3.2.2 The Changing Economic World — Topic Overview
This topic examines global economic inequality, how countries develop, and the economic changes taking place in both LICs/NEEs and HICs (including the UK).
Measuring development
Development: an improvement in the economic and social conditions of a country. Indicators:
- Economic: GDP per capita, GNI per capita
- Social: life expectancy, infant mortality rate, literacy rate, HDI (Human Development Index — composite measure)
- Other: access to clean water, doctors per 1000 population
No single indicator tells the whole story — HDI combines GDP, education and life expectancy.
The development gap
There is a large and persistent gap between HICs (high-income countries) and LICs/LDCs. Causes: colonialism (resource extraction, economic dependency), trade inequalities (commodity prices volatile; processed goods earn more), debt, corruption, climate and geography.
The Rostow model (5 stages of growth) and dependency theory offer contrasting explanations for the development gap.
Newly Emerging Economies (NEEs)
NEEs (e.g. China, India, Brazil, Nigeria) are experiencing rapid economic growth. Nigeria case study: oil wealth; growing middle class; BUT inequality, corruption, environmental damage (Niger Delta).
Tourism as a pathway to development
Tourism can bring economic benefits (foreign exchange, jobs) and social benefits (improved infrastructure). Downsides: leakage (profits leave to foreign companies), seasonality, environmental damage. Ecotourism tries to minimise negative impacts.
UK's changing economy
Post-industrial transformation: manufacturing declined (de-industrialisation from 1970s); service sector now dominant (finance, tourism, creative industries). Regional inequality in the UK: north-south divide — wealth concentrated in London and south-east.
Challenges: ageing population, Brexit impacts, need to rebalance the economy, infrastructure investment (HS2, Northern Powerhouse).
Exam focus
- Compare at least two development indicators; explain limitations
- Apply Rostow's model to a NEE
- Evaluate strategies to reduce the development gap (aid, trade, debt relief)
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