Essay on Poverty and Development Gap

Submitted By Felda123
Words: 4057
Pages: 17

Topic 5: Bridging the Development Gap

What do I need to know? * How the development Gap can be measured * Theories on why the gap exists * The role of different Key players on development * General physical, economic, political and social causes of the gap * Role of trade and investment in the development gap * Social, economic and environmental impacts of the development gap * Impacts on minority groups * Impacts on Megacities * The positive and negative impacts of countries trying to close the gap on migration and the environment * Theoretical ways of reducing the development gap * The advantages and disadvantages of methods of closing the development gap

Key Terms: Aid | Refers to gifts or repayable loans made by one country to another | Apartheid | Meaning segregation, used to describe a political and legal system used in South Africa to separate different ethnic groups | Bilateral aid | Foreign aid (in the shape of money, expertise, education or technology) from a single donor to a country | Bottom-up development | Occurs at a community level – people’s needs are indentified and local projects are designed to meet them | Capital-intensive | High-cost industries such as mining where machines do most of the work and few jobs are created | Debt service | Payments of interest, plus a proportion of the original loan, which are required in order to pay back a debt over a given period of time | Development | Means ‘change’ and implies change is for the better | Development gap | The social and economic disparity between the wealthy and the poor | Formal economy | The economy that is regulated by the state so is taxed and monitored by the government. | Gross Domestic Product (GDP) | The value of goods and services produced in a country over a year. | Gross National Product (GNP) | Like GDP but includes overseas investment such as shares and earnings for overseas companies and branches. | Human Development Index (HDI) | Created by the UN to provide a measure of life expectancy, education and GDP for every country in the world. | Informal economy | All economic activities that are neither taxed or monitored by the government | Investment | Refers to repayable loans used to develop a country but with an expectation of a share of the profits e.g. when TNCs invest in a factory | Millennium Development Goals (MDGs) | Agreed at the UN summit in 2000, 8 goals were agreed to provide a set of development goals for the world to reach by 2015 | Multilateral aid | Aid given from alliances for several countries or organisations to another | Multiplier Effect | An effect in economies in which an increase in spending produces an increase in the national income and consumption greater than the amount originally spent | Neo-liberalism | Idea that market exchange is capable of acting as a guide for all human action. State interventions are minimized including the obligations for the state to provide for the welfare of its citizens | Out-sourcing | The employment of people overseas to do jobs previously done by people in the home country | Per capita | Per person | Purchasing Power Parity (PPP) | Shows what per capita income will purchase when the cost of living is taken into consideration | Structural Adjustment Programmes (SAP) | Re-scheduling loans to make them more affordable | Tied Aid | Where foreign aid benefits the donor in the shape of interest repayments, access to new markets or political allegiance. | Top-down development | Development projects are made by governments or large organisations | Trade liberalisation | Also known as ‘free trade’, removing barriers such as duties or customs |

How the development Gap can be measured * Gross Domestic Product – total value of goods and services produced by a country in a year. Does not take into account the way in which the cost of living may vary between countries. Also only…