Tackling the Development Gap (Edexcel IGCSE Geography)
Revision Note
Written by: Bridgette Barrett
Reviewed by: Jenna Quinn
The World Trade Organisation
Strategies to solve the development gap
There is no one solution to the development gap
There is often a dispute as to whether trade or aid is better for development
Countries around the world contribute differing amounts to international development in the form of aid
The World Trade Organisation (WTO)
Trade is one solution with the idea that if countries can trade more effectively their wealth will increase and they can invest in the development
The aim of the WTO is to help its members use trade as a means to raise living standards, create jobs and improve people's lives
Developed countries and the largest economies dominate the WTO
Developing countries do not always have the same access to markets as developing and emerging countries
The benefits of trade are not always shared amongst the population. In India and China, the gap between the wealthy and those living in poverty is widening
Developing country's main exports are usually primary goods and these do not create the same profits as manufactured products
Debt Relief
Many developing and emerging countries owe money to other countries
Repayments and interest are so expensive they do not have money left to spend on development
Debt relief reduces the payments so that money can be used to on development. For example, improvements in infrastructure, education, healthcare
Debt relief can also mean that the debts are written off
In 1996 the Heavily Indebted Poor Countries (HIPC) initiative was launched which aimed to ensure that no country faces a debt burden it cannot manage
In 2005 as part of the Sustainable Development Goals (SDGs) the Multilateral Debt Relief Initiative (MDRI) was added to supplement the HIPC and allowed for 100% debt relief on any money owed to the IMF, World Bank or African Development Fund (AfDF)
Fair Trade
Approximately 5 million people benefit from Fair Trade
The Fair Trade system works with over 1.9 million farmers in 73 countries
In 2020 £169 million was paid in Fair Trade premiums
Fair Trade items now range from coffee to footballs
Microcredit
Microcredit refers to loans given to people to start a small business
The loans are generally small US$100-500 to start with but can be increased as a business grows
Usually they are given to people on very low incomes who would not get a bank loan
Interest rates are very low or in some cases, the loan is interest-free
Worked Example
Outline two ways in which the development gap can be reduced
(4 Marks)
You need to give two methods and then explain each one to achieve all four available marks
Answer
Debt relief can be used to reduce or remove any payments owed to other countries (1); the money can then be used to invest in infrastructure developments/education/healthcare(1)
Fair Trade ensures that people receive a fair price for the goods they produce (1); the additional money can then be spent on healthcare/education/infrastructure (1)
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