Origin of disparities

Absolute Poverty: When people don't have enough money to afford their daily needs. The UN usually classifies anyone earning less than $1 or $2 to be absolutely poor.

India: Half a dollar is adequate says panel - BBC article

Relative Poverty: When people have less than the average in the community or country that they live in. For example someone would be considered relatively poor if everyone in their community can afford a car, television and a computer, but they cannot.

Poverty Ranking is all Relative - BBC article

Poverty line (or threshold): The minimum level of income deemed necessary to achieve and adequate standard of living in a given country.

One in three children in Wales live below the poverty line - BBC article

Income gap: The income gap between the richest and poorest in a country.

Income gap is widening data shows - NY Times article

Polarisation: When a country or area becomes divided. One half a country might become richer, while the other half becomes poorer.

Inequalities or Disparities: When there is a difference in the way people are treated or paid or there is a difference in the amount of money and possessions they own.

Health inequality gap widening - BBC article

Marginalisation: The process of an individual or group of people becoming separated from the majority. People may become marginalised because of their age, race, religion, economic status, etc.

Wants: Things that people like to have, but don't necessarily need e.g. televisions, Blackberries and holidays.

Needs: Things that people need to survive. Needs include water, food, shelter and clothing.

Formal Economy: The sector of the economy that is taxed, monitored and regulated by the government. The formal economy is included in a country's GDP, GNP and GNI.

Informal Economy: The sector of the economy that is not taxed, monitored or regulated by the government, it is sometimes referred to as the black market. The informal economy includes illegal activities like the drugs and sex industry, but also begging, show shining on the street or selling counterfeit DVDs.

Unemployment: When people don't have job.

Underemployment: When people are employed in a job below the skill/education level they are qualified for. For example a trained doctor working as a security guard.

Benefits/Welfare: Money provided by the government to people that are unemployed, unable to work or earning a salary below the poverty line.

Distribution: The way things are spread out. You might describe how a population is spread out or how the income within a population is spread out.

The Brandt Line The Brandt line is am imaginary line that a German politician drew across the World in the 1970's. He basically said that there was a north/south divide. He believed that the north was richer and the south was poorer. Although the line might have been partially true in the 1970's when communism was at its strongest, many things have since changed. Communism has collapsed and many countries of the former USSR (north of the line) are considered to be relatively poor e.g. Belarus, Uzbekistan and Turkmenistan. Other countries like Greece, Portugal and Ireland also north of the line are suffering from massive debt crises. On the other hand there are many countries south of the line that have experienced rapid development. The BRICS countries of China, India, Brazil and South Africa are all south of the line. Other countries like South Korea, Singapore, Argentina and Chile have also experienced impressive growth and have per capita GDP higher than many countries north of the line. Now the line is only really useful as a topic of debate to discuss economic changes over the last 40 years.

Factors Causing Disparities in Wealth

Residence: Where you live can be very important in determining your wealth. This might mean your residence of birth e.g. Japan or Afghanistan. If your are born in Japan you are much more likely to be free from conflict, receive an education, enjoy a good diet, have a roof over your house, get a job and live comfortably. However, it might also mean your personal residence (your house). If you live in a solid house that protects you from the weather and if you have a water and electricity supply then you are more likely to remain fit and healthy, be able to work and be relatively well-off. However, if you live in an informal settlement e.g. a favela in Rio, then you are unlikely to have a reliable electricity supply, or running water, or an inside toilet with sewers, or rubbish collections, or a secure structure or even legal ownership of the land or house. Therefore, you are more likely to suffer from ill health, be affected by natural disasters and risk eviction at anytime. If this is the case you are more unlikely to be able to work, be able to secure loans and increase your wealth.

Rio Olympics: Favela poor evicted as city spruced up - BBC article

Ethnicity/Religion: Some ethnic or religious groups can become marginalised and struggle to escape from poverty. This might be because the political leaders are from a certain ethnic group or tribe and they favour people from that group. Alternatively it might be immigrant groups are discriminated against and only be able to work in the informal economy or be exploited.

Migrant workers being exploited - BBC article

French Muslims face job discrimination - BBC article

Parental education: If your parents are educated it is more likely to mean that they have a good job and can afford all of life's needs (housing, food, etc.). If your parents are employed it is also more likely that they can afford to send you to school giving you a head start in life.

Personal education: Again if you have been educated you are more likely to get a job, stay healthy and become wealthier. In summary people who are educated are likely to see their income and wealth rise, while people who are illiterate won't be able to find a job or only find a poorly paid job.





Diet: If people are undernourished or suffer malnutrition they are more likely to become weak and sick. If they are sick and there is no government welfare then they are unable to earn money and becoming poorer. Many LEDCs, especially in areas like the Sahel (south of the Sahara) see large scale undernourishment (famine) and poverty. The elimination of hunger and poverty are both Millennium Development Goals.

Land ownership (tenure): Private ownership of land is an important factor in allowing people to grow food and generate income. If you have land you can at a minimum live a subsistence lifestyle, but more likely be able to sell surpluses or secure a loan against the value of land. Sometimes females may struggle to avoid poverty because they are unable to inherit or own land.

Sex: In many societies males are still favoured over females in terms of education, ownership and employment. In some countries like Saudi Arabia females are not able to drive themselves and many believe should not even be allowed to work with men. If you are unable to work you become dependent and are unable to increase your personal wealth. Fortunately the emancipation of females is becoming more widespread around the world.

The Saudi women taking small steps for change - BBC article

Water supply: If a region is rich in water then not only can they increase agricultural output and support industry, but it can also support a large population increasing the wealth of the area. However, if an area is very arid (desert environment) or only has polluted water available then a region will find it hard to create investment and growth. If a region is also regularly suffering from drought conditions it is more likely that its population is suffering from famine and dehydration and therefore less able to work.

Drought deepens poverty, starving more Africans - NY Times article

Income: If a country or individual already has a good income or wealth it is easier to generate more wealth. Individuals can not only ensure that they have a good residence and a healthy diet, they can also borrow money more easily to invest. Some organisations like the Grammen Bank in Bangladesh are trying to improve micro-credit for poor people so that they can start investing in their businesses and growing their wealth - although not everyone agrees it is the best solution (see article below).

Microcredit death trap for Bangladesh's poor - BBC article

Resources/Raw Materials: If a country is resource rich then they are able to earn money through exports. The Gulf countries of Bahrain, Qatar, UAE and Kuwait are good examples who have manged rapid economic growth because of their natural resources (oil and gas). Other countries like Syria and Jordan who have less resources find it hard to develop.

Mongolia on verge of mineral boom - BBC article

Physical geography: Some countries remain poor because of a shortage of natural resources, unfavourable climatic conditions (too hot/cold), mountainous land or because they are landlocked. Landlocked countries like Rwanda, Mongolia and Niger find it harder to trade because any imports or exports have to travel through a different country who may charge them duties.

Why Some Countries Remain Poor

Transportation: Areas or countries with good transport links (roads, railways and airports) are usually able to enjoy economic growth because they are interconnected with other regions and are able to trade. Physical conditions like mountains or natural disasters can make transport hard. China is trying to promote economic development in its regions by building new railways, roads and airports. China recently opened a railway to Lhasa (the capital of Tibet). China claims this is to help development although others might argue that it is to increase control.

First Beijing train reaches Lahsa - BBC article

Communication: Countries with very fast internet connectivity like South Korea find it very easy to communicate with the rest of the world. This allows them to understand and enjoy the benefits that globalisation bring, hopefully making them more wealthy. However, other regions have no internet and no mobile phone coverage making trade with the outside world much harder and therefore limiting their ability to develop. The BBC conducted an interesting experiment when it removed the internet from some South Korean families and then gave it to a Nigerian village to see what affects it would have - two short commentaries below tell the story.

Energy supply: For industry to be successful it needs a reliable energy supply. Therefore countries with national grids covering the entire country can enjoy more even growth. However, regions that don't have power e.g. Mongolian steppes will find growth and development much harder.

Employment: If a country has high unemployment and or high underemployment then the country is more likely to suffer from poverty. Also if a country has a large informal economy it might suffer from poverty because workers are exploited and don't receive any benefits if they are hurt and unable to work.

Colonisation: Many countries feel that colonisation has slowed there current development. Colonisation may have hampered current growth because there resources and workers were exploited (or even killed), large debts to the former colonial powers were created, they were unable to create there own administrative systems, locals remained uneducated and unskilled as jobs went to the colonial powers and they lack behind in the development of democratic systems. There are currently many African countries in this situation like DR of Congo, Ethiopia and Burundi.

Exploitation: Some regions and countries that are rich in resources are often exploited by TNCs or other countries. One such region is the Niger Delta in Nigeria which is rich in oil. Locals argue that through a combination of government corruption and TNC exploitation they have seen no economic development despite the wealth of the area. In fact many locals say that they have economic decline because of environmental damage caused by the extraction of oil. The Youtube clip below might be considered to be propaganda but it certainly gives an indication of locals feelings.





Corruption (kleptocratic): Many regions struggle to escape from poverty because of corrupt governments, companies or individuals. some countries like the Democratic Republic of Congo have enormous resources but still remain in poverty. The DR of Congo has not only suffered successive corrupt governments but was also exploited by its former colonial power (or leader). King Leopald of Belgium treated the DR of Congo as his own personal domain and stripped it of much of its natural and human wealth.

DR Congo, a land of greased palms - BBC article

Kenya corruption costs government dearly - BBC article

Debt: Some countries are so heavily in debt that they spend the majority of their income paying off debt interest and are unable to invest in infrastructure to stimulate growth. The World Bank and IMF are now assisting some countries that are heavily in debt to try and alleviate their populations from poverty. The countries that the IMF and World Bank are trying to help are known as HIPCs (Highly indebted poor countries). To receive help they have to prove that they have democratic and uncorrupt governments.

Origins of Debt The debt problems of many LEDCs started after decolonisation (independence). Many countries after independence were encouraged to borrow money to invest in infrastructure projects. Money was available because: The discovery of oil and rise in oil prices in the 1970's meant many OPEC countries had huge reserves OPEC countries invested many of their reserves in western banks At the time low interest rates meant that poor countries were encouraged to take large loans from western banks Dictators of many poor countries took the borrowed the money themselves rather than investing it in their countries Rising interest rates meant that loan repayments increased Many currencies of LEDCs also fell in value making repayments more expensive Lack of previous investment in the economy meant that the countries were generating very little income The factors above meant that many countries had crippling debt and started to default and were forced to take out very strict loans from the IMF and World Bank.

Problems Caused by Debt High levels of debt can cause many problems including. Many of the problems below can lead to a spiral of decline: Reduced investment in essential services like schools and hospitals Reduced investment in infrastructure projects like roads, ports and airports High levels of unemployment Increased taxation on individuals and companies to pay debt Increased reliance on aid Imposed reform in order to get debt e.g. former SAPs imposed by IMF Possible default Problems of raising future capital (poor credit rating)

Economic Growth or Collapse: Some countries experience rapid growth e.g. the Asian Tigers (Singapore, Malaysia, South Korea) in the 1980's or the BRICS countries currently alleviating millions from poverty very quickly. However, countries can also see rapid economic decline leading to unemployment and people falling into unemployment. The current credit crunch and global recession has meant many countries like Greece, Ireland and Portugal and see a fall in wealth.

Greek debt crisis: Straw says Eurozone will collapse - BBC article

Outlook for Asian tigers unsteady - BBC article

Cycle of Poverty: This a cycle that many individuals, communities or even countries get stuck in. For example if people don't have very much money then they can not invest in land or agricultural products. If they can't grow anything they often suffer from malnutrition (undernourishment). If they are hungry they are more likely to get sick, if they get sick they are unable to work and earn any money. If they have no money they can't invest in land or agricultural products. The only way to break this cycle is normally through government or NGO (charities) schemes aimed at targetting the poor and alleviating poverty.


Core and Periphery: In most countries or regions core and peripheral regions develop. Although in the model below, Friedmann suggests peripheral areas should become more interconnected with the core areas, in many areas the peripheral areas are less wealthy. Core areas become wealthier because it is where there is the greatest investment in transport, communications, services, etc. Because these areas get the most investment they see an increase in private investment and inward migration perpetuating the regions wealth in a positive cycle of investment.

Disparities in China By looking at the map to the right showing GDP per capita of China's provinces, it is fairly clear that the east of China is a lot wealthier than the centre and the west of China. There are a number of human and physical factors that have led to these disparities. Physical Factors: Large areas of the north of China are covered in the Gobi Desert, because of desertification the desert is actually growing south further into China. Deserts are arid places incapable of supporting large scale agriculture and therefore populations. The south west of of China is largely covered by the Tibetan Plateau (The Himalayas) making agriculture, transportation, construction and communication all hard. On the other hand the south east has an extensive coastline make transport and communications much easier. The land in the east is also much flatter, has a good water supply (Yangtse and Yellow River) and is more fertile making farming, transport and construction all easier. Human Factors: Most of China's major cities are located in the east (Shanghai, Beijing, Guangzhou, etc.) and it is these that have seen the greatest investment in infrastructure (roads, rail and air) and attracted the most investment and therefore seen the largest growth in jobs and economic development. Ethnically China is predominantly Han and it is the Han that dominate government. Therefore Han people have often been favoured and minority groups like the Tibetans in the south west and the Uighers in the north west have been marginalised.