Developing Countries Ch Developing Countries Ch. 17 Notes The best way to improve the lot of impoverished people in all nations is with economic growth and development.

A developing country is a country whose average per capita GNP is a fraction of that in more industrialized countries. About a billion people worldwide live on the equivalent of less than a $1.00 a day.

Obstacles to economic development in developing countries. 1. Population Growth – this grows at a rate much faster than the population of industrialized countries. More people to feed and greater demand for services like education and health care. 2. Natural Resources and Geography – limited natural resources, such as unproductive land, harsh climates, and scarce energy needed for industry, also can hinder economic growth. 3. Disease and Substance Abuse – health is a major problem. Families have lost their primary income providers due to Aids, bird flu, illegal drugs.

4. Education and Technology – lack literacy and high level of technical skills needed to build an industrial society. 5. External Debt – money borrowed from foreign banks + governments. They may never be able to repay the loans on the interest on the loans. 6. Corruption – this is harmful because it redirects resources into less productive uses. It also makes a few people rich while robbing everyone else. 7. War & It’s Aftermath – Civil wars lead to loss of life, prosperity and damage to infrastructure. Use of chemical weapons and land mines destroy the land. 8. Capital Flight – Legal or illegal export of a nation’s currency and foreign exchange. Destroying their currency to get currency with a higher value (Dollars)

Globalization Economic Challenges Ch. 18 section 1 and 2 Notes

Globalization Characteristics and Trends Globalization is taking place due to voluntary decisions we make as consumers -we buy products from around the world and we want cheap prices Examples of Globalization include the following: 1. people buying foreign products 2. firms expanding operations on a global scale to cut expenses (labor expenses)

Fair Trade vs. Free Trade Free Trade: no trade barriers (tariffs or quotas) between trading nations Fair Trade: calls for reform to international trade in which everyone has an equal chance to benefit and every worker has a chance to earn a livable wage. It does not allow for companies to take advantage of cheap labor and natural resources in other countries

Global Production Multinational is when a company conducts business in more than one country EXAMPLE: Ford headquarters is in Dearborn Mi. but has operation facilities around in the world (Canada, China, India) Outsourcing- when a company hires an outside firm to complete specific tasks -outsourcing is another way for a business to lower costs of production, which leads to lower prices for their products -Examples: Apple hiring workers in India for tech support School districts hiring bus drivers/custodians from an outside company

The Demand for Resources Nonrenewable resources – resources that cannot be replenished once they are used Examples: oil (fossil fuels), natural gas, coal OPEC- Organization of the Petroleum Exporting Countries -The members are Algeria, Angola, Ecuador, the Islamic Republic of Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates & Venezuela. -they control the price of oil because they are the main producers of oil for the world market -they are a monopoly and with more industrialization (India & China), there is more competition for oil. Therefore, we are paying higher prices for the oil that we purchase for use in the United States