Closing the Development Gap

Closing the development gap: strategies

This development gap and development inequality is a pretty big issue that needs addressing. So, what are some of the methods or strategies that are needed to close this development gap? Let's take a look.

Investment

Investment in lower-income countries can help to increase economic growth. Foreign Direct Investment (FDI) is when large companies, such as Transnational Corporations (TNCs) set up business in the country of need, bringing money, building factories, creating jobs, improving skills and knowledge, and generally improving productivity, which can increase economic growth. Investment can also come from countries themselves, as well as large organisations, like the United Nations.

Tourism and industrial development

Tourism is a great way to bring money into a country. It creates jobs, allows the improvements of infrastructures, and benefits businesses and other sectors economically. Later in this explanation, we will discuss how tourism in one LIC has helped to reduce this development gap in much more detail. Also, the development of industries, like manufacturing, can provide jobs and boosts people's income and the economy.

Money, money, money!

Money truly does make the world go round, and it's a key strategy to reducing the development gap and improving development in low-income countries. Let's look at 3 financial support mechanisms; aid, debt relief, and microfinance loans.

Aid

Providing aid is the act of one country giving something to another country for support. Aid can actually come in many different forms. Money is one form, which can be provided to help fund projects to improve development levels. Aid can also be provided to countries that experience natural disasters, where emergency support is needed.

Debt relief

Debt relief is a little similar to financial aid; it involves removing the large debts that may have accrued over time. Countries may have large debts from borrowing money in the past that was originally needed for development, and now, cannot this money back. In some cases, loans were stolen by corrupt country leaders, leaving the poverty-stricken population unable to pay this back.

Microfinance loans

Microfinance loans are a little smaller than those big loans that are given to whole countries. These loans help to fund people at a local level, by providing small amounts of money to individuals to support development, for example, subsistence farmers that can use the money to exit poverty.

Intermediate technology

Using technologies that are appropriate for a specific country, can be known as intermediate technology. It involves taking more knowledgeable concepts and combining them with simpler solutions. Intense technologies are often not suited for poorer countries, as people may not have the skills to use them properly, therefore using technologies that are easier to use is much more beneficial.

Fig. 2 - a sari is being used to cover the pot to collect water.

Fairtrade

You've probably seen the Fairtrade logo before, on things like chocolate, or bananas, for example. The Fairtrade scheme means that farmers in producing countries are paid properly, to improve their livelihoods. Fairtrade also includes things like health schemes. This helps to improve the development levels of smaller and poorer areas.

Closing the development gap: challenges

Reducing the gap between the world's richest and poorest countries isn't an easy ride. There are challenges and obstacles that can drastically impact how the development gap can be reduced. Let's briefly bullet point some of the factors that could hinder the attempts to reduce this development gap.

• Some countries are more vulnerable to major natural disasters, which can drastically hinder economic development. Many countries are also going to be much worse off as climate change takes hold, making natural disasters more common and more severe; aid could be given to help redevelop after a major natural disaster, to only be followed by another, and another...
• Some countries have ongoing conflicts, which can make investment and development much harder.
• Some governments are corrupt, which makes it much less likely for other countries to invest. Some countries are even completely closed off to outside support, such as North Korea.
• Although investment from TNCs into countries brings benefits, inequalities are still a major problem here; they exploit workers for cheaper labour, and can often be super harmful to the environment.
• Although tourism has its benefits, it can bring many issues with it (more on this later).

Closing the development gap: example

Tourism, as we have already mentioned, is a great way to bring money into a country, and therefore improve development to help to reduce this global development gap. In geography, we love a case study. So, let's take a trip to Tunisia, the tourist destination of North Africa.

Fig. 3 - Tunisia, located in northern Africa, map data: © 2022 Google

Tunisia, surrounded by Libya, Algeria, and the Mediterranean Sea, was once a low-income country, with agriculture being its main source of income. That was until tourism began to boom! Tunisia actually has many benefits as a tourist destination; it has a warm climate, there is culture, such as UNESCO World Heritage sites, natural beauty, and people can travel there pretty cheaply, with things like package holidays. As a result of increased tourism, the economy has benefitted dramatically, from money being spent on hotels, as well as money being funnelled into local businesses and the agricultural/food sector. Tunisia is now pretty wealthy; people have more money, and other development indicators have improved, such as health and literacy levels.

Fig. 4 - a view from a hotel balcony in Tunisia