Why some countries are richer than others Cambridge IGCSE Economics (9–1) revision
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In plain words
The gap between the richest and poorest countries is vast: income per person can be fifty times higher in one than in another. The causes feed on each other, which is what makes the gap hard to close.
Low income means little saving, little saving means little investment, and little investment means income stays low.
5 things to know
- Developing countries tend to have lower income per head, lower productivity, faster population growth, and a large share of workers in the primary sector.
- Low saving leads to low investment in machinery and infrastructure, so productivity and incomes stay low. This is the cycle of poverty.
- Education: fewer children finish school, so the workforce is less skilled. Healthcare: life expectancy is lower, and illness keeps people from working.
- Natural resources help only if they are used well. Depending on one primary export is risky, because its price can swing widely.
- Consequences: big differences in living standards, migration of workers to richer countries, and reliance on foreign aid, loans and investment.
Tips and tricks
- Link the factors in a chain when you explain them: low income, so low saving, so low investment, so low productivity, so low income again.
- Use the terms "developed" and "developing" with a reason: name the indicator, such as income per head or share of jobs in the primary sector.
It lands in your notebook with its questions as flashcards.
Why some countries are richer than others: 5 questions and answers
These are the quiz’s questions. Do the quiz first, then come back here for the ones that got you.
Which is typical of a developing country?
Many people still work in farming.
Why is productivity often low in developing countries?
Workers with few tools and little training produce less each.
What is the cycle of poverty?
Each problem causes the next, and the last causes the first again.
Which would most help a developing country to raise its productivity?
Better roads, power and equipment let workers produce more.
Why may poor healthcare slow a country's development?
A healthy workforce produces more.
Quiz
5 questions
Tap an answer and you’ll see straight away whether it’s right, and why.
Worksheet
3 questions, 8 marks. Write your answers on paper, then check them.
Why some countries are richer than others
Cambridge IGCSE Economics (9–1) 0987 · 8 marks · papermunch.org
Name ______________________________ Date ______________
State two features of a typical developing economy.[2]
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Any two of: low income per head, low productivity, fast population growth, a large primary sector, low saving and investment, lower levels of education and healthcare.
Explain how low levels of saving can keep a country poor.[3]
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With little saving, banks have little to lend, so firms cannot invest in machinery and the government cannot build infrastructure. Productivity stays low, so incomes stay low and people still cannot save.
Explain why relying on the export of one primary product is risky for a country.[3]
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The world price of a primary product can change sharply. If it falls, or the crop fails, the country's export earnings and incomes fall, and it has little else to sell.
Answers: Why some countries are richer than others
- 1. Any two of: low income per head, low productivity, fast population growth, a large primary sector, low saving and investment, lower levels of education and healthcare.
- 2. With little saving, banks have little to lend, so firms cannot invest in machinery and the government cannot build infrastructure. Productivity stays low, so incomes stay low and people still cannot save.
- 3. The world price of a primary product can change sharply. If it falls, or the crop fails, the country's export earnings and incomes fall, and it has little else to sell.