4.3 Emerging and Developing Countries

Question 1

What is HDI?

Answer 1

• a measure of economic development with three equal weights: education, health and GNI per head at PPP

Question 2

What is the HDI rank between?

Answer 2

• 0 and 1
• the higher the value the higher the level of development

Question 3

How is the component of education in HDI measured?

Answer 3

• the mean number of years of schooling for an adult aged 25 and expected years of schooling for a pre-school child

Question 4

How is the component of health in HDI measured?

Answer 4

life expectancy at birth

Question 5

What are the advantages of using HDI to compare the levels of development? (4)

Answer 5

1. A broader measure than GDP per capita, considering factors beyond money/income
2. Consistent with the United Nations three essential contributors to development
3. Published annually by the UN so you can track progress over time
4. Uses standardised data so you can easily compare countries

Question 6

What are the limitations of using HDI to compare levels of development? (4)

Answer 6

1. too narrow as it only looks at three elements of development
2. it is only concerned with long-term development outcomes
3. it is an average and does not consider disparities and inequalities within a country (hides regional differences)
4. it does not take into account inequality, poverty or other measures of deprivation

Question 7

What are other measures of economic development?

Answer 7

• IHDI
• MPI
• GPI

Question 8

What is IHDI?

Answer 8

• inequality-adjusted HDI
• IHDI is equal to HDI when there is no inequality but falls below HDI when inequality rises

the difference between IHDI and HDI represents the loss in potential human development

Question 9

What is GPI?

Genuine Progress Indicator

Answer 9

• a holistic economic metric calculated from 26 different indicators grouped in three main categories: economic, environmental and social

economic - considers personal consumption with inequality and the cost of unemployment
environmental - considers the cost of pollution and CO2 emissions and depletion of natural resources
social - considers the value of housework, cost of crime, and the value of volunteer work

Question 10

What are some examples of GPI indicators?

Answer 10

• proportion of population with access to water
• energy consumption per person
• proportion of population with internet access

Question 11

What is MPI?

Answer 11

• Multi-dimensional Poverty Index
• it reports on money-based measures and considers multiple deprivations
• it indentifies deprivations across the 3 dimesions measured by HDI

Question 12

What is economic development?

Answer 12

the improvement in living standards and welfare over time as measured by the HDI

Question 13

What are the two categories of primary products?

Answer 13

• hard commodities: those that are mined or extracted e.g. coal, iron, oil, diamonds, copper
• soft commodities: which are usually agricultural e.g. rice, bananas

Question 14

What are the problems with being primary product dependent?

Answer 14

• price fluctuations
• low value added
• low YED
• soft commodities like agriculture are affected by natural disasters
• fluctuations in foreign currency earnings
• external costs e.g. environmental damage from mining