Population and urbanisation, Year 11: closing the development gap

Intermediate technology (also called appropriate technology)

HintHalfway between a hand tool and an expensive imported machine.

The whyA hand pump for a village well is a typical example. It uses local materials and skills, so it keeps working when something breaks. An expensive imported machine may stand idle for want of fuel, spare parts or a trained engineer. The idea was set out by the economist E. F. Schumacher, who helped found the Intermediate Technology Development Group in 1966.

loan

HintThe borrower returns it later, a little at a time.

The whyPeople on very low incomes often cannot borrow from an ordinary bank, because they have no property to offer as security. Microfinance lends them small sums to start or grow a business, such as buying a sewing machine or stock for a stall. The modern idea grew from the work of Muhammad Yunus and the Grameen Bank in Bangladesh in the 1970s.

Money that went on repayments can be spent on health, education and infrastructure

HintThink about what a family could do if its monthly bill to a lender stopped.

The whyThis is debt relief. A scheme run by the International Monetary Fund and the World Bank since 1996 has cancelled debt for more than thirty countries, on condition that each has a plan to spend the savings on reducing poverty. The risk is that a country borrows heavily again, or that the saved money is not spent as promised.

Premium

HintThe same word is used for a monthly insurance payment.

The whyThe minimum price protects farmers when world prices fall. The extra sum goes to the farmers' or workers' organisation, whose members decide together how to invest it. Fairtrade helps the producers who belong to a scheme, but they are a small share of all farmers, so on its own it cannot close the development gap.

Investment (foreign direct investment)

HintUnlike aid, the giver expects to earn something back.

The whyInvestment brings money, jobs and skills, and can start a multiplier effect as wages are spent in local shops and services. The risks are that much of the profit leaves the country, and that any loans taken on for the project have to be repaid.

The profits go abroad to the foreign owner

HintFollow the takings to head office.

The whyWhen tourists book through foreign airlines, tour operators and hotel chains, a large part of what they pay never reaches the place they visit. Tourism helps most when hotels are locally owned, staff are local and food and supplies are bought nearby. Use this idea when you judge how far tourism has helped the country in your own example.

indirect

HintThese workers never meet a guest.

The whyJobs in hotels, restaurants, transport and guiding come straight from tourism. Jobs in the businesses that supply them, or that sell to tourism workers, come from it at one remove. Counting both gives a truer picture of how much tourism adds to an economy.

Income depends on events outside the country's control and can vanish suddenly

HintA resort cannot fill its rooms if flights are grounded.

The whyThe UN's tourism agency reported that international arrivals fell by about three-quarters in 2020 because of the COVID-19 pandemic. Natural disasters, conflict or a recession in the visitors' home countries can have the same effect on one destination. A country is safer if tourism is one of several industries.

infrastructure

HintOne word for the basic networks a country runs on.

The whyInvestment made for visitors can benefit everyone: a better road lets farmers reach markets, and a reliable power supply helps other industries to set up. The benefit is uneven, though, if the improvements are only in the resort areas.

It can pay for public services such as schools and health care

HintThink about what a government provides for its own citizens.

The whyTourism brings in foreign currency and gives the government more to spend. Whether that reduces the development gap depends on how the money is used and on who gets the jobs. In your own example, look for evidence of spending on education, health and clean water.