Development: Economic Causes
Geography: Cambridge International GCSE (2027 Exams), topic 8.1.7
Which Economic Factors Cause Uneven Development?
The following economic factors are likely to restrict development:
Trade links and geographic position
- Geographic position and transport infrastructure are key ingredients for creating an economy that can trade and export.
- Trade involves buying (importing) and selling (exporting) products to other countries.
Bad trade links and geographic position
- Singapore has a bad geographic position and does not control its own water supply, but built excellent trading links and a huge port to help it develop.
- If a country is landlocked, then it doesn't have access to the sea.
- Most of world trade happens by sea in container ships. If a country cannot physically export its goods because it is landlocked, then it is likely to develop more slowly.
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.
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 often sell undifferentiated commodities and other nations add value to them by creating products or services.
Test yourself on Development: Economic Causes
Which of the following is not an economic factor that might restrict development?
What are the main economic reasons for uneven development?