Key Terms

📖 Key Terms

Development gap

The difference in levels of development between the world's richest and poorest countries, measured using indicators such as HDI, life expectancy, and GNI per capita. The gap reflects historical, political, economic, and physical causes and is both large and persistent.

GNI per capita

Gross National Income per person — the total income earned by a country's residents divided by the population. A useful economic baseline but hides inequality within countries. Ethiopia's GNI per capita is approximately $1,000; the UK's is approximately $46,000.

HDI (Human Development Index)

A composite UN measure combining GNI per capita, life expectancy, and education (mean and expected years of schooling) into a score between 0 and 1. More rounded than income alone. Ethiopia: 0.498; UK: 0.929.

Infant mortality rate (IMR)

Deaths per 1,000 live births before age one. Reflects quality of healthcare, nutrition, and sanitation. Ethiopia: ~38. UK: ~4.

LIDC

Low-Income Developing Country — the lowest category of development. Characterised by HDI below approximately 0.550, GNI per capita below ~$1,000, largely agricultural economies, and high dependence on aid and commodity exports. OCR B requires Ethiopia as the LIDC case study.

NEE

Newly Emerging Economy — countries undergoing rapid industrialisation and economic growth, with rising incomes and a growing middle class but persistent inequality. Examples: Nigeria, India, China, Brazil.

DTM (Demographic Transition Model)

A model showing how birth and death rates change as countries develop, moving from high birth/death rates (Stage 1) to low birth/death rates (Stage 5). Countries at different development levels occupy different stages — LIDCs are typically Stage 2–3 with rapid population growth.

Cycle of poverty

The self-reinforcing set of conditions by which poverty makes further development difficult: low incomes → limited education and healthcare → low productivity → low tax revenue → limited public services → next generation faces same barriers.

Tied aid

Aid that requires the recipient to spend the money on goods or services from the donor country, reducing its effectiveness for local development. Estimated to cost recipient countries 15–30% of the aid's potential value.

Fair trade

A trading system guaranteeing producers in LIDCs a minimum price for their goods plus a social premium for community development. Ethiopia is the birthplace of coffee; 12 million Ethiopians depend on coffee farming. Fairtrade minimum price: $1.40 per pound.

FDI (Foreign Direct Investment)

Investment by companies or governments in one country into businesses or infrastructure in another. Chinese FDI in Ethiopia (~$12 billion since 2000) includes the Addis Ababa light rail and Djibouti railway. Creates jobs but may increase debt and return profits to the investing country.

HIPC initiative

Heavily Indebted Poor Countries initiative — IMF/World Bank programme that cancels or reduces debt for qualifying LIDCs in exchange for commitments to invest freed resources in poverty reduction. Ethiopia had $1.9 billion cancelled in 2004.