Why is Africa so under-developed - 1653 Words

Africa is the world’s second largest continent and the second most populated continent behind Asia. Africa is the poorest and the most undeveloped continent in the world, and is commonly referred to as a ‘Third World Continent’. The term ‘Third World’ came around during the Cold War to classify countries/continents that remained self-governing with a capitalist or communist government. This definition allows us to categorise the nations of the world into three groups based on social, political, and economic distribution. These groups are; the First World, the Second world and the Third world. Political reasons for a lack of development- In the late 19th century, European imperial powers (such as the British Empire) ended up†¦show more content†¦Therefore, even more cash crops were grown to help pay for imports. In the 1980s, international interest rates doubled causing a global recession. Demand for overseas products fell in rich countries, so the value of African cash crops fell. Reduced incomes meant more cash crops were needed to match the previous level of income. These factors over time have lead to a lack of economic progress in Africa which has ultimately stunted development. In the 1970s when OPEC raised the price of petroleum, its member’s earnings were massively increased. The OPEC countries banked their earnings in Western banks. These banks then lent money to developing countries such as Africa for infrastructure projects. When the interest rates doubled (1980s) it increased the repayments on the loans that were made in the 1970s. LEDC’s like African countries could not meet their payments and found themselves in debt. Zambia is an African country that can be used as an example of a declining industry that affects the economy massively. Zambia is rich in copper deposits and it once shaped the economy. It paid for schools, health care and prosperity. The copper industry provided 90% of Zambia’s foreign earnings and 25% of its GDP (gross domestic product) for 27 years. However, in the 1990s, the value of copper fell when it was replaced for fibre-optic cables in modern telecommunications technology.Show MoreRelatedBussiness Qa Essay1476 Words   |  6 Pagesthe opportunity? 2. Why do companies tend to thrive in global markets when their country of origin enjoys a comparative advantage in their industry? 3. Explain how to calculate the balance of trade. How does the growing United States trade deficit impact the economy? Why? 4. Explain the meaning of â€Å"strong† currency and â€Å"weak† currency. What are the advantages and disadvantages of each? 5. Why is outsourcing such an attractive wayRead MoreGuns, Germs And Steel : Episode 3 Essay883 Words   |  4 Pagesthe episode is how Europe dominated Africa, how they fought through diseases and land wars with local tribes. 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