Economic Development in an LIC or NEE Flashcards
All 22 cards in this deck
What is meant by the social and cultural context of a country?
Its people's ethnic groups, languages, religions and traditions, and any tensions between them.
True or false? A country's political context includes how stable its government is.
True. A stable, democratic government encourages investment.
Name the four sectors of the economy.
Primary, secondary, tertiary and quaternary.
How does the balance between economic sectors typically change as an LIC/NEE develops?
The primary sector shrinks while the secondary (manufacturing) and tertiary sectors grow.
What is the multiplier effect?
When one industry grows it creates jobs and stimulates connected industries in the supply chain, causing further growth.
Give two ways manufacturing industry stimulates economic development.
It adds value to products, and it creates paid jobs so workers pay taxes the government can invest in services.
What is a transnational corporation (TNC)?
A company that has operations in more than one country, usually with its headquarters in an HIC.
What is Foreign Direct Investment (FDI)?
Investment made by a foreign company or country into industry and infrastructure in the host country.
Give two advantages of a TNC to the host country.
Direct and indirect employment, which raises disposable income, and tax payments that increase government revenue for infrastructure and services.
Give two disadvantages of a TNC to the host country.
Environmental damage such as pollution of land, water and air, and most profits being sent back to the TNC's home country.
Give two ways trading relationships of LICs/NEEs have changed since independence.
They now choose their own trading partners and join regional trade blocs, and some have become major service providers rather than only raw-material suppliers.
What is tied aid?
Aid given on condition that the receiving country spends it with, or buys goods from, the donor country.
Give two positive impacts of international aid on a receiving country.
Funding for education, clean water and sewerage or disease prevention, and improvements to infrastructure or farming techniques.
True or false? All international aid benefits the receiving country.
False. Aid can be tied, lost to government corruption, or spent unwisely.
Give two negative environmental impacts of economic development in an LIC/NEE.
Increased carbon emissions and poor air quality, and habitat destruction from resource exploitation such as oil spills.
How can weak enforcement of safety laws harm the environment during economic development?
Industrial accidents and leaks contaminate land and water, e.g. a mercury spill from a factory.
How does rapid urban growth linked to economic development damage the environment?
It creates large waste dumps and vehicle exhaust pollution in poor-quality urban areas.
Give two ways economic development improves quality of life.
Higher incomes let people spend more on food, housing and schooling, and tax revenue funds sanitation and services.
True or false? Economic development can improve quality of life and damage the environment at the same time.
True. Incomes and services improve while pollution, habitat loss and emissions increase.
What is the difference between short-term (emergency) aid and long-term (development) aid?
Short-term aid gives immediate relief after a disaster, such as food, shelter and medical supplies. Long-term aid funds lasting improvements, such as schools, clean water or farming projects.
What is the difference between top-down and bottom-up aid projects?
Top-down projects are large-scale and planned by governments or big organisations. Bottom-up projects are small-scale and run with local communities, who help decide what is needed.
Why do many TNCs place their factories in LICs or NEEs?
Labour and land are cheaper, and environmental and working regulations are often less strict, so production costs are lower.