Edexcel AS Geography (8GE01)
Unit 1: Topic 2 – Going Global
 Enquiry
question: What are the main
groupings of nations and what differences in
levels of power and wealth exist?
 According to the spec, students need to
learn:

The disparities in global wealth and poverty,
through broad economic and political groupings
of countries (e.g. NICs, OPEC, LEDCs, LDCs, OECD
and trade blocs like NAFTA).
Traditionally the world was viewed as developed core (north) or developing periphery
(south) however globalisation has made this more complex as some countries are poor but
have rich elites and make it hard to generalise. Countries are now classified as High,
Middle or Low, using these indicators and then grouped politically, economically or by
companies (TNC’S):
Economic Development Indicators
Gross National Product
(all trade)
The value of all the goods and services earned by a company
including companies working abroad (TNCs).
Gross Domestic
Product (internal trade)
The value of all the goods and services earned by a country
excluding foreign earnings.
Per Capita
Statistics providing an average per person.
Purchasing Power
Parity
Relates average earnings to prices and what they will actually
buy.
Human Development Indicators
Physical Quality Of
Life Index
Made up of life expectancy, literacy rates and infant mortality.
Human Development
Index
Human Suffering
Index
Made up of life expectancy, literacy rates, infant mortality and
school enrolment.
Made up of daily calorie intake, access to clean water, inflation
rate, access to communications, political freedom and civil rights.
Development Indicators
 1. GNP
 2. GDP
 3. Balance of trade (Imports-Exports)
 4. Natural increase
 5. Life expectancy
 6. Number of doctors per capita
 7. Proportion of people living in urban areas
 8. Dependency ratio
 9. HDI Ratio
 Countries
can be put into broad economic
and political groups because wealth and
power aren’t shared out equally around the
world
 These groups change over time as the wealth
and power of countries change


For example, most countries used to be classed
as either More or Less Economically Developed
It’s now thought that this system is too simplistic
– there are too many stages of economic
development to put all countries into only 2
categories.
The Brandt Line (or also known as the North –
South Divide)
In the ‘global north’
living conditions are high
due to high wealth
In the ‘global south’
living conditions are low
due to low amounts of
wealth
G8 + 5 – Aim to create deeper international
co-operation and an understanding of climate
change and international trade.
OECD (Organisation for Economic Cooperation and Development)
It is a global ‘think tank’ for 30 of the world’s
wealthiest nations and ensures wealth is
distributed evenly across the nations.
G20 - This actually has 23 members
from the developing world, and was formed
in 2004 with a focus on agricultural trade.
LDCs (Least Developed Countries) 50poorest countries classified by the UN
Ex-soviet states – After the break up
of the soviet Union in ’89, there were 15
ex soviet states remaining, which scored
poorly in HDI and GDP
 NICs (Newly
Industrialised Countries) Countries undergoing
industrialisation where
average earning and exports
have increased dramatically
since the 70’s. China.
OPEC (Organisation for Petroleum
Exporting Countries) - Established to
regulate the global oil market. Stabilise
prices and ensure a fair return for the 11
member states who between them supply
40% of the world’s oil.
 BRICS (Brazil, Russia, India , China
and now South Africa) - They all have
newly advanced economic development.
 Least
Developed Countries (LDCs) are a group
of around 50 countries that are defined by
very low incomes, poor health, low
education, economic instability and their
heavy debt to richer countries, e.g.
Mozambique, Sudan, Ethiopia, Afghanistan
 Their economies are usually based on
agriculture, so crop failures can lead to
economic disaster
 Countries are moved out of the LDC group
when conditions improve, e.g. Botswana
 The
majority of LDCs are located in the
African continent, with a few located in Asia
as well as Oceania, and only one in the
Americas (Haiti)
 Less
Economically Developed Countries have
started to develop their economies and this
can be seen in their increasing GDP, calorie
intake per day, birth rates and death rates
Eg Egypt, Namibia
 Newly
Industrialised Countries (NICs) aren’t
yet classified as developed countries (like
the UK), but aren’t thought of as LDCs (like
Bangladesh) either.
 Their economies are usually growing very
fast, and there has often been a recent move
from a mostly agricultural economy to one
involving manufacturing and exporting
 The term was originally used for the Asian
‘Tiger’ economies of Singapore, Hong Kong,
South Korea and Taiwan
 However,
some people now argue they’re
fully developed and so shouldn’t be referred
to as NICs any more.
 There’s no official list of NICs, though China
brazil and India are currently thought of as
NICs
 The
table above presents the list of countries
that are consistently considered as NICs
 Green coloured cells indicate higher value or
best performance in index, while yellow
coloured cells indicate the opposite
 The
four ‘BRIC’ countries are Brazil, Russia,
India and China. They are in the same
group as they all have newly advanced
economic development. They are middle
income countries, which are becoming high
income countries.
 Now they the BRICS as South Africa has just
been added very recently!
 Apparently they are the economies that we
expect to lead in the future…..wait and
see!!!
 Russia
and some of the surrounding countries
in central Asia and eastern Europe used to
make up one large state called the Soviet
Union
 A lot of independent countries have been
created since the Soviet Union collapsed in
1991 – these are mostly now classed as
middle-income countries (E.g. Estonia)
 Middle-income countries have growing
economies, but the growth isn’t as rapid as
the NICs and their development hasn’t
reached the same level, e.g. Ukraine
 Recent
growth in some ex-Soviet states is
due to the exploitation of natural resources

E.g. Oil and gas in Kazakhstan
 The
privatisation of industries (state
controlled in Soviet times to privately
controlled now) has led to economic
recovery and growth in many ex-Soviet states

E.g. Belarus
1. Armenia; 2. Azerbaijan; 3. Belarus; 4. Estonia;
5. Georgia; 6. Kazakhstan; 7. Kyrgyzstan; 8. Latvia;
9. Lithuania; 10. Moldova; 11. Russia; 12. Tajikistan;
13. Turkmenistan; 14. Ukraine; 15. Uzbekistan
 More
Economically Developed Countries have
highly developed economies. They have high
calorie intakes and GDP. Their birth and
death rates are low, indeed their death rates
may even exceed the birth rates. Eg UK, Italy
 The
Organisation of Petroleum Exporting
Countries (OPEC) is a group of 12 major oilproducing countries
 African OPECs: Algeria, Angola, Libya Nigeria
 South American OPECs: Ecuador, Venezuela
 Middle East OPECs: Iran, Iraq, Kuwait, Qatar,
Saudi Arabia, United Arab Emirates (UAE)
 Half of OPECs are from the Middle East due
to the vast oil reserves present there
 Indonesia was a recent member but left
OPEC in 2007
 OPEC
countries control around 2/3 of global
oil reserves
 Because they’re a large group in control of a
large amount of oil, they can make sure they
get a fair price from oil-consuming countries
(e.g. The UK)
 Some members have left since OPEC was
founded because they wanted to produce
more oil than the agreed OPEC quotas
allowed (e.g. Gabon)
 Other countries have been invited to join
(e.g. Bolivia and Sudan)
 The
Organisation for Economic Cooperation
and Development (OECD) is a group of 34 of
the richest and most powerful countries
 The top eight are called the G8 – one of the
world’s most powerful and wealthy groups –
it’s made up of Canada, France, Germany,
Italy, Japan, Russia, USA and the UK
 They meet to discuss and provide possible
solutions to economic, environmental and
social issues
 Members of the OECD are always changing
too, e.g. Potential new members include
Brazil, China, India and more recently South
Africa (BRICS)
 53
countries that all used to be colonies of
the UK, except the UK itself and
Mozambique.
 They are all very different countries but try
to uphold the same standards
 There
are six major trading blocs around
the world
 APEC
– Asian Pacific Economic Cooperation
 ASEAN – Association of South East Asian
Nations
 Trade
Blocs are groups of countries that
make agreements to reduce barriers to trade

E.g. By removing tariffs (taxes on imported
goods)
 Blocs
increase trade between members, and
members can work together as a larger
organisation to trade with non-members
 Benefits of membership of a trade bloc are
linked to two important concepts:
 1)
Economies of scale – the advantages
companies gain because of increased sales
 There’s a larger market for all companies
within the trade bloc because it’s easier to
trade with all other member countries
 This increases sales. More sales means more
products need to be made, so companies can
buy the raw materials for their products in
greater numbers, saving money
 Buying raw materials in bulk means each
product costs less to make, so companies
make more profit
2) Comparative advantage – countries can
concentrate on developing specific industries
 Being in a trade bloc means it’s easier to trade
for all the different goods and services a country
needs, because trade is less restricted
 So countries can specialise in producing the
things they’re good at making and trade for the
things they’re not good at making
 Production will increase in each member country
because they’re concentrating on what they do
best, so production will increase in the trade
block overall

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
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Free trade zone
MOST developed trade bloc in the world
Common currency
Migration increase
Judicial System
Parliament
Humans Rights Act
Health and Safety Legislation
Cultural links and spread
The North American Free Trade Agreement is an
example of a trade bloc
 It’s called NAFTA because it’s an agreement
between the countries of North America – USA,
Canada and Mexico
 It’s made trade between the members easier by
removing things like import taxes on some goods
 Trade between all 3 countries has increased but
there are other impacts, e.g. Job losses in the
USA because the manufacture of some goods has
been moved to Mexico, where labour is cheaper

The impacts of NAFTA on its members:
On the USA
All 3 countries would be better off
with free trade as they would specialise
in producing what they are best at
Free trade with Mexico would result
in wage and benefit reductions if US
firms are to remain competitive against
cheap Mexican labour
Environmental groups saw more
severe environmental damage in
Mexico as the environmental laws are
lax and often not enforced
Multinationals
have
moved
operations to Mexico have gained
higher profits
Growth of the visible trade deficit
worth 16% of US trade
Mexican trucks are allowed full
access to American highways but they
don’t limit the time drivers are allowed
to stay behind the wheel
On Canada
Visible trade with US
increased 80% in the first
5 years of NAFTA
Visible trade with
Mexico has doubled to
reach $9 billion in 1998
US investment in
Canada reached $147
billion in 1998, up 63%
from 1993
More than 1 million
new jobs created since its
start
In 1998, 68% of FDI in
Canada came from US
and Mexico
Concerns from
environmental groups
regarding damage
On Mexico
Forcing Mexican companies
to adopt higher foreign
standards and business practices
Makes it impossible for
Mexico to go back to poor
political choices from the past
Mexico has reduced or zero
tariffs with 60% of the world
 Many believe Mexico has
become trade dependent – 88%
of export go to the US
Mexican government did little
to prepare the country for the
significant changes e.g. before
NAFTA farmers were protected
by import tariffs and
government-price guarantees –
now unable to compete with
large scale farmers in USA and
Canada
 Read
the Geofile photocopied sheet on
NAFTA
 These
groupings of countries highlight the
inequalities in wealth and power around the
world
 Most of the wealth and power is in the hands
of a few countries, e.g. The G8 have over
60% of the gross world product (the total
income of the world), and control most of
the military power, even though they’re only
8 countries
 These groupings can also show how wealth
and power can change
For example, Russia didn’t officially join the G7
(to form the G8) until 1997 because of the power
issues of the cold war (a period of political
struggle between the USA and the Soviet Union)
and economic problems in Russia after the
collapse of the Soviet Union
 Because wealthy countries often form groups
together, they become more closely integrated
 This mean’s they’re more likely to get even
wealthier and develop solutions to their own
economic, environmental and social problems at
a faster rate
 This can lead to a widening of the gap between
poorer and wealthier countries
