Managing differences in development
The development gapThe difference in levels of development between the richest and poorest countries in the world. is the difference in levels of development between the richest and poorest countries in the world. Many believe that the gap between the high income country (HIC)A country with a gross national income per capita above US $12,735 (according to the World Bank) such as the Netherlands and the UK. and low income country (LIC)Based on the World Bank's income classifications, a LIC has a gross national income (GNI per capita) of $1,045 or lower. is getting wider. Reducing the development gap would lead to an increase in the quality of life for millions of people around the world.
Learn about how environmental, economic, and social factors affect a country's development.
Measures to reduce the development gap
There are lots of ways that can help to reduce the development gap.
| Investment | Large companies can locate part of their business in other countries. This helps a country to develop as the companies build factories, lay roads and install internet cables. |
| Aid | Aid is when one or more countries give money to other countries. The money has to be spent on things that will benefit the population. |
| Using intermediate technology | Intermediate technology is using equipment and techniques that are suitable for their country of use. Many poorer countries do not have the skills to maintain expensive equipment. Small-scale, basic solutions are usually more appropriate. |
| Fairtrade | Fairtrade is paying producers a reasonable price for the goods that they produce. Many farmers in LICs are paid very low wages. This means that they cannot escape poverty. Fairtrade gives farmers a better chance in life. |
| Debt relief | Many LICs owe money to other countries. Often the repayments and interest are so expensive that indebted countries have no money left to spend on development projects. Debt relief is when debts are either reorganised to make them more manageable, or reduced. |
| Microfinance loans | Microfinance loans are when money is lent to LICs to help them to develop. These are often small loans with reasonable interest rates. They are available to people and businesses who may normally struggle to get credit. |
| Investment |
| Large companies can locate part of their business in other countries. This helps a country to develop as the companies build factories, lay roads and install internet cables. |
| Aid |
| Aid is when one or more countries give money to other countries. The money has to be spent on things that will benefit the population. |
| Using intermediate technology |
| Intermediate technology is using equipment and techniques that are suitable for their country of use. Many poorer countries do not have the skills to maintain expensive equipment. Small-scale, basic solutions are usually more appropriate. |
| Fairtrade |
| Fairtrade is paying producers a reasonable price for the goods that they produce. Many farmers in LICs are paid very low wages. This means that they cannot escape poverty. Fairtrade gives farmers a better chance in life. |
| Debt relief |
| Many LICs owe money to other countries. Often the repayments and interest are so expensive that indebted countries have no money left to spend on development projects. Debt relief is when debts are either reorganised to make them more manageable, or reduced. |
| Microfinance loans |
| Microfinance loans are when money is lent to LICs to help them to develop. These are often small loans with reasonable interest rates. They are available to people and businesses who may normally struggle to get credit. |