Development Gap - the divide between the rich and the poor
- The richest 20% consume 80% of the world's resources and the poorest 20% earn only 1.3% of global income
The North-South divide and Income Distribution
- a simple model which separates the wealthy 'north' with the poorer 'south'
- the pattern is too simple as it hides areas of growing wealth, such as the Asian Tigers and China/India
- it also fails to recognise that countries have their own income gaps within them, with regional wealth inequalities
- even the poorest countries have wealthy people within them - LEDCs have the worst income distribution:
- the wealthy elite (10%) get around 40% of national income
- 10% of the people surviving on 1-2% of national income
- in many countries the development gap is an urban vs rural gap, especially in LEDCs where urban areas usually have better services and more opportunities
'Bridging-the-Gap'
- Some countries are in the process of 'bridging the gap'
- For example, the Asian Tigers (Singapore, Taiwan, Hong Kong and South Korea) have developed so much, mainly through export-led growth, that they are close behind the MEDCs, and certainly have a large amount of economic power
- Globalisation of businesses, trade and TNCs are the main ways in which this has occurred
- Economic growth is still the main way in which the development gap will be narrowed
Uneven distribution of growth
- The most powerful MEDCs, such as G8 countries, continue to grow
- NICs see the most rapid growth
- RICs (Thailand, Malaysia...) are beginning to grow more quickly
- LEDCs are hardly growing at all
- income FCCs (Former Communist Countries) may be negative
Narrowing the gap
- The UN's Millennium Development Goals set a series of targets to narrow the global development divide by 2015
- progress is being made, but in places such as Africa especially there is a huge amount of work that needs to be done, and consequently many countries have not met these goals
- trade is one of the obstacles to further progress, as some trade is unfair - largely due to taxes and tariffs on export and import items
- debt is also a huge issue - total debt as % of GDP for sub-Saharan Africa = 70%
