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The Changing Economic World

Closing the development gap, and tourism as a strategy

  • 3 things to know
  • Paper 2

Overview

Investment, industrial development, aid, intermediate technology, Fairtrade, debt relief and microfinance, criticisms of aid, how tourism brings income, jobs and infrastructure, and how far tourism has narrowed Jamaica's development gap.

What you need to know

Answer each one before you reveal it.

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Key term

How can building up industry reduce the development gap?

Key term

What is Fairtrade, and how does it help growers in poorer countries?

Key term

What is debt relief?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    How does foreign investment help to narrow the development gap?

    Model answer

    Overseas companies and governments put money into factories, mines, power and transport, which creates paid work and gives the host government tax income.

  2. 2

    How can building up industry reduce the development gap?

    Model answer

    Factory work pays more than subsistence farming and the goods can be exported, so wages, exports and tax revenue all rise together.

  3. 3

    What is international aid, and who gives it?

    Model answer

    Money, goods, skills or loans given to a poorer country to help it develop or to recover from a disaster, provided by governments, international organisations or charities.

  4. 4

    What is intermediate technology?

    Model answer

    Simple, low-cost equipment that local people can build, use and repair themselves from materials they already have, such as a hand-operated water pump.

  5. 5

    What is Fairtrade, and how does it help growers in poorer countries?

    Model answer

    A scheme that guarantees farmers a fair minimum price for their crop and adds a premium payment, which the community spends on things like schools and clean water.

  6. 6

    What is debt relief?

    Model answer

    The cancelling or reduction of money a poorer country owes to lenders, so the repayments can be spent on development instead.

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