4.2.5

Breaking Out of the Poverty Cycle

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Economic Approaches to Escaping Poverty

The following economic factors are likely to restrict development:

Illustrative background for High national debtIllustrative background for High national debt ?? "content

High national debt

  • Poor countries often borrow money to build infrastructure and develop their economies.
  • But because they are poor countries, lending to them is risky. Because of this, they have to pay a higher interest rate on their loans.
  • In 2005, Malawi was spending 9.6% of its GNI on paying its debts & interest. This was double Malawi's spending on healthcare.
  • Debt relief, like the Ivory Coast's 2012 relief could help accelerate development.
Illustrative background for Low value add from primary productionIllustrative background for Low value add from primary production ?? "content

Low value add from primary production

  • Primary products are raw materials that are dug up (minerals), cut down (wood) or farmed (crops like coffee).
  • Less developed nations generally export the raw materials (aluminium, wood or coffee), instead of 'adding value' to the products themselves.
  • They sell undifferentiated commodities and other nations add value to them by creating products or services.
  • Increasing a country's ability to manufacture and add value could accelerate development.

Jump to other topics

1Geography Skills

2Geology of the UK

3Geography of the World

4Development

5Weather & Climate

6The World of Work

7Natural Resources

8Rivers

9Coasts

10Glaciers

11Tectonics

12Climate Change

13Global Population & Inequality

14Urbanisation

15Ecosystems

16Life in an Emerging Country

17Analysis of Africa

18Analysis of India

19Analysis of the Middle East

20Analysis of Bangladesh

21Analysis of Russia

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