Strategies to Reduce the Development Gap (AQA GCSE Geography)

Strategies to Reduce the Development Gap

• Strategies used to reduce the development gap include:

  • Investment:

    • Where countries and TNCs invest money in LICs, which provide employment and income

    • Example: Chinese companies investing in Africa (mainly energy, mining, construction and manufacturing)

  • Industrial development:

    • Brings employment, higher incomes and opportunities to invest in housing, education and infrastructure

    • This has a multiplier effect

    • Example: China’s move away from agriculture to manufacturing made it one of the fastest-growing economies in the world

  • Freetrade:

    • This is top-down approach where countries do not charge tariffs and quotas between themselves; this encourages trading free of taxes and charges and can be beneficial to LICs

  • Tourism:

    • Some countries have become tourist destinations

    • Which leads to investment and increased income 

    • Infrastructure is improved and direct and indirect jobs created

    • Tourism can become vulnerable during a recession

  • Aid:

    • Countries or non-governmental organisations (NGOs such as Oxfam) donate resources to a country to help or improve people’s lives

    • Aid can take the form of money, emergency supplies, food or technology, or specialist skills. For example, the UK has given £350million to Pakistan, which has been spent to improve education facilities

    • Aid can fund major infrastructure projects such as the Inga 3 Dam in the Democratic Republic of the Congo. This helps reduce the development gap through investing in development projects

    • The focus is usually on health care, education and services. For example, Goat Aid helps families buy goats, which produce milk and meat

  • Intermediate technology:

    • This is where suitable/appropriate and sustainable projects, equipment and ideas are used

    • These are fitted to the needs and wealth of a local community 

    • Example: Micro-hydro for the remote villages of Nepal, which the community build and maintains/repairs

    • Provides enough electricity to improve life for the villagers: enables children to study at night, families to watch TV and use mobile phones and the internet

  • Fairtrade:

    • International movement that helps producers in poor countries get a fair deal by setting standards for trade 

    • Farming is done in an environmentally friendly way

    • The product has a better position in the global market

    • Part of the end price is invested back into the local community and future development projects

    • Example: Over 90% of small coffee farmers in eastern Uganda have joined the Gumutindo Coffee Cooperative, which allows the coffee to be milled before roasting, which adds value to the coffee and increases the farmer's income

  • Debt relief:

    • Many LICs borrowed money to develop their economies during the 1970s and 1980s

    • Some of these countries have fallen into serious debt and are unable to pay back these loans because of the high rates of interest

    • In 2006, the International Monetary Fund (IMF) agreed to cancel the debts of 19 of the world’s poorest countries 

    • This money saved in debt can now be used for development projects such as industry, resources and infrastructure

    • But corrupt governments may keep money

    • Example: Ugandan government has spent money to provide safe water to over 2 million people

  • Microfinance loans:

    • Small-scale financial support for small start-up businesses and usually aimed at women to help them to become more self-sufficient

    • Example: Grameen Bank, Bangladesh was set up in 1976 to help local women use their skills to develop small businesses. Initially the bank lent women money to buy mobile phones, which the women then charged villagers to use the phone, giving them a small profit but also enough to repay the loan 

Case Study: Jamaica

Background:

• Location: West Indies

• Population: 2.93 million

• Main industry: manufacturing of minerals (bauxite & oil), agricultural production (rum and sugar)

• The location is suited to tourism because of its warm climate, beaches and rich cultural heritage

• Jamaica has used tourism to close its development gap

Economy:

• Tourism accounts for 34% GDP in 2019 (before Covid)

• Earns £2 billion a year in tourist revenues

• Is the largest source of foreign exchange

• Development has also led to improved infrastructure: (roads, power, etc.) and environmental conservation through ecotourism and national parks with entry fees to pay for the conservation

Employment:

• Employs 300,000 people directly and indirectly 

• Direct: Jobs in hotels, transport & tourist attractions

• Indirect: Jobs in shops, restaurants, manufacturing and banking

• Multiplier effect: Help boost the economy through local spending in shops and on services

• Closes the gap with skills development helping locals find future employment

Infrastructure:

• Investments are centred at tourist hotspots

• The north coast saw new port and cruise liner facilities, together with new hotel accommodations being built

• Which attracts other foreign investors to the area (e.g. tour operators)

• Narrows the gap as more tourists are attracted to the area, which generates more jobs, which in turn boosts the economy

Quality of life:

• In northern tourist areas (Montego Bay and Ocho Rios), wealthy Jamaicans have a high standard of living

• Large numbers of people still live in poverty, with poor housing, limited food supply and inadequate access to fresh water, health care and education

• 25% of hotel workers are laid off during the low season with no income to support them from May to November

Environment:

• Disadvantages: Footpath erosion, excessive waste and use of water, harmful emissions

• Advantages: Conservation & landscaping, water treatment to reduce pollution from hotels, ecotourism developments: Raft trips to the Rio Grande River, where tourists are in small groups on manpower boats to reduce the environmental impact