The changing economic world

In this section you are required to study all the themes.

There are global variations in economic development and quality of life. Different ways of classifying parts of the world according to their level of economic development and quality of life:

• LICs — lower income countries, with the lowest incomes and standards of living • NEEs — newly emerging economies, where rapid industrial growth is raising incomes quickly • HICs — higher income countries, with high incomes and standards of living

Older classifications such as "first world and third world" or a simple north–south divide are still met but are crude, because they put countries with very different conditions in the same group and cannot show change over time.

Limitations of economic and social measures. This is examined directly and is worth learning as a set of arguments rather than a list:

• A single measure shows only one aspect of development, so it can be misleading on its own. • Averages hide inequality. A country's GNI per head can be high because a small number of people are very rich, while most are poor. • Data may be out of date, or unreliable where a country lacks the money and systems to collect it accurately. • Data may be inaccurate in countries with large informal economies, where much work goes unrecorded. • Money measures ignore quality of life — freedom, safety, environment and happiness are not counted. • Exchange rates make comparing incomes between countries difficult, because the same money buys different amounts in different places.

HDI addresses several of these by combining three measures, but it still uses averages, so it still hides inequality within a country.

Link between stages of the Demographic Transition Model and the level of development. The DTM describes how birth rates, death rates and total population change as a country develops, and its stages map onto levels of development.

The reasoning behind the model, which is what an explain question wants:

The death rate falls first, in stage 2, because clean water, better food supply, sanitation and medicine save lives quickly. The birth rate stays high for a while because attitudes to family size take a generation to change, and in a farming economy children are useful workers and provide security in old age. That gap between a falling death rate and a still-high birth rate is why population grows fastest in stage 2 — not in stage 4, where the population is highest but stable.

The birth rate then falls in stage 3 as more women are educated and work, contraception becomes available, infant mortality falls so families no longer need many children for some to survive, and children become a cost rather than an economic asset.

Causes of uneven development fall into three groups, and the specification names all three:

Physical • A poor climate — too dry, too wet or too unpredictable for reliable farming • Few natural resources to sell, or resources that are hard to reach • Being landlocked, so trade must pass through other countries • Frequent natural hazards, which destroy the gains made between events • Prevalence of disease, which reduces the working population

Economic • Relying on exporting primary products such as crops and raw materials, whose prices are low and unstable • Trade rules that favour wealthier countries • Debt, where repayments consume money that could be spent on development

Historical • Colonisation, which took resources out of countries and left borders and economies shaped for others' benefit • Conflict, which destroys infrastructure, deters investment and displaces people

Consequences of uneven development:

• Disparities in wealth — large differences in income and standard of living between countries and within them. • Disparities in health — differences in life expectancy, infant mortality and access to doctors and medicine. • International migration — people move from poorer to richer countries seeking work, safety and services. That relieves unemployment in the origin country and money is sent home, but it also removes skilled workers, which is a further brake on development.

You need an example of how the growth of tourism in an LIC or NEE helps to reduce the development gap. Use the country your school studied, and be ready to say what attracts visitors, what the income is spent on, and what the drawbacks are — because these questions almost always ask you to weigh both.

The specification names the *type* of case study, never the place — your school chose which. The worked example below is one in common use; if your school taught a different one, use theirs and keep the same structure, because the structure is what the marks are for.

Some LICs and NEEs are experiencing rapid economic development which leads to significant social, environmental and cultural change.

You need a case study of one LIC or NEE. This is the largest case study in the specification, and it has eight required elements — so the most useful thing is to check your own case study against the list rather than to read about a different country.

Types of aid, which the specification asks for by name:

• Short-term or emergency aid — given immediately after a disaster: food, water, shelter and medicine. • Long-term or development aid — sustained support for schools, clinics, water supplies and training. • Bilateral aid — given by one country directly to another, sometimes with conditions attached. • Multilateral aid — given through an international organisation to which many countries contribute. • Tied aid — given on condition that the receiving country buys goods or services from the donor.

Impacts on the receiving country: aid can build infrastructure, improve health and education and save lives after a disaster. But it can create dependency, may not reach the poorest if there is corruption, tied aid may benefit the donor more than the receiver, and projects can fail if local people are not involved in running them.

Major changes in the economy of the UK have affected, and will continue to affect, employment patterns and regional growth.

Causes of economic change: • De-industrialisation and the decline of the traditional industrial base — coal, steel, shipbuilding and textiles shrank as they became uncompetitive. • Globalisation — goods could be made more cheaply abroad, and companies moved production overseas. • Government policies — decisions on subsidies, privatisation and investment shaped which industries survived.

Moving towards a post-industrial economy means the economy is now dominated by services rather than manufacturing. The specification names the growth areas: development of information technology, service industries, finance, research, and science and business parks. Science and business parks are typically built on the edge of cities near motorways and universities, so they can attract skilled staff and work with researchers.

Impacts of industry on the physical environment. Industry uses land, consumes energy and raw materials, produces waste, and can pollute air, water and soil. You need an example of how modern industrial development can be more environmentally sustainable — typically through energy-efficient buildings, renewable energy on site, recycling waste and water, reducing transport emissions, and landscaping that creates habitats. Use your school's example and give its actual features.

Social and economic changes in the rural landscape, in one area of population growth and one area of population decline. Both are required, and they are opposites:

• An area of population growth — usually within commuting distance of a city. House prices rise, new housing is built, schools and services may expand, but traffic and pressure on the countryside increase and local people can be priced out. • An area of population decline — usually remote. Young people leave for work, so the population ages; shops, schools, bus services and post offices close as demand falls; house prices may fall or be sustained only by second homes; and farming may struggle.

Improvements and new developments in road and rail infrastructure, port and airport capacity. Investment in motorways and major roads, in rail including high-speed lines and electrification, in expanding port capacity for container shipping, and in additional airport capacity. The argument for each is the same shape — better connections attract investment, create jobs and speed the movement of goods — and so is the argument against: high cost, disruption during construction, loss of countryside, noise and emissions.

The north–south divide is the gap in wealth, employment, health and life expectancy between the south east of England and much of the north. Strategies used in an attempt to resolve regional differences include: government grants and enterprise zones to attract businesses to poorer regions; transport investment to improve connections; devolving power and funding to city regions; and investment in universities, research and training.

The place of the UK in the wider world. Links through trade, culture, transport and electronic communication, and economic and political links through the European Union and the Commonwealth.