Presentation on theme: "A revision guide for GCSE Geography"— Presentation transcript:
1 A revision guide for GCSE Geography Economic GeographyA revision guide for GCSE GeographyTo advance slide click hereAEB 2008
2 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.
3 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.
4 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
5 How to use this Revision Session for Economic Geography Click on the topic of your choice on the following slideRead through the animated section to the endThen 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!
6 Growth and Decline of Industry Trade and Aid Types of IndustryDevelopmentClick on the economic topic of your choiceRegional differencesGrowth and Decline of IndustryTrade and Aid
7 Types of Industry There are 4 main types of industry Primary – The collection of raw materialsSecondary – Manufacturing a productTertiary – Providing a serviceQuaternary – Research an development
8 Chose which type of industry you wish to study… PRIMARYSECONDRYTERTIARYQUATERNARYClick on the blue box of your choiceClick here to leave the section on type of industryTransnational Corporations TNCs
9 Primary IndustryThe raw materials can be quarried, mined or drilled from below the earths surface e.g. oil drilling and coal mining.Primary Industries are those that involve the collection of Raw Materials.(Raw materials are things that are found in or on the earth that haven’t been processed or changed).They can be grown e.g farming and forestryThey can be collected from the sea - fishing
10 A good example of a Primary Industry to look at in more detail is farming. There are several different types of farming….Arable – growing cropsPastoral – Rearing animalsMixed – both animals and crops on the same farmHorticulture – Flowers, fruit, vegetables often in greenhousesCommercial – Growing to sell the produceSubsistence – Growing to provide food for the familyExtensive – Using large area with little labour eg. Hill sheep farmingIntensive – Small amount of land using a lot of labour or technologySustainable – Farming that causes minimal impact on the environment
11 We can think of industry as a system with … INPUTSPROCESSESOUTPUTSLabourSeedAnimalsManureSoilRainSunshinePlantingWeedingHarvestingTending stockFoodSeedManureSeed, manure and food energyLet 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’.
12 Farming as a systemFarming can be a closed system where all the outputs are put back into the system as inputs.INPUTSPROCESSOUPUTSSeeds, ManureSubsistence farming where farmers only grow food to feed themselves are a good example of this type of system.PROFITSOr 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).INPUTSPROCESSOUPUTSMoney from salesCommercial farming in MEDC countries are examples of open systems
13 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 deforestationFarming can change a natural ecosystem into an Agro-ecosystem (one that is controlled by the farmer)
14 Farming is a risky business These effects or those of a bad harvest caused by bad weather and much more keenly felt in the pooper LEDC countries where farmers are often only existing just above the poverty line.Such an event may cause them to dip below the poverty line. Farmers in MEDC countries are more able to survive such dips.Risks can be Physical..Floods wash away soils or ruin cropsDroughts kill plants and animalsDiseases – can affect both plants and animalsEarthquakes or Volcanoes ruin valuable farmland.Risks can be Economic..Changes in the market cause a drop in demand for types of produceQuotas – governments may put limits on certain productsNew technology may increase costs or cause unemployment.
15 Pattern of farming in the UK Arable FarmingThe 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 cropsLocation:East coast eg East AngliaReasons:Fertile soilFlat landLow lyingwell drainedLess rainfallmore sunshine
16 Livestock Rearing Livestock: Cattle and sheep for meat and wool Location:On highland eg mountains of Scotland and WalesReason:Nothing else will grow there except grass, not flat, poor soil, poor accessibility.Only need to gather livestock in a few times per year.
17 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
18 Horticulture Horticulture: Flowers fruit and veg – often in greenhousesLocation:Small pockets around centres of populatione.g. around LondonReason:Need to get produce to market quickly or will spoil.Doesn’t require lots of room (intensive)In the south – warmer and sunnier
19 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.
20 Common Agricultural Policy (CAP) Introduced in 1962 it regulates farming inside the EU.Provides grants and subsidies for farmersGives farmers a quota (a set amount of a particular crop to produce)CAP AIMSIncrease food supplies for all EU countriesKeep farmers in their jobsGuaranteed prices of selected productsMake farming more intensiveSubsidies so they can compete with cheap importsCAP IMPACTSPositiveFood supplies and jobs securedFarmers incomes went upCreated other related jobsImpacts- Food surpluses- loss of hedgerows- more nitrates and pesticides water cycleConstantly being reviewed and updated. Changes includeSupport farmers who use fewer chemicals and plant more hedgerowsEncourage farmers to diversify e.g. farm shop, golf courses.
21 Click here to choose another type of industry Click here to return to main menu
22 Secondary IndustrySecondary industries are those where a product is made or processed.It is often known as the Manufacturing industry.
23 We can again look at this type of industry as a system. Raw materialsManufactured goodsPROCESSOUTPUTINPUT
24 Our inputs and outputs are different from those we looked at with farming Raw materialsEnergyLabourTransport costsCapitalGovernment GrantsPROCESSESWork by handWork my machinesHeatingAdding chemicals, water or other materialsOUTPUTSGoods for sale to peopleGoods for sale to other companiesWaste products
25 To make a factory profitable… Inputs & Processes OutputsThe 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
26 Factors that influence location Click on the blue boxes to reveal the reasons
27 A good example of a Secondary Industry is that of the iron and steel industry 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 Steel3 main raw materials:Iron oreLimestoneCoke
28 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 WalesScotlandNorthumberlandLancashireYorkshire, DerbyshireSouth WalesFor more about the British Steel industry see the section on the growth and decline of industriesBritish Coalfields
29 A more modern example of a manufacturing or secondary industry is that of a car manufacturer. Again looking at this as a system….INPUTSSteel, glass, plastic, power supplies, robots, labour, capital, upholstery, rubber, government incentivesPROCESSESWelding, testing, operating machinery, administration, research, factory maintenanceOUTPUTSCars, 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).
30 Click here to choose another type of industry Click here to return to main menu
31 Tertiary IndustryThis is the largest group of industries in MEDCs. It involves the service industries such as teaching, nursing, police and retail.
32 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 worldIt gives many LEDCs the chance to improve their economiesBetter transport networks have opened up the world
33 Tourism Multiplier Effect Foreign visitors attractedExtra food neededGrowth of construction industry – hotels, roads, airports etc.Spend money (eg. hotels, on trips, souvenirs)Local farmers grow more foodJobs createdLocal people with higher wages spend more moneyMore wealth generated from taxes to pay for hotels, roads, airports etc.Industry grows to meet demand
34 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.
35 Click here to choose another type of industry Click here to return to main menu
36 Quaternary IndustryThe newest and smallest industrial sector where scientists and researchers investigate and develop new products.
37 Footloose industriesFootloose 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.
38 Click here to choose another type of industry Click here to return to main menu
39 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
40 Advantages of TNCs To the TNC Cost are low – cheap labour so profits are highRaw materials are localFew health and safety regulations that could be expensive to meetTo the LEDCJobs provided for local peopleHigher wages than some other local workCan use money on education and health careDevelops links with other countriesTo MEDCsShoppers can buy goods more cheaply in shops
41 Disadvantages of TNCs To the LEDC TNCs can close factories without warning and move to other countriesWorkers work long hours in poor conditionsProducts are no use for local marketsCan have a bad effect on the environmentTo MEDCsCheaper imports mean that local factories in the MEDC may close and lead to unemploymentAn increase in imports can affect the trade balance (see later section on trade and aid)
42 Click here to choose another type of industry Click here to return to main menu
43 That completes this section on the types of Industry Click this box to return to the main menu to choose another topicClick here to try a short test on what you have just learntClick here to exit the program. Then why not have a look at the sample GCSE questions on Economic Geography.
44 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.
45 Changes in employment structure in the UK In 1950 the employment structure in the UK looked like this:-However, today it looks very different.Let us investigate some of the reasons for this.
46 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 suppliesThe 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 policiesLet us see how these work and how they have lead to a change in the employment structure.
47 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.
48 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.
49 Location of MarketIf 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.
50 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 problemsLand may be cheaper in some areas than others and this will effect input costs.
51 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.
52 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.
53 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).
54 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.
55 Domino EffectThis shows what knock on effects can happen after the closing down of an industry in an area.Factory closes downTransport firms loose business and closePeople leave area to find work – property prices fallUnemployment risesLocal shops loose trade (people have less money to spend)Area becomes run down, crime can increase and area declines.
56 These effects can be reversed if new industry opens up in the area Factory opens upTransport get new businessUnemployment fallsLocal shops start to thrive as people now have more money to spendPeople move into the area – property prices riseThis 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.
57 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.
58 Changing locations of industry in the UK Let us see how this has changed the locations of industries within the UKTo see more on this go to section on Regional Differences.1970s1990s
59 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.
60 The EU’s Economic CoreThis 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.
61 Growth of industrialisation in LEDCs The graph shows typical employment structures for MEDC and LEDC countries. However, we are now seeing the emergence of NICs (Newly Industrialised Countries.
62 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
63 That completes this section on the Growth and Decline of Industry Click this box to return to the main menu to choose another topicClick here to try a short test on what you have just learntClick here to exit the program. Then why not have a look at the sample GCSE questions on Economic Geography.
64 DevelopmentThe Development of a country is a measure of how mature a country is in terms of its economic growth, social systems and infrastructure
65 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’.
66 World development based on GDP With the exception of Australia the world could generally be split into the rich north and the poor south.
67 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 peopleAlso 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.
68 Development IndexTo see how this can work let’s take a look at some development indices from two very different countries – UK and Ethiopia.GDPLife ExpectancyInfant Mortality RateCalorie intakeEnergy UsedUrban populationLiteracy rateNumber of people per doctor
69 Lets take a look at a few examples of the HDI CountryLife expectancyAdult literacyGDP per capita ($)HDIJapanF83 M7799%37,6400.937CanadaF83 M7619,3800.95UKF81 M7419,2600.916GambiaF56 M5136%3200.57MaliF49 M4627%2500.22The HDI is an average score of these 3 variables when countries are ranked in order.
70 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.
71 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 wealthThe ‘development gap’ is the contrast between rich and poor countries.The Development gap has grown for three main reasonsHistoricEnvironmentalSocial-Economic
72 The Rich North The Poor South Click on the boxes to reveal some of the terrible facts on the unfair distribution of wealth in the world.Use 7/8 of theworld’s resources5 million children dieEach year fromdiarrhoeaEat 2/3 world’sgrain20% suffer fromhungerLife expectancyjust 50 yearsLife expectancy70 yearsThe Rich NorthThe Poor South86% world’sindustry¾ of the world’spopulationOnly 1/20 of theworld’s spendingOn health90% of the worldspending oneducation85% world’swealth800 million unableto read or write
73 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 educationEnvironmental reasons – poor climate, poor soils or very few natural resources to tradeSocial 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
74 This cartoon sums up how the richer MEDC countries have carved up the resources from the LEDC countries causing them great hardship
75 Development Gap This gap may continue to grow:- LEDCs have mainly primary industries and therefore have only cheap goods to sellThey have to by most of their expensive manufactured goods from MEDCs.So they have to spend a lot but don’t receive much money.
76 They have to borrow money from MEDCs to finance any development and then pay back the interest on these loans.‘The total owed by the poorer countries to the richer ones stands at a staggering one trillion pounds’ Friends of the Earth2Next year the country sell minerals and crops to the MEDC as usualThe countries can fall into the cycle of debt1Has to pay a lot of interest on its loansThe prices of these have dropped3Click on the boxes to reveal the cycle6So it borrows more moneySo it doesn’t earn as much money as they hoped4Which leaves it short of money for imports and development projects5
77 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.
78 Closing the GapThis 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’
79 ‘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
80 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)
81 So what is development ? It is the process of change and growth It means a chance of a good educationIt means a chance to earn a good livingIt means change for the betterIt means the chance to live a long and healthy lifeIt means freedom from povertyIt means justice for everyone
82 That completes this section on Development Click this box to return to the main menu to choose another topicClick here to try a short test on what you have just learntClick here to exit the program. Then why not have a look at the sample GCSE questions on Economic Geography.
83 Regional DifferencesWe have seen how the wealth and development of the world can vary between countries, but it can also vary within a country.
84 In a previous section we have seen how growth and decline has changed location/distribution of industry in the UK.
85 Regional Economic Change The decline of industry in some areas has lead to depressed areas with high unemployment.We can split these Assisted areas into three types:Assisted areas – are areas that need to attract new industryEnterprise zones – focus aid on specific areas of decline such as old inner-city areas eg. London’s docklandsUrban Development Corporations (UDCs) aim to make these areas more attractive for economic activity.But many of these area have become thriving centres of new industry.The government has targeted such areas to attract new industry by giving a range of incentives for new businesses to set up here.These area are known as ‘ASSISTED AREAS’
86 Growth and decline – South Wales A good example of an assisted area is South WalesSouth 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 offeredmoney to companies to set up in thearea.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
87 Who wins…. Large available workforce Area with good transport links New Industries gain:Large available workforceArea with good transport linksA base within the EU so within their main market (no import taxes to pay)Government grants and incentivesSouth Wales gain:New employment providing moneyNew people move into the area attracting more shops to open and house values to rise.Brings new life to an area that was into decline.However, not all of South Wales has benefited. The narrow steep-sided valleys like the Rhondda do not have the space needed to site these new large factories.
88 North South Divide UKThe 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.
90 The North and West:Higher- unemployment(those employed are generally in manufacturing)infant mortalityLower- Weekly earningsHouse pricesNumber of carsThe South and EastHigher- Weekly earningsHouse pricesNumber of carsEmployment (mainly in the service industries)Lower- infant mortality
91 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.
92 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
93 Contrasting regions in Italy Italy is another good example of a country with a divide between north and south in terms of economic differences.
94 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 agricultureLarge flat plain – room to build factoriesBetter climate – less extreme temperaturesGood access to the rest of Europe.The South – it’s problems.Area of steep slopes – difficult to develop.Poor network of roads and rail.More extreme climateLack of raw materials.Thin dry soilsIt is mainly a region of agriculture but farming here is difficult.(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.
95 That completes this section on Regional Differences Click this box to return to the main menu to choose another topicClick here to try a short test on what you have just learntClick here to exit the program. Then why not have a look at the sample GCSE questions on Economic Geography.
96 Trade and AidTrade 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.
97 TradeNo country provides everything it needs so it has to trade with other countries.Goods that come into a country are called importsGoods that go out from a country are called exports
98 Balance of TradeThe difference between the cost of imports and the value of exports is called the trade balanceIf a country earns more from the sale of its exports than it spends on its imports it is said to have a trade surplusIf a country spends more on its imports than it makes from the sale of its exports it is said to have a trade deficit.
99 Global patterns of Trade Most LEDCs export low value raw materialsThese are then processed by MEDCs who make manufactured goods that have higher profitsSo MEDCs have a higher share of the total world exports by value.LEDCsMEDCs‘Cheap’ foods eg tea, coffee,Materials rg rubber, cottonVery few‘Expensive’ manufactured goods eg. Cars, computer‘Cheap’ materials that it processes into manufactured goodsEXPORTSIMPORTS
100 Trading GroupsMany 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 areThe EU (European Union)NAFTA (North American Free Trade Association – USA Mexico and CanadaOPEC (Organisation of Petroleum Exporting Countries)
101 Free TradeThese 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
102 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
103 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.?5pOther IngredientsCocoa farmerTransportTaxRetailerManufacturerGuess which is which then click on the box to check your answer?8p?10p?15p?28p?34pTotal cost p
104 Fair TradeFair 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
105 Fair TradeA way of doing business that gives the suppliers of the raw materials a fair wage.It also ensures safer working conditionsLimits the work done by childrenHelps set up co-operatives that help the LEDCs process their own raw materials
106 Fair Trade FederationYou 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
110 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 typesVoluntary AidBilateral AidMultilateral Aid
111 Voluntary AidThis has nothing to do with governments and depends on voluntary contributions.Examples of groups that provide voluntary aid include: Oxfam and Action Aid
112 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.
113 Multilateral AidWhen rich countries give money to poorer countries through international banks e.g The World Bank and the International Monetary Fund
114 Problems with AidIt can encourage the country to become dependant on donationsMany countries that receive the aid have corrupt governments and the money does not always go to the people that need itAid is only a ‘sticking plaster’ – it covers up a problem for a while but does not solve the cause.
115 Investment programmes In recent years some LEDCs have developed their economies rapidly with outside investment in their manufacturing industries.
116 Trade in the EUThere 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 EUQuota 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.
117 That completes this section on Trade and Aid Click this box to return to the main menu to choose another topicClick here to try a short test on what you have just learntClick here to exit the program. Then why not have a look at the sample GCSE questions on Economic Geography.
118 Thank you for using this revision tool to help with your studies of Economic Geography. GoodbyeI hope you have found it useful.