How does dependency on primary sector production hinder economic growth ?
Dependancy on primary commodities for big share of export revenue risky -> if disruption occurs -> current account deficits likely to increase -> difficult to finance current expenditure and necessary imports
Much economic growth cannot be attained through international market -> limited range of products available for export
Price and export revenue fluctioation -> difficult for planning ahead
What is protectionism ?
economic policy aimed at supporting domestic producers qt the expense of foreign producers
How does lack of access to international markets hinder economic growth ?
Protectionism -> limits other countries from exporting their goods -> developing countries limited in earning foreign exchange
How does informal economy hinder economic growth ?
No taxation or administration -> not included in countries gross National income -> no capital for government
How does capital flight hinder economic progress ?
any domestic capital that leaves country -> could have been used internally & restricts growth
depreciation of the currency as supply of domestic currency increases on international money markets in response to increased demand for foreign currency for oversees investment/saving
How does indebtness hinder economic progress ?
Damaging long term wise as debt has to be payed back with interest rates
Opportunity cost -> country isn’t able to utilise money on other aspects of economy
Last changeda year ago