Explain why trade should reduce poverty Trade creates jobs for people working in export industries and supporting industries. There can be a knock on multiplier effect where income earned is then spent in domestic businesses Trade can help people to earn more money and therefore buy more goods and services. For example, as China has developed, many people are now paid more for working in factories than they used to get from working on farms etc in rural areas. Trade may lead to greater tax revenue for governments (eg 80% of Nigeria’s government revenue comes from oil). This can be used to improve education, infrastructure or raise living standards through benefits etc

Nigeria is Africa’s biggest oil producer. To what extent is Nigeria specialising in the production of oil a good thing? Nigeria benefits as it is able to specialise in a product in which it has an absolute advantage. It has a large market for its product (oil) and this industry generates government revenue and also creates jobs and adds to its GDP. Government revenue can be used to…. Is Nigeria overly dependent on oil?  As Nigeria is so specialised it does mean that Nigeria is vulnerable to any changes in demand for and the price of oil. Oil is a scarce resource and will one day run out Currently the price of oil has been plummeting. This is likely to mean lower tax revenues for the government, lower value of exports and weaker economic growth. In addition Nigeria is not able to gain much of the benefits of its oil production as it does not have the ability to process it into fuel.

Discuss reasons why poverty is so high in Nigeria when the economy has been growing Inequalities of power and corruption may mean that the money earned from oil revenues are not used in a way that benefits many Nigerians (eg not used to improve education or infrastructure – both of which may lead to Nigerians being able to earn higher incomes) Many government officials are shareholders in the oil ventures Many people who live where the oil is to be found are very poor. Negative externalities associated with the oil industry have damaged the environment and made it even harder for them to make a living. The oil industry doesn’t employ that many people (relatively) and many of the people it does employ are not native to Nigeria (imported labour)

A lack of infrastructure is one barrier which prevents counties from engaging effectively in international trade. State and explain two others. (6 marks) Debt – High debt levels can mean countries have to use any revenue they gain to service and pay debt back rather than investing in infrastructure and education and other policies that may enable it to benefit from trade Education and Skills – low levels of educational attainment and skills mean that a country may be limited to producing low value goods that generate less export revenue and lead to lower income levels for workers. It may also mean productivity is lower making firms less competitive Location – some countries are landlocked which makes it difficult, costly and slow for firms to products to the countries of trade partners

Evaluate strategies that can be used to support growth in developing countries (10 marks) See revision guide…. Aid Trade Aid for Trade Debt Relief Investment Fair Trade Schemes NGOs

Evaluate the extent to which capital investment is important in achieving economic growth in developing countries (8 marks) Evaluate the extent to which improvements in infrastructure is important in achieving economic growth in developing countries (8 marks) Evaluate the importance of………

Define the following: GDP Gross Domestic Product. A measure of the total value of output goods and services produced in a country in a period of time GDP per capita GDP per head of population or per person. Calculated by dividing GDP by the population. Economic Growth The change in the total value of goods and services produced in a country in a period if time. Export A good or service produced in one country and sold to people or businesses who are not resident in that country. It results in money coming into the country

Compare the GDP levels in figure 12 with the GDP growth figures In general the less developed countries with the lower total GDP figures have the highest growth figures. This suggests that over time the countries are becoming more equal. This is due to catch up and convergence. LDCs can grow faster by using developed countries technology and production techniques. They also grow by shifting emphasis from lower value subsisdence agriculture to higher value manufacturing

Which countries in the table are most likely to be affected by a global economic downturn? Explain your answer Countries like Germany and Ghana are most vulnerable as a larger % of GDP comes from exports. Eg Germany 52% of GDP comes from exports compared to 32% in the UK Therefore if global incomes and demand falls they are likely to see a bigger overall fall in demand and growth as their exports fall. HOWEVER – it will depend upon what they sell. If they sell necessity products which have inelastic demand. The demand may hold up even If there is a global recession