Economy and Development

Geographically speaking, the economy is concerned about the distribution of economic activities
explaining why those activities take place in specific locations and the consequences for people,
countries and environment.

Geographers study the economy because it is the foundation of a country’s wellbeing. The
economy has a system that is divided into four different sectors: primary, secondary, tertiary and
quaternary.

· Primary sector: Is concerned with the collect and use of natural resources
· Secondary sector: The industrial sector that process resources into goods that people want
· Tertiary sector: The sector that enables goods to be traded
· Quaternary sector: This sector includes government, banking, financial management, etc and
their function is transmission and processing of information and knowledge. Also, looking for new
technologies that provide better ways to export/import and the economic develop of a country.

Geographers study the changing interaction between the user of space in the form of transport,
trade, flows of money and telecommunications. They examine the impact of economic change and
developments on peoples and environment. The balance between the various sectors of the
economy varies with the level of development of a country.

The UNDP (United Nations Development Program) and the World Bank have some indicators that
they use to measure the economic development of a country. The two most common are the GNI
and GDP. The GNI, Gross National Income (PBN), it is everything produced by a country wherever
they are in the world. For example, Havanna works in Argentina and eight different countries. All
the incomes and outcomes produced by Havanna are included in the measure of the GNI of
Argentina. The GDP, Gross Domestic Product (PBI), it is the value of everything made in a country.
This no include foreign companies working in a country. For example, Nissan, who is a Japanese
company, have many factories all over the north of the UK. All the incomes and outcomes
produces by Nissan are not included in the measure of the GDP of UK but are included in the GNI
of Japan.

The different levels of development of countries produce an unequal world….

AN UNEQUAL WORLD
The Brandt Report is the report written by the independent commission to review international
development issues. The Brandt Report pays attention to the economic inequalities in the world,
by the simple concept of the rich north and the poor south, apart from that, they made
recommendations to improve matters, but none of these has ever been fully implemented.

Why less developed countries have increased the debt?

Many countries have problems to repay mounting interest out of diminishing export revenue and
have been obliged to take out further loans. These loans through structural adjustment programs
(SAP) imposed strict conditions; those obliged the receiver to cut back on healthcare, education,
causing deterioration in the quality of life of the population. In addition Report suggest that world
leaders to plan a major international relief program, target in hunger and poverty.

The gap between the richest countries and the poorest is known as the development gap.

Who bridges the gap?

Much of the world`s wealth is in the hands of the G8/ MEDCS nations and most TNC originate in
them. MEDCs also have de controlling stake in institutions such as the IMF (International
Monetary Fund) and the World Bank, and 80 % of world trade occurs between these countries.

MEDCs: Spain and Denmark

G8: Canada, France, Germany, Italy, Japan, Russia, UK and USA.

Globalization and Global Shift

…All these topics that my partner explained are connected with globalization.

Globalization is a common term in business and economic geography. It`s the way in which
economies and societies are interlinked. Also Brands are known worldwide and are potentially
destroying local diversity.

Globalization takes three forms:

Political: the increased influence of western democratizes

Cultural: how easy some ideas or information are passed from one country to another

Economy: the growth of TNCs

TNCs like multinational enterprises, for example P&G, that began with one product,
Gillette, and after that they increased their household products and form a new global company.

Other TNCs is VW (Volkswagen) that grows in West German and then obtains other companies
and producers in Europe. That let the expansion of VW on each continent. After that, VW started
to develop an up-market arm making luxury cars, using new technological factors.

TNCs are global interconnected, based to need the worldwide sales

One of the consequences of this globalization is Global Shift.

Global shift involves the movements of the economic activity, for example:

-Cultural consequences: economic migration. They search for a economics wellbeing.

-Less regulation of companies: privates companies may have the same rights as national
governments.

-Falling returns on primary products: reducing the income of countries supplying raw material and
food.

Activities:

· Explain how the four sectors of the economic system works with this economic activity: The
production of Wine
 · Find a connection between the main topics we described, Globalization, Brands, Economic
development, with the short story Brand Ethiopia or any of the Millenium Goals.