The development gap is the difference in levels of development between the richest and poorest countries in the world. Some believe that the development gap between high-income countries (HICs) and low-income countries (LICs) is increasing.
There are a range of different strategies that can be used to reduce the development gap. Often, these approaches support local development projects, generate employment opportunities and increase incomes. In return, these create more wealth and help reduce the development gap.
How can investment reduce the development gap?
Countries, organisations (e.g. the World Bank) and transnational corporations (TNCs) invest in low-income countries (LICs) to increase profits. Investments lead to improvements in:
infrastructure (e.g. road networks and airports)
services (water, sanitation and electricity)
dams and reservoirs (for hydro-electric power)
Chinese companies have invested in the Tazara railway linking Zambia and Tanzania
How can industrial development and tourism reduce the development gap?
Tourism brings in valuable foreign currency and brings a range of improvements including to the infrastructure, healthcare and education. Tourism brings employment opportunities in the service sector and raises incomes.
Industrial development brings employment opportunities in construction, manufacturing and service industries. Increased individual wealth leads to improvements in health, education and service provision through the payment of more taxes.
How can aid reduce the development gap?
In this case, aid is usually in the form of financial assistance offered by countries, organisations and TNCs. Long term aid supports development projects such as improving sanitation, water supply and education. Short term aid is often given in response to natural disasters.
How can intermediate technology reduce the development gap?
Intermediate technology is often used to support local development projects. These are projects usually aimed at improving water supplies, health and agriculture. The development gap is reduced through improvements at the local level.
How can fair-trade reduce the development gap?
Fairtrade involves paying farmers a fair price for their products and investing in local communities. Fair-trade also promotes fair wages for farmers and their workforce.
In the 1970s and 1980s, many countries borrowed a significant amount of money for large scale development projects. Some of these countries have fallen into considerable debt repaying loans or high rates of interest. Debt relief involves cancelling money owed, allowing more significant investment in development projects such as road building and health care.
How can micro-finance loans reduce the development gap?
Micro-finance loans offer financial support to community groups or individuals to start a small business. If businesses are successful, they will create jobs and increase people’s income.
Grameen Bank in Mongla in Bangladesh offers micro-loans to poor people.
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