The changing economic world

Welcome to the Changing Economic World!

Hi there! In this chapter, we are going to explore why some countries are very rich while others are still struggling. We’ll look at how we measure "success," why the gap between countries exists, and how we can help close it. Finally, we’ll see how the UK’s own economy is changing from factories to high-tech offices. Don’t worry if some of the terms seem big at first—we’ll break them down piece by piece!

1. How do we Measure Development?

Development means how "advanced" a country is. It’s not just about money; it’s about how long people live and how much they learn. Geographers divide the world into three main groups:

• HICs (High Income Countries): Wealthy countries like the UK or USA.
• LICs (Low Income Countries): Poorer countries like Chad or Ethiopia.
• NEEs (Newly Emerging Economies): Countries getting richer quickly, like Brazil, India, or Nigeria.

The Toolkit: Development Indicators

To see how developed a country is, we use "indicators." Think of these like a school report card for a country.

• GNI per head: The total income of a country divided by its population. It's like the country's average "paycheck."
• Birth Rate: How many babies are born per 1,000 people. (Usually higher in LICs).
• Death Rate: How many people die per 1,000 people.
• Infant Mortality: How many babies die before their 1st birthday. This shows how good the hospitals are.
• Life Expectancy: How long the average person is expected to live.
• Literacy Rate: The percentage of adults who can read and write.
• HDI (Human Development Index): This is the "Gold Standard." It combines Wealth (GNI), Health (Life Expectancy), and Education into one number from 0 to 1.

Quick Review: Why is GNI per head sometimes misleading? Because it's an average. If one person has a billion dollars and 99 people have nothing, the average says everyone is rich! This is why we use HDI to get a fairer picture.

2. The Demographic Transition Model (DTM)

The DTM shows how a country’s population changes as it develops. It has 5 stages:

• Stage 1: High birth and death rates (Very few places left here).
• Stage 2: Death rate drops (better medicine), but birth rate stays high. Population explodes! (LICs).
• Stage 3: Birth rate starts to fall as people use contraception and kids become expensive. (NEEs).
• Stage 4 & 5: Low birth and death rates. Population stays steady or starts to shrink. (HICs).

Key Takeaway: As a country gets richer, its population growth usually slows down because families choose to have fewer children.

3. Why is Development Uneven?

Why isn't every country a HIC? It usually comes down to three "bad luck" factors:

Physical Causes

Some countries are landlocked (no coastline for trade). Others suffer from extreme weather (floods or droughts) or tropical diseases like Malaria that stop people from working.

Economic Causes

Many LICs sell primary goods (like cocoa or coal) which are cheap. HICs sell manufactured goods (like cars or phones) which are expensive. This keeps the wealth in HICs.

Historical Causes

Colonialism: In the past, powerful countries took resources from poorer ones, leaving them with nothing to build their own economy. War also destroys roads, schools, and hospitals.

Did you know? Landlocked countries (like Bolivia or Nepal) develop much slower because it costs a lot more money to transport goods through other countries to reach the sea.

4. Reducing the Development Gap

How do we fix this? Here are the main "bridge-builders" to close the gap:

• Investment: Big companies (like Apple or Shell) build factories in LICs/NEEs, creating jobs.
• Industrial Development: Moving from farming to manufacturing creates more wealth.
• Tourism: People from HICs spend money in LICs (like Kenya or the Caribbean), providing income.
• Aid: Money or resources given by one country to another.
• Fairtrade: Ensures farmers in LICs get a fair price for their crops (like coffee or bananas) so they can afford school and medicine.
• Intermediate Technology: Simple, affordable tools that locals can fix themselves (e.g., a hand-powered water pump).
• Microfinance Loans: Small amounts of money lent to poor people to start tiny businesses.

Memory Aid: For Intermediate Technology, think of it as "The Goldilocks Tech"—not too high-tech (too expensive), not too low-tech (too slow), but just right for the local people.

5. Case Study: A Newly Emerging Economy (Nigeria)

Nigeria is a great example of an NEE. It is located in West Africa and is the "Giant of Africa" because of its huge population and economy.

• Industrial Change: Nigeria used to rely on farming (Primary). Now, it sells Oil and has a growing Manufacturing sector (Secondary).
• TNCs (Transnational Corporations): Companies like Shell operate there.
  Pros: They provide jobs and pay taxes to the government.
  Cons: They can cause environmental damage (oil spills) and take profits back to their home country.
• International Aid: Nigeria still receives aid to help with health (fighting HIV/Malaria) and education.
• Environmental Impact: Rapid growth has led to air pollution in cities and water pollution from factories.

6. The UK’s Changing Economy

The UK has gone through a massive "makeover" in the last 50 years.

Causes of Economic Change

1. De-industrialisation: Factories closed because machines took over and it became cheaper to make things abroad.
2. Globalisation: We now trade with the whole world easily via the internet and fast shipping.
3. Government Policies: The government encouraged "Business Parks" and high-tech industries.

The Post-Industrial Economy

Today, the UK is a Service-based economy. Most people work in:

• Tertiary Sector: Retail, entertainment, and finance (Banks).
• Quaternary Sector: High-tech research, IT, and Science Parks (usually near universities like Cambridge).

The North-South Divide

In the UK, the South (London/South East) is generally wealthier and has higher house prices than the North. Don't worry—the government is trying to fix this by:

• Building HS2 (a high-speed railway to connect the North and South).
• Investing in the "Northern Powerhouse" to boost northern cities like Manchester and Leeds.
• Improving Motorways and Ports to help northern businesses trade.

Quick Review: \( \text{De-industrialisation} = \text{Less Factories} \)
\( \text{Post-Industrial} = \text{More Offices, Tech, and Research} \)

Final Summary Takeaways

1. Development isn't just money: Use HDI to see the whole picture.
2. The Gap is complex: It's caused by history, geography, and trade.
3. TNCs are a mixed bag: They bring jobs but can also cause pollution.
4. The UK is evolving: We've moved from "making things" to "knowing things" (the Quaternary sector).