Transcript Economics - Teachnet-UK

A revision guide for GCSE
Geography
AEB 2008
To advance
slide click
here
What is Economic Geography?
You may have heard the phrase that
money makes the world go around….
Well in some ways it does. Or at
least it has a big effect on how the
countries in the world work.
Economic Geography is the
study of how countries make
and spend their money and
how that affects the world we
live in.
But that’s not all…
Economic systems bring together physical and human
resources. Most countries have to trade in order to get all the
resources they need.
Trade between countries is not always fair and has lead to
great differences in the levels of development in countries
around the world.
It is these factors that have brought about the world we live in
today that we study in Economic Geography.
What is Economic Geography?
Economic Geography is the study of how different
countries make and spend their money.
You will see how economic systems bring together
both physical and human factors.
We will see how the earths resources are used and
how trade between countries for these resources is
not always fair.
We will also be looking at the impact of economic
change
How to use this Revision Session for
Economic Geography
• Click on the topic of your choice on the
following slide
• Read through the animated section to the
end
• Then choose either to return to the main
menu and choose another topic, or exit
and try a quiz.
• Finally look at the example GCSE
questions on Economic Geography and
have a go at being an examiner!
Types of
Industry
Development
Click on the
economic topic
of your choice
Growth and
Decline of
Industry
Trade and Aid
Regional
differences
Types of Industry
There are 4 main types of industry
Primary – The collection of raw materials
Secondary – Manufacturing a product
Tertiary – Providing a service
Quaternary – Research an development
Chose which type of industry you
wish to study…
PRIMARY
SECONDRY
TERTIARY
QUATERNARY
Click on the blue box of your choice
Transnational
Corporations
TNCs
Click here to
leave the section
on type of
industry
Primary Industry
The raw materials can be quarried, mined or drilled
• Primary
Industries
are those
that
involve
from
below the
earths surface
e.g. oil
drilling
andthe
coal
mining.
collection of Raw Materials.
They can be grown e.g
farming and forestry
(Raw materials are things that are found in or on
the
that
haven’tfrom
been processed or
Theyearth
can be
collected
changed).
the sea - fishing
A good example of a Primary Industry to look
at in more detail is farming.
There are several different types of farming….
•
•
•
•
•
•
•
•
•
Arable – growing crops
Pastoral – Rearing animals
Mixed – both animals and crops on the same farm
Horticulture – Flowers, fruit, vegetables often in
greenhouses
Commercial – Growing to sell the produce
Subsistence – Growing to provide food for the family
Extensive – Using large area with little labour eg. Hill
sheep farming
Intensive – Small amount of land using a lot of labour or
technology
Sustainable – Farming that causes minimal impact on
the environment
We can think of industry as a
system with …
INPUTS
Labour
Seed
Animals
Manure
Soil
Rain
Sunshine
PROCESSES
Planting
Weeding
Harvesting
OUTPUTS
Food
Seed
Manure
Tending stock
Seed, manure and food energy
Let us look at the Primary Industry of farming to
illustrate this point.
If the outputs are all put back into the system as
inputs this creates a ‘closed system’.
Farming as a system
Farming can be a closed system
where all the outputs are put back
into the system as inputs.
Subsistence farming where farmers
only grow food to feed themselves
are a good example of this type of
system.
PROFITS
INPUTS
PROCESS
OUPUTS
INPUTS
PROCESS
OUPUTS
Seeds, Manure
Or farming can be an open system
where the outputs are sold and part of
the money made pays for new inputs
(the rest is profit).
Money from sales
Commercial farming in MEDC countries are examples of open
systems
How farming effects the land
Farming takes up more land than any other human
activity. It has a great impact on the natural
environment e.g soils and water. Often these impacts
are very harmful.
Large areas of rainforest are cleared to provide room for
cattle ranching and the soils rapidly loose their fertility.
Overuse of land in countries with growing populations can
lead to desertification and deforestation
Farming can change a natural ecosystem into an Agroecosystem (one that is controlled by the farmer)
Farming is a risky business
These can
effects
those of a bad harvest caused by bad weather and
Risks
be or
Physical..
much more keenly felt in the pooper LEDC countries where farmers
Floods
wash
away
soilsjust
or ruin
crops
are often
only
existing
above
the poverty line.
Droughts
kill plants
animals
Such an event
may and
cause
them to dip below the poverty line.
Farmers in
MEDC
countries
are more
able to survive such dips.
Diseases
– can
affect
both plants
and animals
Earthquakes or Volcanoes ruin valuable farmland.
Risks can be Economic..
Changes in the market cause a drop in demand for types of produce
Quotas – governments may put limits on certain products
New technology may increase costs or cause unemployment.
Arable
Pattern
of Farming
farming in the UK
The pattern of farming in the
UK is largely determined by the
relief of the land and the quality
of the soil.
Let’s look at the different types
in turn..
Arable:
Growing crops
Location:
East coast eg East
Anglia
Reasons:
Fertile soil
Flat land
Low lying
well drained
Less rainfall
more sunshine
Livestock Rearing
Livestock:
Cattle and sheep for meat
and wool
Location:
On highland eg mountains of
Scotland and Wales
Reason:
Nothing else will grow there
except grass, not flat, poor
soil, poor accessibility.
Only need to gather livestock
in a few times per year.
Dairying
Dairying:
Cows kept for milk etc.
Location/Reason:
Nearer centres of location –
not such high land but not
flat enough to grow things
eg South Wales, West
Midlands
Horticulture
Horticulture:
Flowers fruit and veg – often
in greenhouses
Location:
Small pockets around centres
of population
e.g. around London
Reason:
Need to get produce to
market quickly or will spoil.
Doesn’t require lots of room
(intensive)
In the south – warmer and
sunnier
Mixed Farming
Mixed:
Crops and animals on the same
farm
Location/Reason:
Everywhere else!
ie where its not mountainous, not
the best quality soils but has a
mixture of land that will grow
grass and some that can support
crops – often in rotation.
Common Agricultural Policy (CAP)
Introduced in 1962 it regulates farming inside the EU.
Provides grants and subsidies for farmers
Gives farmers a quota (a set amount of a particular crop to produce)
CAP AIMS
Increase food supplies for all EU
countries
Keep farmers in their jobs
Guaranteed prices of selected
products
Make farming more intensive
Subsidies so they can compete
with cheap imports
CAP IMPACTS
Positive
Food supplies and jobs
secured
Farmers incomes went up
Created other related jobs
Impacts
- Food surpluses
- loss of hedgerows
- more nitrates and
pesticides  water cycle
Constantly being reviewed and updated. Changes include
Support farmers who use fewer chemicals and plant more
hedgerows
Encourage farmers to diversify e.g. farm shop, golf courses.
Click here to
choose another
type of industry
Click here to
return to main
menu
Secondary Industry
Secondary industries
are those where a
product is made or
processed.
It is often known as the
Manufacturing industry.
We can again look at this type of
industry as a system.
Raw materials
INPUT
Manufactured goods
PROCESS
OUTPUT
Our inputs and outputs are different
from those we looked at with farming
INPUTS
PROCESSES
Raw materials
Work by hand
Energy
Work my machines
Labour
Heating
Transport costs
Adding chemicals,
water or other
materials
Capital
Government Grants
OUTPUTS
Goods for sale to
people
Goods for sale to
other companies
Waste products
To make a factory profitable…
Inputs & Processes
Outputs
The costs of all the inputs and processes must be less
than the money made from selling the final product.
One way to help this is to keep the costs low. This may
effect where the industry is located
Factors that influence location
Click on the blue boxes to reveal the reasons
A good example of a Secondary
Industry is that of the iron and steel
industry
3 main raw materials:
Iron ore
Limestone
Coke
Steel is a vital material at the heart of the
modern world. Essential in industry,
agriculture and transport. In the home, in
sport and in building, packaging and
engineering, steel products are
everywhere. Steel also forms the basis of
the machinery for the making of nearly
every product we possess. Without it,
wood and glass cannot be shaped, stone
cannot be mixed, other metals cannot be
melted and formed and plastics cannot be
manufactured. Without steel our modern
world would not exist.
Chairman of British Steel
Steel Making first developed n the UK during
the industrial revolution in the 1800s
Depends on bulky raw materials (coal and iron). Also produces bulky
products so transport costs can be high.
Often located near to the coal fields or close to a port as it is cheaper to
transport these goods by sea e.g Port Talbot South Wales
Scotland
Northumberland
Lancashire
Yorkshire, Derbyshire
South Wales
British Coalfields
For more about the
British Steel industry
see the section on
the growth and
decline of industries
A more modern example of a manufacturing or
secondary industry is that of a car manufacturer.
Again looking at this as a system….
INPUTS
PROCESSES
OUTPUTS
Steel, glass, plastic,
power supplies,
robots, labour, capital,
upholstery, rubber,
government incentives
Welding, testing,
operating machinery,
administration,
research, factory
maintenance
Cars, Wages,
profit, waste,
A lot of these more modern manufacturing plants have
replaced the older more traditional industries such as
iron and steel in the UK. (See later section on growth
and decline of industry).
Click here to
choose another
type of industry
Click here to
return to main
menu
Tertiary Industry
This is the largest group of
industries in MEDCs. It
involves the service
industries such as
teaching, nursing, police
and retail.
A good example of a Tertiary
Industry to look at is Tourism.
• Tourism is the world’s fastest growing
industry (More money and more leisure
time have helped this increase)
• There is some form of tourism in nearly
every country in the world
• It gives many LEDCs the chance to
improve their economies
• Better transport networks have opened up
the world
Tourism Multiplier Effect
Foreign visitors
attracted
Extra food
needed
Local farmers
grow more
food
Spend money
(eg. hotels, on
trips, souvenirs)
Growth of
construction
industry –
hotels, roads,
airports etc.
Jobs created
Local people with
higher wages spend
more money
Industry grows
to meet demand
More wealth
generated from
taxes to pay for
hotels, roads,
airports etc.
So Tourism can help an economy
grow, but there is a negative side too.
• Only 45% of revenue from tourism reaches the host
country (kept by foreign tour operators)
• Tourism can grow so large and popular that it
destroys the environment the tourists come to see.
• Tourist may not respect or even disturb the local
cultures.
Click here to
choose another
type of industry
Click here to
return to main
menu
Quaternary Industry
The newest and
smallest
industrial sector
where scientists
and researchers
investigate and
develop new
products.
Footloose industries
• Footloose industries are not toed to
particular sources of materials or markets,
and have a free choice of locations.
• These industries tend to be either Tertiary
or Quaternary industries.
Click here to
choose another
type of industry
Click here to
return to main
menu
Transnational Corporations (TNC)
• Many MEDCs have set up factories in
LEDC countries in an effort to maximise
profits.
• These are called Transnational because
they are companies that have operations
is several nations.
• Examples of TNCs include Nike, Adidas or
many other clothing firms
Advantages of TNCs
To the TNC
Cost are low – cheap labour so profits are high
Raw materials are local
Few health and safety regulations that could be expensive to meet
To the LEDC
Jobs provided for local people
Higher wages than some other local work
Can use money on education and health care
Develops links with other countries
To MEDCs
Shoppers can buy goods more cheaply in shops
Disadvantages of TNCs
To the LEDC
TNCs can close factories without warning and move to other
countries
Workers work long hours in poor conditions
Products are no use for local markets
Can have a bad effect on the environment
To MEDCs
Cheaper imports mean that local factories in the MEDC may close
and lead to unemployment
An increase in imports can affect the trade balance (see later
section on trade and aid)
Click here to
choose another
type of industry
Click here to
return to main
menu
That completes this section on the
types of Industry
Click this box to return to the main
menu to choose another topic
Click here to try a short test
on what you have just learnt
Click here to exit the program. Then why not
have a look at the sample GCSE questions on
Economic Geography.
Growth and Decline of Industry
Industry has changed a lot in the last 50
years especially in MEDC countries.
This has had an impact on the growth of
cities, the distribution of population and
had a social and economic effect.
Changes in employment structure
in the UK
In 1950 the employment structure in the UK looked like this:1950
Today
Primary
Primary
Secondary
Secondary
Tertiary
Tertiary
However, today it looks very different.
Let us investigate some of the reasons for this.
Let’s first look at the Location of Industry
The location of industry is influenced by a number of
factors:-
•
•
•
•
The location of raw materials and power
supplies
The availability of a workforce (supply of
labour)
The location of the market (where they need to
sell the goods)
Market influences or changes and government
policies
Let us see how these work and how they have lead to a
change in the employment structure.
Location of raw materials
Industries grew up near their raw materials
to reduce transport costs especially if they
were bulky.
This lead to different areas specialising in
certain industries.
Availability of a workforce
A factory can only locate where there are enough
people available to work for them.
They may need to be specialised with particular
skills (this may lead to similar industries
grouping together)
Or they may need large numbers of unskilled
workers (who they will train up themselves)
Labour costs vary around the country so industries
will try to locate where these are cheapest to
keep their costs down.
Location of Market
If the cost of transporting raw materials cost
more than the finished product the industry
will locate close to them.
However, if the finished product is more
expensive to transport (it may be larger or
more expensive to insure) then the
cheaper location will be nearer the market.
Market influences and Government
policies
Some industries will locate within the
country that they market the product to
avoid import taxes.
Governments may encourage certain
industries into certain areas to help with
unemployment problems
Land may be cheaper in some areas than
others and this will effect input costs.
Decline of Traditional Manufacturing
Many of the traditional ‘heavy’ manufacturing industries (like iron
and steel) have declined and been replaced by the ‘light’ assembly
industries (like electronics)
Changes in technology have lead to old methods being replace by
robots and computer controlled production.
Competition from other countries with lower costs (such as
cheap labour) means that some companies loose out to those
places that can make and sell the products cheaper.
This lead to a reduction in the percentage of people employed in
the UK in secondary industry falling from 40% to 26% from the
1970s to the 1990s.
Percentage employed in manufacturing
1970
1990
0
10
20
30
40
British Iron and Steel
Industry
The production of Iron and Steel requires large quantities of bulky raw
materials. Improved technology has reduced the amounts we need
(for example to produce 1 ton of iron in 1880 we needed 10 tonnes of
coal where as we only needed ½ ton in 1990).
Tonnes of coal
10
8
6
Tonnes of coal
4
2
0
1880
1990
However, most of the local raw materials have become
exhausted and now have to be imported. This
expense put together with high labour costs her have
meant that it is now cheaper to import our steel from
other countries than to produce it here. (eg from Korea
and other Far east countries)
This has lead to the closure of many steel plants
around the country (as you will see later in a slide
about the changing location of industry in the UK) and
caused great unemployment problems in these areas.
Domino Effect
This shows what knock on effects can happen after the closing down of
an industry in an area.
Factory closes down
Transport firms
loose business
and close
Unemployment
rises
Local shops
loose trade
(people have
less money to
spend)
People leave area
to find work –
property prices fall
Area becomes run down, crime can increase and area declines.
These effects can be reversed if new
industry opens up in the area
Factory opens up
Transport get new
business
Unemployment
falls
Local shops
start to thrive
as people now
have more
money to
spend
People move into
the area – property
prices rise
This is why the government will encourage new businesses to set up in
depressed areas by giving them grants and other incentives. An example
of this is the high-tech industries such as Sony and LG moving into South
Wales.
Growth of High Tech Industries
High Tech industries are those that developed due to Information
Technology and use micro-electronics. They are sometimes referred to
as the SUNRISE industries.
These do not need to be near raw materials as their input materials are
usually small and easier transported. They tend to prefer to be near
fast transport links an are often built away from old industrialised
areas on greenfield sites. These are FOOTLOOSE industries that can
locate anywhere.
A good example of an area of this type of industry is M4 corridor.
Changing locations of industry in
the UK
Let us see how this has changed the
locations of industries within the UK
1970s
1990s
To see more on this go to section on Regional Differences.
Regional Economic change - EU
We have seen how regions
that used to house heavy
industry have experienced
a decline.
The map shows the main
industrial regions of
Western Europe. This
‘Heavy Industry Triangle
include areas now in
decline that qualify for EU
grants to try to attract new
industry into the area.
The EU’s Economic Core
This is the rich economic centre
of Europe. It is sometimes
called Europe’s ‘Hot
Banana’.
Areas away from the core are
said to be on the periphery
and tend to be less
economically well
developed.
Growth of industrialisation in
LEDCs
Employment structure in an LEDC and an MEDC
MEDC
Primary
Secondary
Tertiary
LEDC
0%
20%
40%
60%
80%
100%
The graph shows typical employment structures
for MEDC and LEDC countries. However, we
are now seeing the emergence of NICs
(Newly Industrialised Countries.
Newly Industrialised Countries (NICs)
These sometimes called ‘tiger
economies’ have grown due
to investment from other
countries, an abundance of
cheap labour and the
development of new skills
especially in the electronics
field.
Examples of such countries are
to be found in south east
Asia – South Korea, Taiwan
and China
That completes this section on the
Growth and Decline of Industry
Click this box to return to the main
menu to choose another topic
Click here to try a short test
on what you have just learnt
Click here to exit the program. Then why not
have a look at the sample GCSE questions on
Economic Geography.
Development
The Development of a country is a
measure of how mature a country
is in terms of its economic growth,
social systems and infrastructure
How we measure Development
The Development of a country is often
measured by its wealth or GDP.
Gross Domestic Product (GDP) is the total income of a
country per year in $ US divided by the number of people
in the country.
The map on the next slide shows how this was done
(Brandt report in the 1970s) to divide the world into ‘rich
developed north’ and the ‘poor developing south’.
World development based on GDP
With the exception of Australia the world could generally be split
into the rich north and the poor south.
The Human Development Index
(HDI)
However development is not just about money.
Some LEDC countries do have money, but it is kept by a
few powerful people
Also some GDP is not taken into the calculation as farmers
do not make produce to sell, but do have enough to eat.
Also there may be a lot of informal jobs where money is
exchanged without record.
So another system that takes in other factors as well was
developed.
The HDI is an average score of variables that take into
account life expectancy and education as well as GDP.
Development Index
To see how this can work let’s take a look at some
GDP countries
development indices from two very different
– UK and Ethiopia.
Life Expectancy
Infant Mortality Rate
Calorie intake
Energy Used
Urban population
Literacy rate
Number of people
per doctor
Lets take a look at a few examples
of the HDI
Life
expectancy
Adult literacy
Japan
F83 M77
99%
37,640 0.937
Canada
F83 M76
99%
19,380 0.95
UK
F81 M74
99%
19,260 0.916
Gambia
F56 M51
36%
320 0.57
Mali
F49 M46
27%
250 0.22
Country
GDP per
capita ($)
HDI
The HDI is an average score of these 3 variables when countries
are ranked in order.
This gives a different view of world development –
see map below.
This is more accurate as it takes into account the social
side of the development and not just the economic.
Global distribution of wealth
The world can be divided into
richer and poorer countries –
25% of the world’s population
live in MEDCs and own 80% of
the world’s wealth
The ‘development gap’ is the
contrast between rich and poor
countries.
The Development gap has grown for
three main reasons
Historic
Environmental
Social-Economic
Click on the boxes to reveal some of the
terrible facts on the unfair distribution of
wealth in the world.
5 million children die
Each year from
diarrhoea
Use 7/8 of the
world’s resources
Eat 2/3 world’s
grain
Life expectancy
70 years
The Rich North
86% world’s
industry
20% suffer from
hunger
Life expectancy
just 50 years
The
Poor
South
¾ of the world’s
population
Only 1/20 of the
world’s spending
On health
90% of the world
spending on
education
85% world’s
wealth
800 million unable
to read or write
Growth of the Development Gap
Historic reasons – some LEDCs are past colonies
of richer European countries that took some of
their raw materials and when they went left them
with little industry or education
Environmental reasons – poor climate, poor soils
or very few natural resources to trade
Social economic reasons – often countries at war,
little manufactured goods (have to import them
from other countries) and may have borrowed
money and now need to pay back the loans
This cartoon sums up how the richer MEDC
countries have carved up the resources from the
LEDC countries causing them great hardship
Development Gap
This gap may continue to grow:LEDCs have mainly primary industries and therefore
have only cheap goods to sell
They have to by most of their expensive manufactured
goods from MEDCs.
So they have to spend a lot but don’t receive much money.
Employment structure in an LEDC and an MEDC
MEDC
Primary
Secondary
Tertiary
LEDC
0%
20%
40%
60%
80%
100%
They have to borrow money from MEDCs to
finance any development and then pay back the
interest on these loans.
Next year the country
sell minerals and crops
to the MEDC as usual
2
The countries can
fall into the cycle
of debt
1
Has to pay a
lot of interest
on its loans
So it borrows
more money
Click on the
boxes to reveal
the cycle
6
The prices of
these have
dropped
3
So it doesn’t
earn as much
money as they
hoped
4
Which leaves it short
of money for imports
and development
projects
5
‘The total owed by the poorer countries to the richer ones stands at a
staggering one trillion pounds’ Friends of the Earth
Closing the Development Gap
Although the richer countries have the technology and
money and control most of the manufacturing. It is the
poorer countries that often provide the raw materials.
Closing the Gap
• This may be achieved in time either by the
use of Aid or Investment from the richer
countries.
• For more detail on the types of aid that
can be provided see the section on ‘Trade
and Aid’
‘The amount of money owed by the poorer
countries to the richer ones now stands at a
staggering one trillion pounds’
Friends of the earth’
‘Third World countries want to pay the money
back. It’s just that they can’t. If it were only a
questions of paying the initial loans, the Third
World would have done this many times over.
But repaying debt means paying off high
interest charges. In 1982 the total amount that
the Third World owed to the developed
countries was $860 billion. Since then debtor
countries have repaid thousands of billions, yet
they still owe $2,000 billion’
Oxfam
Investment programmes
Some countries have developed from LEDCs to
NIC (newly industrialised countries) due to
investment.
They are countries with high populations that
provide a motivated cheap work force that
attracted investors. They also have a large
home market for the goods.
However, these growing industries are causing
many pollution problems and working conditions
can be poor (there is more information about
such Multi National Corporations in the ‘Trade
and Aid ‘ section)
So what is development ?
It is the process of change and growth
It means a chance of
a good education
It means a chance to
earn a good living
It means the
chance to live
a long and
healthy life
It means justice
for everyone
It means
change for the
better
It means freedom
from poverty
That completes this section on
Development
Click this box to return to the main
menu to choose another topic
Click here to try a short test
on what you have just learnt
Click here to exit the program. Then why not
have a look at the sample GCSE questions on
Economic Geography.
Regional Differences
We have seen how the wealth and
development of the world can vary
between countries, but it can also vary
within a country.
In a previous section we have seen how
growth and decline has changed
location/distribution of industry in the UK.
Regional Economic Change
We can split these Assisted areas
into three types:
The decline of industry in some
areas has lead to depressed areas
with high unemployment.
Assisted areas – are areas that
need to attract new industry
But many of these area have
become thriving centres of new
industry.
Enterprise zones – focus aid on
specific areas of decline such as
old inner-city areas eg. London’s
docklands
The government has targeted
such areas to attract new
industry by giving a range of
incentives for new businesses to
set up here.
Urban Development Corporations
(UDCs) aim to make these areas
more attractive for economic
activity.
These area are known as
‘ASSISTED AREAS’
Growth and decline – South Wales
A good example of an assisted area is South Wales
South Wales was once famous for its coal and
steelworks (using local coal and iron ore), but once
these closed down they left areas of high
unemployment.
The Welsh Development agency offered
money to companies to set up in the
area.
This attracted many high-tech industries such as Sony,
Panasonic and LG.
Over 300 international companies chose South Wales
as the best location in Europe
Who wins….
New Industries gain:
Large available workforce
South Wales gain:
Area with good transport
links
New employment providing
money
A base within the EU so
within their main market
(no import taxes to pay)
New people move into the area
attracting more shops to open
and house values to rise.
Government grants and
incentives
Brings new life to an area that
was into decline.
However, not all of South Wales has benefited. The narrow steepsided valleys like the Rhondda do not have the space needed to site
these new large factories.
North South Divide UK
The patterns of growth
and decline of industry
within the UK has lead to a
split between the richer
south with higher
employment and the more
depressed regions in the
north.
Let us look at examples of these
differences….
The North and West:
Higher- unemployment
(those employed are generally in
manufacturing)
infant mortality
Lower- Weekly earnings
House prices
Number of cars
The South and East
Higher- Weekly earnings
House prices
Number of cars
Employment (mainly in the
service industries)
Lower- infant mortality
This is a pattern that is repeated
throughout Europe
This map shows
differences in GDP
throughout the region.
The darker the colour the
higher the GDP.
The areas with the highest
GDP are concentrated in
the centre of the EU.
These areas with low
GDP are also generally
areas with high
unemployment.
This map shows the
unemployment of
different regions in the
EU (the darker the colour
the higher the
unemployment,
The highest rate of
unemployment are on the
edges of the Eu eg.
Greece, Spain, and
Ireland
Contrasting regions in Italy
Italy is another good
example of a country
with a divide
between north and
south in terms of
economic
differences.
The North – The industrial
Heartland – with the large cities of
Turin, Genoa and Milan.
Reasons for its success:
Rich soils and plenty of water – so
good for agriculture
Large flat plain – room to build
factories
The South – it’s problems.
Area of steep slopes – difficult to
develop.
Poor network of roads and rail.
More extreme climate
Lack of raw materials.
Thin dry soils
Better climate – less extreme
temperatures
It is mainly a region of agriculture
but farming here is difficult.
Good access to the rest of
Europe.
(They do have tourism here)
These regional differences have lead to migration from the south to
the north of the country (over 4 million people have moved since
1950).
The Italian government is trying to attract new industries to the
south in the same way we saw about South Wales, but their success
has been more limited.
That completes this section on
Regional Differences
Click this box to return to the main
menu to choose another topic
Click here to try a short test
on what you have just learnt
Click here to exit the program. Then why not
have a look at the sample GCSE questions on
Economic Geography.
Trade and Aid
Trade is the buying and selling of goods between countries.
Aid is when one country will give help and support to another
which may help it to grow or develop.
Trade
No country provides
everything it needs so it
has to trade with other
countries.
Goods that come into a
country are called imports
Goods that go out from a
country are called exports
Balance of Trade
The difference between the cost of imports and the
value of exports is called the trade balance
If a country earns more from the sale of its exports
than it spends on its imports it is said to have a
trade surplus
If a country spends more on its imports than it
makes from the sale of its exports it is said to
have a trade deficit.
Global patterns of Trade
• Most LEDCs export low value raw materials
• These are then processed by MEDCs who make
manufactured goods that have higher profits
• So MEDCs have a higher share of the total world exports
by value.
LEDCs
EXPORTS
‘Cheap’ foods eg
tea, coffee,
Materials rg rubber,
cotton
IMPORTS
Very few
MEDCs
‘Expensive’
manufactured goods eg.
Cars, computer
‘Cheap’ materials that it
processes into
manufactured goods
Trading Groups
Many countries of the world belong to trading groups
to encourage trade between those countries.
These will encourage tariff free trade between them.
Examples of these groups are
The EU (European Union)
NAFTA (North American Free Trade Association –
USA Mexico and Canada
OPEC (Organisation of Petroleum Exporting
Countries)
Free Trade
These trade agreements gave an unfair
advantage to the MEDCs.
In 1994 the World Trade Organisation was
set up to encourage free trade between all
countries
Why trade is not fair to the
LEDCs
Many of the products we take for granted, such
as tea, coffee and chocolate come from poorer
countries.
These products are quite expensive in the UK,
but the people who supply the raw materials
only earn a small amount of money.
Most of the profit is made by the manufacturers
and shops
You pay £1 for a chocolate bar – but where does your money go?
The cost is split
between the farmer
who spends all year
growing and
harvesting the
cocoa beans the
retailer or shop that
sells you the bar,
the cost of the milk
and sugar that are
added, the
manufacturer who
mixes these
ingredients and
wraps it, transport
costs and the tax
the government
collects.
Guess which
is which then
click on the
box to check
your answer
Total cost
5p
?Other Ingredients
8p
?Cocoa farmer
10p
?Transport
15p
?Tax
28p
?Retailer
34p
?Manufacturer
100p
Fair Trade
Fair Trade tries to address these issues by making sure the
producers get a fair price for their products. They will
advertise this fact on the products that are sold here so
you can see if you are buying a fair trade product.
They will
also tell you
their aims
Fair Trade
• A way of doing business that gives the suppliers
of the raw materials a fair wage.
• It also ensures safer working conditions
• Limits the work done by children
• Helps set up co-operatives that help the LEDCs
process their own raw materials
Fair Trade Federation
• You can find several
examples of Fair Trade in
action as you go shopping.
• Products operating under
the Fair Trade Federation
will display this logo.
• Let’s look at a couple of
examples from packaging
on Geobars
Aid
Improving the Quality of Life in LEDCs
Many people in the UK and other MEDC donate
money to improve the quality of life in LEDCs.
This may be prompted by national fund-raising
activities eg. Comic Relief or in response to a
disaster appeal. This money tends to be targeted
into specific areas or projects.
Most LEDCs also receive larger donations form
other sources – there are 3 types
Voluntary Aid
Bilateral Aid
Multilateral Aid
Voluntary Aid
This has nothing to do with
governments and
depends on voluntary
contributions.
Examples of groups that
provide voluntary aid
include: Oxfam and
Action Aid
Bilateral Aid
This is aid between two countries.
It may be a loan of money to an LEDC for a particular
project and it does tie that country to the MEDC.
Multilateral Aid
When rich countries give money to poorer
countries through international banks e.g The
World Bank and the International Monetary
Fund
Problems with Aid
• It can encourage the country to become
dependant on donations
• Many countries that receive the aid have
corrupt governments and the money does
not always go to the people that need it
• Aid is only a ‘sticking plaster’ – it covers up
a problem for a while but does not solve
the cause.
Investment programmes
In recent years some
LEDCs have
developed their
economies rapidly
with outside
investment in their
manufacturing
industries.
Trade in the EU
There is a lot of trade between countries
within the EU. It is the worlds single largest
market. Between half and three quarters the
trade of most EU countries is within the EU
Quota or import duties have limited imports
from non-EU countries. This can prove very
expensive for some LEDCs. Some countries
such as Japan have got around this problem
by setting up factories within the EU (e.g. the
high-tech industries in South Wales).
Many EU countries still trade with former
colonies e.g the UK still has strong links with
Kenya.
That completes this section on
Trade and Aid
Click this box to return to the main
menu to choose another topic
Click here to try a short test
on what you have just learnt
Click here to exit the program. Then why not
have a look at the sample GCSE questions on
Economic Geography.
Thank you for using this revision
tool to help with your studies of
Economic
Geography.
Goodbye
I hope you have found it useful.