• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Limits to Growth

Extracts from this document...

Introduction

´╗┐Primary product dependency ? Comparative advantage ? means exports one g/s, imports everything else, so very dependent on one commodity, e.g. Zambia almost 100% dependent on copper. A natural disaster could ruin whole crop, e.g. earthquake ruined much of Chilean wine industry. ? Structural distortion Developed countries pose further problems as they will only import raw materials, and choose to manufacture these themselves. E.g., CAP mean dumping and developing countries cannot compete. Therefore; developing countries cannot process them (e.g. value added) and move into secondary sector. They lose the job chain that would normally result. Primary sector is not very productive (Lewis model). ...read more.

Middle

Therefore difficult to attract FDI; this presents an obstacle to development. Jeffrey Sachs says landlocked countries e.g. S-S Africa at a disadvantage, e.g. high in mountains, lack of navigable rivers. Means harder to trade and CoP much higher. Transport is 14% of exports in landlocked countries. Savings gap ?Already in a poverty trap, low GDP per capita means little saving by individuals? Harrod-Domar suggests this means they cannot invest, preventing economic growth from occurring. Corruption and war ? bribery, extortion, diversion of resources by government ? this is an inefficient allocation of resources and restrains development. Government officials embezzle money rather than spend it on public services or investment. ...read more.

Conclusion

Labour becomes more expensive, so higher CoP, and can attract less FDI. Sub-Saharan Africa has 2/3 of the world?s AIDS sufferers. Resources diverted from growth to treating AIDS. Education - a huge investment in human capital through education has allowed China to shift out its PPF. Countries with little education investment and low school enrolment are likely to have low productivity and little economic growth. It will mean more FDI in the future as firms will not have to train workers. Debt servicing - LEDCs borrowed in 1980s. Since then, fall in value of their currency, compared to $, so have to pay back more; oil prices have increased. Capital flight ? companies and individuals place cash, buy shares and assets abroad, contributing to savings gap, and reduces tax to government. Fact file on Mexico, Page ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Why has GDP growth been so slow in Somalia?

    Manufactured goods, meanwhile, tend to be produced under more monopolistic conditions. Any technological innovation is likely to result in lower prices for the competitive primary producers and higher prices for the monopolist producers of secondary products.

  2. The HIV/AIDS pandemic

    Economic growth: It is estimated that HIV/AIDS reduced per capita growth rate of Africa during the 1990s by 0.8% per annum.

  1. Growth is the most powerful weapon in the fight for higher living standards - ...

    Macro economic stability, the efficient allocation of resources and integration into a global economy increase the rates of return on capital and labour and attract investment enabling higher economic growth. Good governance and legal stability underpin the effectiveness these three strategies.

  2. Where does the World Trade Organisation fit in the overall scheme of international public ...

    the past two years, but evinced no real progress until fairly recently. Considerable progress, however, was made after July/August last year, and by the time of the Doha Ministerial about half the approximately one hundred implementation issues were resolved. These are contained in a separate Ministerial Decision issued at the end of the Doha Ministerial.

  1. Globalisation of GAP

    If the business is not familiar with the language of the new market it can cause problems in communicating with employee's directors and employees. This could then lead to problems in making decisions and implementing any changes. Also setting up in a new market can have very high start up costs.

  2. CRITICALLY EVALUATE THE THEORIES OF ABSOLUTE ADVANTAGE (ADAM SMITH MODEL) AND COMPARATIVE ADVANTAGE (DAVID ...

    = 2/1. This means the U.S. is twice as productive as France in cheese production. In wine production, the U.S. advantage is (1/2)/(1/5) = (2.5)/1. This means the U.S. is two and one-half times as productive as France in wine production. The comparative advantage good in the U.S. then is that good in which the U.S.

  1. Foreign Aid

    inputs into education, health, social welfare and general infrastructure programmes, which the private sector cannot supply. Thereby leaving a government with limited financial resources no other option but to seek help from abroad in order to develop its domestic economy.

  2. Emergency Economic Recovery Program From the United Nations International Report, Vol. I, no. A1

    spending and a growing concern about the current uncertainty that has prompted people to convert gourdes into dollars. The gourde's fall has brought an upsurge in the cost of living, with inflation now running at an annual rate of nearly 24 percent, based on a 1.9 increase in February, compared with about 8 percent for the last fiscal year.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work