Fairtrade – Scheme through which producers in low-income countries (LIC's) are given a better price for what they produce. Often these are farm products like cocoa, coffee and cotton. The better price improves income and reduces exploitation

Fair tray (Fairtrade) of money for the hard work of the farmer. A better price will reduce poverty.

The Fairtrade symbol can only be placed on products when the international team who regulate this symbol has formed an agreement with the farmers, who have to agree to being checked regularly for compliance, which includes:

• No discrimination against workers
• Social Rights of workers
• Job security for workers
• Training
• Good health and safety
• Environmentally sound agricultural practices
• No child labour

To remember what the Fairtrade symbol looks like, note that it is similar to the Yin and Yang symbol. The main difference is that instead of being black and white, it is blue and green like sky and earth.

The price of bananas in UK supermarkets dropped from around 18p per banana a decade ago to just 11p per banana in 2020. Families growing bananas for a living are finding this unsustainable.

As a comparison, in 2020:

1kg of Fairtrade bananas        = £1.25

1kg of Bananas normal price = £1.09

Customers pay more for the Fairtrade product, but they are making a difference in poorer countries.

Globalisation – The process which has created a more connected/linked world, with increases in the movement of goods (trade) and people (migration and tourism) worldwide

The globe has eyes stationed (globalisation) all around it. It allows everyone to be linked up.

Globalisation has been happening for hundreds of years, but the pace has really quickened over the past half-century.

The results include greatly increased international trade, the emergence of many companies that operate in more than one country, greater dependence on the global economy, and freer movement of capital, goods and services.

Globalisation is claimed to be creating more wealth in developing countries. However, the gap between the world's poorest and richest countries continues to widen.

Reasons for globalization include better transport systems, availability of cheaper labour in developing countries, vast improvements in communications systems and the removal of many of the barriers to free trade.

Gross National Income (GNI) – A reflection of the size and health of a country's economy

Gross Domestic Product (GDP), Gross National Product (GNP) and Gross National Income (GNI) have one thing in common that you need to remember: they all reflect the size and health of a country's economy.

An increase in any of these, when adjusted for inflation, is a sign that the economy is doing better than the previous year. If you see a capital G at the start of a three letter acronym, i.e., GDP, GNP or GNI, remember that the G stands for "Gross" and is a reflection of how a nation is doing:

"Gee my grocery (gross) store is doing well financially this year".

Here are some further details about GDP, GNP and GNI:

GDP

GDP stands for Gross Domestic Product of a nation. There are two ways to calculate this: either calculation by spending (expenditure approach) or calculation by income approach. Either should give you the same answer.

GNP

GNP stands for Gross National Product of a nation. 
GNP = GDP + net income from abroad (includes dividends, interest and profit).
GNP = GDP + Income received from other countries.

GNI

GNI stands for Gross National Income of a nation.
GNI = GDP produced by nationals (citizens of the country in which they were born) whether or not they live in the country.
GNI = GDP + income received from other countries minus income flowing out of the country.

So, if a British-based company such as BP sends profits back to the UK, our GNI is enhanced, while profits flowing out of the country from a company such as Nissan to Japan will count towards Japans GNI and not the UK's.

Calculation by Spending (Expenditure Approach)

GDP = money spent by consumers + money spent by businesses in investments + money spent by government + net exports (export minus imports).

Which is

GDP = total sales of each company and each person in the country + investments made by companies buying shares + what a president or prime minister spends + things we buy from abroad - things other countries buy from us.

GDP = C + I + G + (X-M)
= consumption + investment + government + (exports - imports)

Calculating by Income Approach

GDP = wages labour + any interest + rent earned + any profits + any taxes to pay (indirect business taxes) + capital consumption allowance.

GDP = how much everyone earns from their jobs + money we earn from banks + rent + profits from businesses + taxes to government and local government + depreciation on equipment. 

GDP = W + I + R + P + IBT + CCA
= wages + interest + rent + profits + taxes + depreciation.

Human Development Index (HDI) – A method of measuring development in which GDP per capita, life expectancy and adult literacy are combined to give an overview index figure

Note: Per capita is a Latin term that translates to "by head". So per capita means the average per person.

This human didn't develop their index (human development index) finger. The index finger is used to indicate where to go, to point, but here it's missing.

Human Development Index is a combination of: 

To remember these elements, we need to go back to the hand again and look at the remaining fingers.

To remember that one finger deals with the amount of money a country has: 

Your ring finger is the finger next to the little finger, on which the engagement and wedding rings are worn. Some people spend massive amounts of money on these rings.

The middle finger can help you to remember middle age. Will you reach middle age? What's your life expectancy?

Middle finger - middle age
Life expectancy - will you reach middle age?

The little finger will help you remember education is also one of the criteria used in the Human Development Index.

How many books can your little finger lift in one go?
Books = education.

Summary

The Human Development Index is a combination of:

Ring finger = diamonds = money (standard of living)

Middle finger = will I reach middle age? = life expectancy

Little finger = books = average education level

Is GDP a true reflection of a nation's economic and social wellbeing?
The Human Development Index was developed because there is a very uneven distribution of wealth in some countries such as Qatar and The United Arab Emirates. A nation's wellbeing is not reflected in the country's GDP figures alone.

If the people in a country have excellent healthcare with few baby deaths and long life plus excellent and long education, this, people believe, is a better reflection of a nation's wellbeing.

The Human Development Index runs from 0 to 1, with 0 being the worst and 1 being the best.

Examples

The USA had an HDI in 2011 of 0.91
Niger in Africa had an HDI in 2011 of 0.295

Even if a nation has a high figure, there is no reflection of how happy a nation is or if it has excellent human rights.
In a vast country like China, the HDI in regions within the country can vary enormously. 

Industrial Structure – The relative proportion of the workforce employed in different sectors of the economy

The different sectors are primary, secondary, tertiary and quaternary economies (each is described later in this section.)

An industrial structure was built and it had four platforms built on it: the primary, secondary, tertiary and quaternary economies.

Basically, industry is divided into four sectors. The primary sector is concerned with the sourcing and production of raw materials; the secondary sector uses the raw materials to make things; the tertiary sector is all about providing services like healthcare, selling, hospitality and leisure; and the quaternary sector covers knowledge, for example education, training, research and IT.

It is important to have the right proportions of people able to work in each of these sectors, and this is called having an industrial structure.

Measures to attract people into a particular sector are often taken by governments who might find, for instance, that there is a shortage of healthcare staff or teachers.

Getting the right balance between sectors is important. For instance, a country with huge manufacturing capacity that cannot obtain sufficient raw materials is likely to have major economic problems, including high unemployment in the manufacturing sector.

Infant mortality rate – The average number of deaths of infants under one year of age per 1,000 live births per year

A one-year-old (one year of age) lifting a one-ton or 1,000kg weight (per 1,000 babies) – this should remind you that the infant mortality rate is the number of babies under one year old who die per 1,000 live births per year.

The infant mortality rate is one of the vital markers of the overall health of a country's population.

Generally speaking, the poorer a country, the higher its infant mortality rate is likely to be.

For instance, in 2019 the rate in Angola, Africa, was 50.2 deaths per 1,000 live births; in Japan in the same year, the rate was just 1.8 in 1,000.

In Victorian England, the infant mortality rate averaged around 150 per 1,000 live births, whereas in 2020, the rate for the UK was about 3.6 deaths per 1,000 live births, illustrating the improvements that have been made over time.

However, both the UK and U.S. rates are higher than in many other developed countries. The U.S. rate was about 5.7 in 2020.

Information Technology (IT) – Computer, internet mobile phone and satellite systems that speed up communication and the flow of information

Information used to arrive slowly but technical knowledge (information technology) has now allowed us to speed up communications.

IT services include:

• The provision and setting up of hardware (the machines and devices) and software (the programs, or sets of instructions, that run on the hardware);
• The configuring of networks (an organisation's network infrastructure typically includes its internet connectivity and internal networking between computers and other devices, such as printers);
• Mobile device management (laptops, tablets, payment terminals and mobile phones);
• Cloud computing (storage and access of information on remote computers, which guards against data loss);
• Cyber security (hardware and software that guards against attacks on systems by hackers who might steal or destroy data, or plant computer viruses.)

Intermediate Technology – Basic tools, machines and engineering systems that people in poorer countries can afford to buy or construct from local resources

Wind turns sails, which spin the bicycle wheel supplying power to a battery operated pump drawing water from the river to irrigate crops.

We are into immediately finding techniques and knowledge (intermediate technology) we can use to construct and solve our practical problems.

This is intermediate technology that can help: Instead of carrying smaller amounts of water from a well two miles away, much larger amounts of water can be moved using a plastic barrel than can be rolled along.

Intermediate technology is the use of equipment and techniques that are suitable for their country of use.

Some poorer countries lack the skills needed to maintain complex equipment. With this in mind, small-scale, basic solutions are often more appropriate.

Much of the intermediate technology supplied to developing nations reflects the idea behind the old proverb: "Give a man a fish and you feed him for a day, teach him how to fish and you feed him for life."

International Aid – Money, goods and services given by the government of one country to another to help the quality of life and economy

Our country sent into their nation a team to stick a Band-Aid on (international aid). That was a great service and they also left some money behind.

International aid is the transfer of capital, goods, or services from a country or organisation for the benefit of the recipient country or its population. International aid can be economic, military, or emergency-humanitarian – for instance, aid given following a natural disaster such as an earthquake.

Official development assistance (ODA) is the most common type of foreign aid: this is assistance given to promote development and combat poverty.

The primary source of ODA is grants from one country to another, though some aid is in the form of loans, and sometimes the aid is channelled through international organisations and non-governmental organisations (NGOs).

Life Expectancy – The average number of years a person might be expected to live

The judge sentenced her to life but there was an expectancy (life expectancy) that she would be out in a number of years.

Average life expectancy for the entire world population in 2020 was 72.63 years, an increase of 0.24% on 2019.

However, like most averages, this hides some big variations.

Japan leads the field in longevity: in 2019, it had a life expectancy of 81.5 years for men and 87.7 for women.

That is in sharp contrast to the Central African Republic, which in the same year had a life expectancy for men of 51.5 years, and for women, 55.5.

In the USA, life expectancy in 2019 was 76.6 years for men and 81.6 for women, while in the UK it was 79.6 (men) and 83 (women).

Life expectancy has improved in line with improvements in healthcare, housing, incomes, and a range of other socio-economic factors.

To see how far some countries have come, consider the fact that in 1920, life expectancy in the USA was 53.6 for men and 54.6 for women, less than today's expectations for the some of the world's worst-performing nations.

Major factors that affect life expectancy include:

• Gender (women on average live longer than men)
• Genetics (which play a role in nine of the top ten causes of death)
• Prenatal and childhood conditions
• Education
• Socio-economic status
• Marital status (those who are married live longer than those who have never married)
• Ethnicity/migrant status
• Lifestyle (including diet, drinking and drug-taking habits)
• Medical technology (including transplants, vaccines and antibiotics)

Literacy Rate – The percentage of people who have basic reading and writing skills (not maths)

She could literally rate (literacy rate) her whole class for basic reading and writing skills after giving them a simple test.

Global literacy levels have risen dramatically in the last couple of centuries. In 1820, only 12% of the people in the world could read and write. Today, the figure has almost reversed: in 2016, only 14% of the world population remained illiterate.

However, despite improvements, big challenges remain. The poorest countries in the world still have large parts of the population that are illiterate.

In Niger, for example, the overall literacy rate is only 19%.

In developed countries, the literacy rate averages 99.2%.

You might be surprised to learn that one of the countries with the highest literacy rate (100%, as confirmed by a census carried out by the United Nations Educational, Scientific and Cultural Organisation) is North Korea. Others scoring 100% are Andorra, Greenland and Uzbekistan.

Microfinance Loan – Very small loans which are given to people in low income countries (LICs) to help them start a small business

She bought her micro mini car on finance, with a small loan (microfinance loan), which she soon paid back even though she was on a low income.

The idea behind microfinance loans is that low-income people can lift themselves out of poverty if given access to money to start their own businesses.

The interest rates are either very low or, in the case of donations from charities, non-existent – that is, only the amount of the loan has to be repaid.

As an example, a bank in Nigeria lends money to people so that they can buy sewing machines and get training to become tailors who sell clothing to make a living.

North-south divide – Economic and cultural differences between southern England and northern England. There are clear differences in people's health, house prices, earnings and political influence

Where are the North and South divided (North-South divide) exactly: does anyone really know?

NOTE: There is also a global north-south divide, between the generally richer countries of the northern hemisphere – e.g. USA, UK, Japan, France, Germany – and the poorer countries of the south, such as sub-Saharan Africa and Latin America.

It has been recognised for many years that there is a north/south divide in the UK. There have been attempts to attract investment into the north, but many businesses choose to set up in the more affluent south where many people earn higher wages.

This helps to maintain a wealth divide, and many living in the north of the country experience significantly different social and economic conditions from those living in the south.

There are also accusations that there is greater public financing of facilities in the south, particularly in London where, for instance, investment in public transport is far greater than in the north.

At a global level, it is similarly acknowledged that, generally speaking, northern hemisphere countries are more prosperous than those in the southern hemisphere. Despite some obvious exceptions such as Australia and New Zealand, southern hemisphere countries are still developing. Their ability to exploit resources, improve their education and training systems, and the way they are governed are all factors that determine their prosperity. 

Many southern hemisphere countries were previously colonised by more advanced northern hemisphere countries, such as Great Britain, France and The Netherlands. The indigenous people were controlled and discriminated against as the colonisers profited from their natural resources.

In the post-colonial period, some nations have struggled to succeed in terms of production of goods, global trading and providing the infrastructure that creates a commercially successful nation.

Post-industrial Economy – The economy of many economically developed countries, where most employment is now in service industries (not factories)

Post industry (post-industrial) in a parcel and please return as we only need services. That's how our economy is now.

NOTE: Service industry sectors include banking, education, tourism, accountancy, public relations, information technology (IT), hospitality (hotels and restaurants), entertainment, distribution, media, healthcare and sports. 

Post-industrial simply means "after industry", or the period following a significant reduction in a developed country's manufacturing activity.

These economies typically have a declining manufacturing sector, resulting in deindustrialisation, and a large and growing service sector.

There is also an increase in the use of information technology, leading to an "information age". 

The new raw materials of such an economy are information, knowledge, and creativity.

Manufacturing activity usually moves to less developed nations that make what is needed at much lower costs.

Post-industrial nations include the United Kingdom (first industrialised nation), most of Western Europe and the United States.

Trade – The buying and selling of goods and services between countries

My tray (trade) has these goods and services you can buy.

Goods that come into one country from another are called imports. Goods that a country sends out to another one are called exports.

International trading between nations allows consumers to choose goods and services not available in their own countries, or to buy alternative, foreign-produced items instead of home-made or home-grown ones.

Practically every kind of product can be found on the international market, including food, clothes, spare parts, oil, jewellery, wine and even water. Services are also traded. These include tourism, banking and business consulting.

A product that is sold to the global market is an export, and a product that is bought from the global market is an import. Imports and exports are accounted for in a country's current account in its balance of payments.

A trade deficit is when a country spends more on imports than it earns from its exports. A trade surplus is when a country earns more from exports than it spends on imports.

Transnational corporation – A company that has operations (factories, offices, research and development, shops) in more than one country

Many transnational corporations are large and have well-known brands.

Transacts in many nations, sometimes all of them (Transnational), like McDonald's in all the different countries above.

Globalisation (the "internationalisation" of markets for goods and services) has resulted in many businesses setting up or buying operations in other countries.

Companies that operate in several countries are called transnational corporations (TNCs) or, sometimes, multinational corporations (MNCs).

The US fast-food chain McDonald's is a large TNC – it has around 34,000 restaurants in 119 countries. Other examples include the technology giant, Apple, Coca Cola, and Unilever, one of the world's biggest consumer goods companies.

The majority of TNCs come from economically developed countries such as the U.S. and UK. Many multinational corporations invest in other developed countries.

However, TNCs also invest in less economically developed countries. The UK DIY store, B&Q, has stores in China, for example.

Science and Business Parks – Clusters of businesses with a scientific and technological focus

Business parks are purpose built areas of offices and warehouses, often at the edge of a city and on a main road. Science parks are often located near university sites and where high-tech industries are established. Scientific research and commercial development may be carried out in co-operation with the university. 

Science and business took over the park (science and business park). The park was on the edge of town, just off the main road. Some great ideas grew up between the trees and flower beds, and they shared research results with the nearby university.

Service Industries (tertiary Industries) – The economic activities that are not producing end products. They include selling, hospitality and leisure

She took her car for a service and found, to her surprise, that inside the garage there were lots of other industries (service industries): a financial services desk, a drinks bar, a beauty salon, and a live band on stage.

Note: Examples of service industries include commercial (shops), professional (solicitors, dentists, engineering, business consultancy), social (schools and hospitals), entertainment (restaurants and cinemas) and personal (hairdressers and fitness trainers),

Another area that is very important is financial services, which includes banking, insurance, and investment management.

A services-dominated economy is the hallmark of a developed country.

In less-developed countries, working people are employed in primary activities such as agriculture and mining, while much of manufacturing has shifted to developing countries, such as China and India.

Primary Economy – The part of the economy concerned with the extraction of raw materials. It includes fishing, farming and mining

In less developed economies, the primary sector will comprise the biggest part of the economy.

In the primary school (which is the first main school kids go to) classroom, the kids had been left alone too long and they had dug down into the floor, finding raw materials.

The primary economy includes any industry involved in the extraction and production of raw materials, including farming, logging, fishing, and mining.

This sector generally makes up a larger portion of the economy in developing countries than in developed countries, where service industries are dominant.

As an example, in 2018, agriculture, forestry, and fishing accounted for more than 15% of gross domestic product (GDP) in Sub-Saharan Africa but less than 1% of GDP in North America.

In poorer countries, much of the work performed in the primary economy is done by hand or basic machinery, while in developed countries the primary sector has become more technologically advanced, requiring far fewer workers.

Secondary Economy – Concerned with manufacturing, encompassing industries which produce a finished, usable product or are involved in construction. It includes steel or motor vehicle production

In the secondary school (which is the second main school kids go to) the kids had manufactured gin in the classroom (the secondary economy is concerned with manufacturing).

The secondary economy takes the output of the primary economy (i.e., raw materials) to make finished products that can be used by other businesses, or which are sold to domestic consumers (ordinary people).

Manufacturing industries consume huge amounts of energy. They produce waste materials and, in many cases, pollution. Examples include steel, cement, car, pharmaceutical and food manufacturing.

Manufacturing processes are responsible for a large percentage of the CO₂ that goes into the atmosphere, and therefore for a large proportion of global warming.