turning natural resources into finished products. This may vary from car production to packaging. They manufacture the goods.

Tertiary sector – firms in this sector provide the retail outlet for the finished products or provide a service for the customer. This may range from shops on the high street to teaching.

Quaternary sector – firms in this sector are usually involved in intangible services such as research and development.

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Describe and explain how the proportions employed in each sector vary according to the level of development.

Primary Industries

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Developing countries typically have higher proportions of their labour force employed in primary sector industries, whereas developed countries have very small proportions employed in them.

These industries often require few educational qualifications to enter, have low capital input requirements and the products can be sold easily. Many people in developing countries work in agriculture, fishing, forestry and mining. Relatively cheap labour costs have kept mechanisation low and therefore many people can be employed.

Developed countries, on the other hand, have high labour costs and have mechanised most of the processes. This results in very low labour employment, but there is high output in these industries.

Secondary industries

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Developed countries have traditionally had large secondary industry sectors. In recent decades, there has been a drastic decline in manufacturing in developed countries. Globalisation, containerisation and stricter environmental regulation have resulted in a significant shift of secondary industries to developing regions such as

East Asia and Latin America. These countries have become classed as NICs (Newly Industrialised Countries).

The secondary industries that still exist in the more developed countries tend to be more high tech and specialised with high-profit margins.

Tertiary Industries

banking

These are predominantly found in developed countries which have service based economies. Large public sector workforces (education, health, military, social services and administration), the development of IT service sectors (software support, social media platforms) and financial services dominate many developed economies. These industries tend to generate high profits and pay well.

Tertiary industries found in developing countries are often linked to tourism and provide many jobs, but which are often low paying.

Global outsourcing is slowly enabling the development of high-tech tertiary industries to develop in many other countries, India and the Philippines are good examples where call centres, research and development centres and software programming are becoming established.

 

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Describe and explain the process of globalisation, and consider its impacts.

Globalisation

Globalisation is the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders (IMF definition).

Several factors have led to the rapid globalisation that has occurred in the last 50 years:

  • Containerisation: the concept of transporting goods in stackable steel containers which can quickly be loaded and unloaded on boats, lorries and trains transformed global trade. Through economies of scale, it has reduced the cost of transporting goods enormously. The result of this is that goods can be manufactured in countries with cheaper labour costs and abundant raw materials, then shipped to the markets where they are sold. The emergence of China, Taiwan, the Philippines and other Asian countries as the manufacturing workshops of the world are largely based on the container revolution.
  • ICT developments: the internet has completely transformed communication and the way that many businesses operate. Instant communication, digital products and global outsourcing have led to significant integration of economies.
  • TNCs (Trans National Companies): These have emerged largely on the back of the previous two factors. These companies have operations in multiple countries around the world and have become increasingly financial powerful and politically significant. Global supply chains and often many thousands of workers in different continents mean that their actions have global significance. Companies such as BP, Apple, IBM, Toyota are examples.

Impacts of Globalisation

Globalisation has resulted in both positive and negative impacts. Some of the main ones are:

Employment

Many developing countries have benefited from large-scale employment. The relocation of manufacturing and the outsourcing of services to cheaper labour markets has created many jobs. Whilst this has raised the income for many families the jobs are often low paid, require long hours of work and have poor working conditions. The creation of jobs in developing countries has been at the expense of many jobs in developed countries.

Environment

Many concerns exist regarding the damage being done to the environment in developing countries. Weaker environmental regulation and a lack of ability to enforce the laws has resulted in significant pollution. Oil contamination of the Niger delta, soil pollution in many parts of china, oil and toxic waste pollution in Bangladesh from ship dismantling are examples. Currently, e-waste is a big concern as it is sent from developed countries to developing ones to be recycled with little regulation.

Trade

Globalisation has resulted in large increases in international trade, bringing consumers a much wider range of products at lower prices. The downside of this is increased air pollution from all the ships, planes, trains and lorries that move the goods around the world.

Digital products and services such as iTunes, Amazon, Netflicks and so on have enabled global access to mu-
sic film and media. Concerns about the impact this has on national cultures exist.

Case Study: McDonalds

Established in 1940 McDonalds focuses on selling burgers, fries/chips, soft drinks & shakes. Its success is rooted in its adoption of factory production line principles which allowed fast service and low costs. It business model of franchising restaurants has seen it rapidly expand worldwide, currently in over 100 countries and with over 30 000 outlets.

It retains its initial key products and is still marketed as low-cost fast food. It has adapted some of its menus to accommodate changing perspectives of healthy food and introduced McCafes in most stores.

Its expansion worldwide has seen it respond to local cultures and adapt its products to suit these tastes.

McDonalds is often cited as one of the most obvious symbols of globalisation and diffusion of culture, occupying high street locations and having distinctive branding.

More recently the company has established a presence in India. This huge potential market was more of a challenge due to the sacredness of cows. The burgers are mainly chicken or vegetarian and have many spiced options on the menu. The company has had to establish local supply chains for products such as lettuce which did not exist before.