Managing economic development Contrasting levels of development How can the gap between MEDCs and LEDCs be reduced?
How can the gap between MEDCs and LEDCs be reduced? Development of Tourism Multinational investment (TNCs) Appropriate Technology Foreign Trade and Aid These are the main methods the development gap between MEDCs and LEDCs can be reduced. There are both advantages and disadvantages of each. Development Projects
Multinational Investment A multinational or transnational (TNC) company is one which operates in a number of countries. The headquarters are usually in MEDCs but factories located in LEDCs. Some examples: Ford, Toyota, BP and Shell. Major profits go back to MEDCs They bring money into the country Environmental management is often poor They can lead to the development of other industry Working conditions can be poor They train local people and improve skill levels Wages are lower than in MEDCs They provide work and regular income Disadvantages to LEDCs Advantages to LEDCs
The development of tourism There are large numbers of popular places for tourists to visit in LEDCs. Some have been popular for many years such as Safari and beach holidays in Kenya . Building large holiday resorts can damage the environment It can help the development of a range of industries (building/farming) A large number of visitors can cause a lot of pollution It can help develop transport systems It can cause conflict with local people It can create many jobs Wages are often low It can bring in a lot of money Disadvantages to LEDCs Advantages to LEDCs
Development projects (large scale) The aim of development projects is to improve living standards. The Aswan High Dam (Egypt) was built to control the flow of the River Nile and provide a store of water that could be used when needed. The plan also included a large hydro electric power station. <ul><li>Benefits… </li></ul><ul><li>Nile no longer floods </li></ul><ul><li>Water is available for irrigation all year round (more food produced) </li></ul><ul><li>Cheap electricity is produced </li></ul><ul><li>Problems… </li></ul><ul><li>Less silt deposited so land is less fertile </li></ul><ul><li>Water evaporates quickly behind the dam </li></ul><ul><li>Fertiliser is added to the soil that pollutes the River Nile </li></ul>
Appropriate Technology (small scale) Appropriate technology – technology that its suited to the needs of the country Intermediate technology – matching the level of technology to the needs and skills of local people Sustainable development – improving living standards without damaging the environment or making anyone worse off Insert page 87 here
Trade, Aid and Debt Reducing debt – many countries spend a lot of valuable money simply paying off interests on debts. If countries reduce these debts, they could spend more on reducing poverty and developing basic services. <ul><li>Changing the terms of trade – trade between MEDCs and LEDCs often favours MEDCs because: </li></ul><ul><li>MEDCs protect their markets and do not always allow goods in from LEDCs </li></ul><ul><li>LEDCs export mainly primary goods which are low in price </li></ul><ul><li>The price of raw materials is usually determined in the MEDCs </li></ul><ul><li>There is a significant gap in price between the basic raw materials and the finished product and this difference is often earned by MEDCs </li></ul>