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Richer or
Poorer?

Is the NORTH / SOUTH divide still relevant?

Gross National Product (GNP) is the value


of everything a country produces,
measured in US dollars.

GNP

Gross National Product (GNP) is


the value of everything a country
produces, measured in US
dollars.

However a countrys GNP figure is not an accurate indicator of peoples wealth.


E.g. in 2006 the UKs GNP was close to Chinas, but with a population of over one
billion, on average Chinas people are actually much worse off.
A better way is to divide each countrys income by its population.
Gross National Income per capita (per person) is the average income of
people in a country, measured in US dollars.

THE TOP 21

Gross National Income


(GNI) is the average
income per person in a
country, measured in US
dollars.

THE LOWER
MIDDLE

THE BOTTOM

No data

Even in the 1970s when this map was developed some countries did not fit the
pattern.

Today, some countries in the South have developed so rapidly that many
peoples standard of living is more like Europeans, rather than the poorest in the
world.
Which LEDCs do you think are the richest in terms of GNI

Today the World Bank classifies countries like this:

DEVELOPED

DEVELOPING

Problems with using


wealth to measure
development

It is easier to collect data in wealthy


countries so figures may be more
accurate than for poor ones.

US $1 goes much
further in some
countries than
others.

Someone living on $10 a


day would be living in
poverty in New York, but
would be quite comfortably
off in some parts of the
world.

The data only measures


products that are bought and
sold. Food grown by farmers is
an important part of production
in many developing countries,
but this will not show up in the
figures.

Many people in developing


countries work for cash so
their work is not recorded.

The figures are only an average for each country


and do not tell us about inequality there. A
wealthy Indian or Chinese may be far better off
than a poor American

As well as making people better off, development is also about improving


the quality of peoples lives.

Birth rate
% access to clean water
Infant mortality
rate

No. of
people per
doctor

Average calorie
consumption

Literacy
rate

% employed in
primary industry

Indicators of development must be measurable.

% access to secondary
education

As countries become wealthier they usually become better developed, and


people also become healthier, better educated and live longer.
As well as making people better off, development is also about improving the
quality of peoples lives.
To measure development just using a countrys income would not give the whole
picture.

The United Nations Human Development Index (HDI) is one measure of


peoples quality of life.
It gives each country a score based on its peoples average life expectancy,
education and level of wealth.

Life expectancy at birth

Literacy rate

Years spent in
school
Education including:

Income adjusted for purchasing


power (how much it will buy)
Maximum HDI = 1

GNI per capita and birth rate

What type of
correlation is this?
It is a negative correlation.
The higher the birth rate, the
lower the GNI per capita

An anomaly is a figure that does not fit in with the pattern e.g. Romania
has a lower birth rate than expected, given its low GNI

1. Why is birth rate an excellent measure of development?

2. Why is death rate a poor indicator of development?

3. Why does GNI on its own give a narrow picture?

Make sure you


can answer
these
questions

4. Why do all indicators of development mask the true picture of


development?

5. What can give us a broader picture of development?

Standard of living

Standard of living refers to


how much money people
have. It is measured in
GDP per capita. Do they
have enough money to pay
for the basics of food and
housing? Do they fall below
an income of $1 a day the
global measure of absolute
poverty?

Quality of life

Quality of life is the degree of


well-being felt by people and
includes factors such a health
and happiness. It is based on
peoples perceptions and is
therefore difficult to measure.
HDI is an attempt to measure
Q of L, based on heath (life
expectancy) knowledge
(literacy and years spent in
school) and standard of living
(GDP per capita).

The big idea is...

uneven development

Environmental factors

Political
factors

What factors are


obstacles to
development?

Social factors

Economic
factors

1. Environmental factors

NATURAL HAZARDS

UK in 1976

UK in 1976

Drought affects food and water


supplies and vegetation. It can be an
inconvenience in wealthy countries
like the UK, but in the worst affected
parts of the world like the Sahel,
drought can be a matter of life and
death.

Boscastle

Queensland, Australia

Bangladesh

Floods may cause severe


property damage in
developed countries, but
most lives are lost in the
densely populated lowlands
of developing countries. The
poorest often live in the
places most at risk.

Earthquakes and volcanoes


have less of an impact in
developed countries
because their buildings are
built to withstand shocks,
and they have better early
warning systems for
volcanoes.

2
o
o
3

(Figure rose to 26,000 people)

A lahar in Armero,
Columbia killed
22,000 people after
the eruption of
Nevada del Ruiz.
Early warnings
were ignored.

63 people died in the USA after


the eruption of Mt St Helens.
Early warning systems meant
the area was evacuated.

Hurricane Ivan hit several Caribbean countries before hitting the USA in
September 2004

What were
the effects on
Grenada?

7th September, 2004


Winds 200 km / hr
Category 4 on Saffir-Simpson scale

PRIMARY EFFECTS
Buildings damaged

Trees uprooted

Roads blocked by fallen


trees
All schools damaged
Water, power &
telecommunications
systems disrupted

SECONDARY EFFECTS
37 people died
Half the population was
made homeless

Health risk due to


lack of clean water

Loss of income

The effects on the development of Grenada


SHORT TERM

People lacked food, clean


water and medical care.

A natural disaster such


as a hurricane sets
back the development
of a country. It can take
more than 10 years to
catch up what was
destroyed by a
hurricane. Poor
countries lack the
funds and insurance
cover to help them
recover.

LONG TERM

Agriculture, tourism and the


infrastructure were badly hit,
and took a long time to repair

2. Social factors

WATER

WATER: the worlds most precious


resource

Water supplies
are unevenly
distributed
between
countries and
within them.

One in three of the worlds


population lives in a country already
suffering from WATER STRESS,
where supplies are limited
compared to the population.

By 2025 global water use is expected to rise by 40%, when the UN


expects 2/3 of the worlds population will live in countries with
moderate to high water stress.

Huge amounts of money


invested to ensure a plentiful
supply of water & reliable
sewage treatment

2.5 billion without


safe toilets

1.1 billion people


without access to
improved water.

DEVELOPED

DEVELOPING

Access worse in
rural areas.

100% access to clean


drinking water &
sanitation
Women and girls waste
hours every day collecting
water when they could be in
school or working to improve
their lives.

Unequal
access to
clean
water

Big differences in urban


areas between the
wealthy and those living
in shanty towns

URBAN

WOMEN

RURAL
72% access to
clean water in rural
areas

MEN

Better educated & more


opportunities as time not
wasted collecting water.

Water supply and health

Reduced ability
to work

Illness

Malnutrition
Low
productivity

Poverty

Clean Water

Healthy
people

Good diet

Work hard on
the land farming

How clean water can


break the
cycle of poverty
Money &
crops

High
productivity

What type of
correlations
are these?

Make sure you can


explain the link
between the
variable on the
graphs

3. Political factors

.... can have devastation impacts on


development. They can cause:

Deaths
Displaced people /
refugees

The destruction of
infrastructure roads,
power supplies and
schools, as well as
farmland and factories.

Many disputes in LEDCs


Europeans drew up
boundaries that divided
peoples, and threw local
people off their land.
E.g.

Rwanda
Kenya

Worldwide deaths directly attributable to war


or conflict in 2002

President Assad
of Syria

President Mugabe
of Zimbabwe

Colonel Gaddafi
of Libya

Corrupt politicians enrich themselves


illegally at the expense of their
countrys development. When this
happens, money is not available for
education, health services, roads,
clean water and sanitation.

In Zimbabwe, highly
productive land that was
previously owned by largescale white farmers was
taken over by war veterans.
The countrys economy has
been almost completely
destroyed and inflation has
exceeded 1000%.

Political mismanagement and corruption can slow or


reverse development in any part of the world.
Zimbabwe was once
one of the most
developed countries
in Africa. Since the
1990s it has suffered
some of the worst
setbacks in welfare
and human rights as
a result of HIV /
AIDS and poor
government.

In recent years Zimbabwe has been the worlds fastest


shrinking economy. It is an extreme example of a
government that has failed its people.

International trade is dominated by the developed


countries. They have grown wealthy through trade. Some
of the wealthiest countries club together to form TRADE
BLOCS e.g. the European Union.

There are two big problems with trade:

The
pattern
of trade

Unfair
trade

The pattern of trade is a


problem for those countries
that depend mainly on
PRIMARY PRODUCTS

Primary products tend to be lower


in price than manufactured goods.
Developing countries tend to
export primary products at a lower
price, but have to buy in
manufactured goods at a higher
price, giving them a negative
balance of trade or a TRADE
DEFICIT.
E.g. iron ore is exported more
cheaply than steel is imported.

Prices go up and down on world market and may go so low that


producers do not cover their costs.

Prices vary on the world


market depending on
supply and demand.
Overproduction forces
prices down. Prices may
go so low that producers
do not cover their costs.
It is difficult for the
producers to plan ahead
e.g. as coffee bushes take
several years to grow.

CASE STUDY

Zambia is a former British colony. In the 1960s it was


one of the richest countries in Africa. Its economy
was based solely on copper. This is called
PRIMARY PRODUCT DEPENDANCY
On gaining independence the government borrowed heavily from the
World Bank to buy a 51% share in the copper mines.
BUT the price of copper fell from 1400 per tonne in 1974, to 498 per
tonne in 1975. This meant Zambias export earning fell dramatically.
Zambia then had to borrow more money to pay the interest on its original
loans. It went further and further into debt.

How can unfair trade hold back development?

How is rice growing


in Ghana affected by
American imports?

Rice farmers in USA are


supported by government
subsidies which means
they grow more than the
USA needs.
Some of the surplus is
exported to Ghana.
International trade rules say
Ghana must allow free
access to international rice.
The rice sells for a cheaper price than
Ghanaian rice. This puts Ghanas rice
farmers out of business. Ghana now
produces only 6% of the rice it produced
20 years ago.

How has Fair Trade


helped the banana
growers of the
Windward islands?

The Windward Islands joined the Fair


Trade scheme in 2000. The buyers
pay more for Windward Island
bananas and the farmers receive and
extra $1.75 per box above world
market prices. This is a social bonus
which helps to raise the standard of
living of individual farmers and of the
community.

is a society of cocoa farmers in Ghana operating under


the Fair Trade system.
Individuals receive more money, but a portion is set

aside for community developments such as:


A water pump

Clean water

Less illness

A new school

Better education

Better jobs

KEY FACTS ON POVERTY


Nearly one billion
people entered the
twenty-first century
unable to read a
book or sign their
name
Source: www.globalissues.org/article/26/
poverty-facts-and-stats

Globally, 146
million children
are malnourished
Source: World Bank 2007

One billion
people live on
less than US$1
a day

The poorest 20%


of the worlds
population live on
2% of the global
income
Source: www.gapminder.org/

Overcoming poverty is not


a gesture of charity. It is an
act of justice. It is the
protection of a
fundamental human right,
the right to dignity and a
decent life.
Nelson Mandela

How can global


inequalities be
reduced?

Change the patterns


of world trade

Abolish
debt

How can global


inequalities be
reduced?

International aid

Increase
Fair Trade

The reduction of global inequalities.

.. will require international efforts

DEBT KEY FACTS


1970s - many banks lent money to LEDCs to
build projects such as roads, airports and
HEP plants, so that they could build up their
industries , get rich and pay back the loans.

1970s and 1980s - interest rates rose dramatically and the


LEDCs were not able to pay back the interest on the loans.
Money that should have been spent on health and education
was being spent paying back the banks. Countries had to borrow
more money to pay off the interest on the original loans.
1990s - the banks got back in debt repayments over 4x what
the British government gave out in oversees aid.

DEBT KEY FACTS


2000 - International Drop the Debt campaign. Britain cancelled
the debts owed to it by the worlds 41 most indebted countries.
However the IMF and the World Bank refused to do the same.

2005- Make Poverty History campaign targeted the G8


countries at a summit meeting in Scotland.
The three demands of the campaign were:
Trade justice
Drop the debt
More and better aid

In what ways could a country such as Ghana


develop without the burden of debt?

Without the burden of debt Ghana


and other LEDCs could invest in
education and health care to help
raise the country out of poverty

DEBT FOR CONSERVATION SWAPS

What are conservation swaps?


Swaps are agreements whereby a proportion of a countrys
debts are written off in exchange for a promise by the debtor
country to undertake environmental conservation projects.

These were first set up by


environmental groups in
the 1980s to reduce the
debt problem of poor
countries and to promote
the conservation of
important environments.

Between 1987 and 2001,


50 countries took part.

Usually areas of
valuable land are set
apart for protection,
especially tropical
rainforests.

The first swap took


place in Bolivia.
A north American
conservation group
took over $650,000
of Bolivias nation
debt in return for the
Bolivian government
setting aside a large
area of rainforest as
a nature reserve.
This frees up more
money for
investment in
education, health,
farming, water
supplies etc, which
will improve the
standard of living
and opportunities of
ordinary people.

Guatemala,
Peru, Ecuador
and Costa Rica
also took part

Aid comes in different forms ...


goods such as machinery, food and
medical supplies.
people with special skills such as
engineers, teachers and doctors.
money to buy local goods, invest in
development projects or reduce a
countrys debt.
loans for big projects (which have to
be repaid).

Money, food, goods and


services given at times of
dire need

Edible commodities
donated to needy
populations

Emergency aid

Food aid

Aid that is given by a


number of countries and
organisations, like the
United Nations and the
World Health
Organisation

Multilateral aid
Development that meets
An independent
the needs of the people
charitable organisation
today without harming the that provides aid
ability of future generations
to meet their own needs
Non-

Sustainable
development

Bilateral aid

governmental
organisation

Aid that provides support


Development projects
for a short time, sometimes that are imposed in
when there is an
people from above
immediate need

Short-term aid

Aid from one country to


another

Top-down
development

Foreign aid that must be


used in the donor country
to buy goods and service
from the country giving the
aid

Tied aid
Money collected from the
public (and sometimes
governments) by nongovernmental
organisations

Voluntary aid
Aid that provides support Development projects that
over a long period of time start and work from the
to make changes that last grass-roots level

Long-term aid

Bottom-up
development

Emergency aid helps people


recover from natural hazards
and conflicts in the
SHORT TERM

12th January 2010

Development aid aims


to improve peoples
standard of living and
quality of life in the
LONG TERM

Most aid agencies prefer


to invest in projects like
this, working with local
partners to identify what
is really needed.
If people are involved in the development of their own
community it is more likely the changes will be SUSTAINABLE

Voluntary aid comes from charities.

These are non-government


organisations (NGOs) which raise
money from the public.
They usually work closely with
communities, so aid is more effective
because it is based on local needs.

Bilateral aid is given by the


government of one country to
another. Sometimes this aid is
used for large-scale
developments such as dams,
which do not always meet the real
development needs of a country.

The Cahora Bassa dam,


Mozambique

Often this is TIED AID, as the donor governments specify


how the aid is to be used. E.g. they may sell goods or
services as part of the deal, so that much of the aid money
returns back home.

Many governments give


bilateral aid to friendly
countries for political
reasons, rather than those in
greatest need.
But governments are now
much more careful to make
sure their aid is used to
meet the needs of the
poor.

The UN sets a target of 0.7%


GNI to be spent on aid - but few
wealthy countries do so.

Multilateral aid is given by governments to international


agencies such as the World Bank, UNESCO and the WHO,
which then fund development projects. These agencies are
large organisations with lots of money to invest in
development, but are sometimes criticisesd for being out of
touch with peoples real needs.

The public are more likely


to give to emergencies,
rather than to help with
long term development
projects.

Aid can make weaker countries


dependent on stronger ones. In the
long term countries need to
develop their own trade and
industries to be self sufficient.

Sometimes food or goods sent


as emergency aid puts local
out of business, making the
problem worse in the long term.

Aid can link the rich world and


developing countries, but it
may also make some givers
feel superior.

Some aid is lost to


corrupt governments and
individuals.

Lack of infrastructure can


prevent development
happening as planned,
e.g. schools and hospitals
cannot operate without
roads and power.

The right kind of aid is essential, i.e. at a suitable scale, appropriate to the
level of technology and local culture, as well as being sustainable.

AID FROM CANADA TO TANZANIA


Bi-lateral aid

Tied aid

Top down development

7 large government farms were set up to grow wheat. Canada provided the
finance, advice and equipment. Initially this was free, but later they had to pay
for it. All spare parts had to be bought from Canada (Tied Aid).
ADVANTAGES: it made Tanzania self sufficient in wheat with a surplus left
over to export. This could help raise income to pay off debt of invest in
further development. Jobs were created on the farms. New skills were learnt.
DISADVANTAGES: it destroyed the way of life of the local nomadic farmers.
Wheat is not traditionally eater by Tanzanians, they grow maize which they
grind into flour to make bread. Wheat baked bread is too expensive for most
Tanzanians. The scheme had little impact on the ordinary Tanzanians.
Once the Canadians withdrew funding, Tanzania had to pay for spare parts
and new machinery from Canada.

AID TO SOMALIA
Bottom up development
Long term development
Voluntary Aid

NGO

After the severe drought in east Africa in the 1980s, many Somali people had
left their homes and land and moved to refugee camps where they were
supplied with emergency aid by the UNHCR. 10 years later they were still in
the camps receiving aid.
Action Aid an NGO was called in to help break the dependency on
emergency aid. They provided bottom up, long term development aid by
teaching farming skills.
Initially they taught the poorest women in the camp how to prepare the soil
and grow crops. Tools were leant out and returned each night. After the
initial success of the women, the men began to take an interest and join in.
Action Aid then helped them find land on which they could grow their own
crops.
This project was an investment in self sufficiency. It is sustainable as the
people have skills to provide for themselves. It broke the dependence on
emergency aid. It reached the people who needed help most.

1957
14

13
9
8

4
5

2
15

1
3
6
12

11

10

10 new countries
joined the EU in
June 2004.
Estonia
Latvia
Lithuania
Poland
Czech Republic
Slovakia
Hungary
Slovenia
Malta
Cyprus
2 more countries
joined in 2006
Bulgaria
Romania

What
contrasts
are there
within the
EU?

The CORE

The PERIPHERY (edge)

The core region has


some of the highest
HDI scores in
Europe.

WHY?

Biggest population

Most advanced
industries and
services

Contains the original 6


members of the EU

Wealthiest population

The best
communications

There is a long history of


trade between these
countries

The periphery
region has some of
the lowest HDI
scores in Europe.

WHY?

The periphery of Eastern Europe

The 10 countries which


joined the EU in 2004
were all allies of the
USSR until the end of
communism in 1989.
Then many of their
industries collapsed
and there was rising
unemployment.
People faced
hardships with falling
living standards and
low wages.
Parts of Eastern
Europe are also remote
and have poor
communications.

A comparison of two countries in the EU

GERMANY

BULGARIA

A positive balance of trade


(exports are of higher value
than imports)
Well established
industries e.g. iron
and steel and car
manufacturing e.g.
Volkswagen

Plenty of raw
materials e.g. coal
and iron ore

Factors
which have
made
Germany
rich

Good agricultural
land
leading
to high level of food
production

CORE region
of Europe

Good communications
with the rest of Europe

An original member of
the EU so it has strong
trading links with other
European countries.

Moderate climate with no


extremes or drought.

With the collapse of


communism many
state run industries
collapsed leading to
high unemployment.
Former communist
country and member
of USSR until the
collapse of
communism in 1989

Since joining the EU in 2004


many of the most able
workers have been
migrating west.

Factors which have


made Bulgaria one
of the poorest
countries in
Europe

Steep slopes and poor


soils in the Rhode
Mountains makes farming
difficult

PERIPHERY region of
Europe

Isolated. Poor
communication links
with the rest of Europe.

Few raw materials


therefore not a strong
base for industry.

Negative balance of trade imports greater in value than


exports

How can the


EU close the
gap in
development?

The Common Agricultural Policy (CAP)

The CAP includes a system of subsides paid to EU farmers. Its main purposes are to:
guarantee minimum levels of production so that there is enough food for Europes
population.
ensure a fair standard of living for farmers.
ensure reasonable prices to customers.

The CAP guarantees the survival of rural communities, where


more than half of EU citizens live.

The Urban II fund


This fund is for SUSTAINABLE
DEVELOPMENT in troubled
districts of European cities.
It aims to provide economic and
social regeneration .
Any successful idea in one city
is shared with others to try to
improve living conditions as
widely as possible.

The EIBs money comes from


the members who own it.
They contribute according to
their size and wealth.

Its main purpose is to invest in regional


development. Some regions are
suffering because of the decline of local
industry or reduced farm incomes.
Projects are usually locally based
and funds are used to train people
with new skills and to help set up
new businesses

Structural Funds
Structural funds support poorer
regions of Europe and improve
infrastructure, particularly transport
because that enables the economy
to work more efficiently.

Regions whose GDP per capita is


less than 75% of the EU average are
targeted. The aim is to accelerate
economic development so they catch
up with other regions.