Economic Factors Causing Uneven Development
Geography: Edexcel IGCSE, topic 3.3.5
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 the value to them by creating products or services.
Test yourself on Economic Factors Causing Uneven Development
Which of the following is not an economic factor that might restrict development?
What are the main economic reasons for uneven development?