Understanding Globalisation, Development, and Economic Indicators
Globalisation: Advantages and Disadvantages
Today, goods are made and sold all over the world, thanks to globalisation. We are interconnected.
- Companies buy cheap goods from other countries (underdeveloped countries).
- Larger market access.
- Job creation.
- Cheaper products for consumers (e.g., from China).
Disadvantages of Globalisation
- Unemployment in some countries because companies move their factories to places with cheaper labor.
- Increased environmental problems, as underdeveloped countries often have less strict regulations.
- Some countries (e.g., in Africa) may become even poorer.
- Lack of advanced education systems.
- Limited technology.
- Diseases can spread more quickly (e.g., coronavirus).
- Cultures may lose their individuality.
Developed Countries (MEDC)
- High life expectancy.
- Export manufactured goods.
- Compulsory Secondary Education.
- Low birth rate.
- High status for women.
- High number of elderly people.
Less Economically Developed Countries (LEDC)
- Poor healthcare.
- Export of mainly primary products.
- High infant mortality rate.
- Low life expectancy.
- Low literacy rates.
- High employment rate in the primary sector.
- High proportion of young people.
- Limited access to clean water.
Free Trade
Developed countries buy raw materials from developing countries at low prices and sell finished products back at high prices.
Advantages of Free Trade
- Education.
- Infrastructure.
Disadvantages of Free Trade
- Natural resources exploitation.
- Poor working conditions.
Fair Trade
The Fair Trade Foundation was established to address the problems of global trade.
Global Trade Aspects
- Global chains.
- Transnational corporations (TNCs) involved.
- Fair trade helps.
What is Development?
- Access to secondary school and the ability to read and write.
- People are happier and healthier and enjoy life more.
- Involves building factories, providing jobs, and developing a country.
- Good hospitals and doctors.
- People have freedom and equal rights and are allowed to vote.
- Poverty reduction and improved living conditions.
When measuring the degree of development of a country, it is essential to study the concept of development. This allows for comparisons between countries or comparisons of a country over time.
The best way to differentiate is between Economic development and Human development. Human development measures the degree of people’s access to wealth, employment, knowledge, nutrition, health, leisure, and security, as well as political and cultural freedom.
To calculate the level of development of a country or region, geographers use different development indicators that vary depending on whether one wants to measure economic or human development (health, education, and wealth).
Key Development Indicators
Infant Mortality Rate
Number of babies who die under the age of 1 per 1000 live births.
Human Development Index (HDI)
An indicator measuring average achievement in three basic dimensions of human development: a long and healthy life, knowledge, and a decent standard of living.
Factors considered:
- Life expectancy.
- Health services.
- Poverty rate.
- Unemployment rate.
- Civil rights.
- Literacy rate.
- Availability of food.
- Access to clean water.
- Degree of gender equality.
GNI per Capita
GNI per capita is gross national income divided by the population of the country.
Gross National Income (GNI)
The total income for a country calculated by taking the value of goods and services and adding that to all other money received from abroad, converted into international dollars.
Life Expectancy
Number of years a newborn infant could expect to live.
Literacy Rate
Percentage of the population aged 15 and older who can both read and write.
What is Inflation?
In economics, inflation is a general increase in the price level of an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in purchasing power per unit of money, i.e., a loss of real value of the medium of exchange and unit of account within the economy.