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

    While developed countries still accounted for three quarters of the global trade in 2000, developing countries have seen their share climb to one third. The dominant factor behind this growth has been an increasing share of manufacturing activities taking place in developing countries, as manufacturers are seeking low cost locations for many stages of the production chain.

  2. Economic Growth HSC Notes

    o Reforms in markets with no foreign competitive such as public utilities and of industrial relations reduced business costs, gained higher efficiency which generated higher output growth. These reforms resulted in an economic transformation. o Supply-side factors such as new technology and innovation, increased emphasis on training and education aimed to elevate the quality of capital and labour inputs.

  1. Comprehensive Anatomy of China

    Considering the scope and significance of these functions, it's natural to assume that the NPC meets regularly to debate over these issues although this is not the case. Instead, a meeting with all the members that usually lasts less than a month is conducted once a year.

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

    Parts of the former are also already built into the WTO, especially in the SPS and TBT agreements. The EU, the lead demandeur on this issue, has got what it wanted into the new round, and perhaps more than it dreamed of achieving.

  1. Globalisation of GAP

    brand and gain a competitive advantage TV commercials or adverts in newspapers or the radio could cost the company millions as the advertising campaign may need to be a long term investment. In new markets research and development can also be very expensive as learning about the new market and customers is essential to do well in the market.

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

    Most African's hadn't received any school-based education at all. Somalia has the lowest primary school enrolment in the world, at 22%16 and the years of schooling a Somali child could expect if they were born today is only 1.817. Education and its effect through labour quality are generally found to be the most important contributors to economic growth18.

  1. Are recessions inevitable?

    A fall in real GDP, due to a fall in aggregate demand, would be dependant on how close the economy is to maximum capacity, hence the steepness of the AS curve. When an economy is near full capacity, a decrease in AD would have a smaller effect on real GDP.

  2. European background to the scramble for Africa (1850 to 1900)

    Leopold bribes the media in order to silence them. * Edmund Dene Morel, a British shipping clerk employed to oversee shipments to and from the Congo, Begins a campaign to expose the human rights abuses occurring in the CFS.

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