Page 16 - CAPE Caribbean Studies Study Guide Sample_Neat

2.4 Factors that promote or hinder

development II: distribution of

wealth/resources

Learning outcome Every Caribbean territory possesses its own resources, which may either be
physical or non-physical. Examples of physical resources are minerals, forestry
On completion of this section you and even livestock, while non-physical resources range from human skills to
should be able to: capital in business. The possession of resources contributes to development.

■ identify the ways in which However, in many cases there is inequality in its distribution and this may
distribution of income affects hinder development.
development.
How does the equitable distribution of wealth and
resources contribute to development?
KEY TERM
When resources or wealth are distributed equally throughout a society or an
Traditional economies: based on economy, all sectors receive the same share or all citizens receive a fair share
subsistence production, a barter of national income. From an economic standpoint, if the national income
system and production based on is shared fairly among the various ministries such as health, education,
traditions passed down through national security, agriculture or transport, then more schools can be built
generations, as in the indigenous or investments made in education to make the workforce more skilled and
populations of Guyana and Belize. equipped for working. Equitable distribution would help all hospitals to
Planned economies: production is have the equipment necessary to carry out operations or to expand so that
controlled by the state, based on they could treat more patients. Furthermore, equality in the distribution of
the government’s own priorities, resources would allow females greater access to education and skills training
for example in socialist Cuba. so that they could become more employable.
Free Market economies: means In the end, there must be equity and a commitment on the part of the
of production and resources are government to provide resources to all fairly. For example, in the distribution
privately owned. Production of healthcare services, rich people should not be favoured because of their
of goods and delivery of income, and poor people should not suffer due to their limited funds. When
services are determined by allocating wealth or resources to other sectors of a country there should be
price mechanisms, profits and equity in distribution. For example, a country’s government should allocate
purchase ability, as in the US. the same resources to education as to healthcare services. One sector should
Mixed economy: public and not have to suffer so that another can be improved.
private sector ownership
How does inequality in the distribution of wealth and
and allocation of resources.
Production based on consumer resources hinder development?
need and broader issues like
employment. This type of Inequities in the distribution of wealth can take many forms, ranging from
economy is typical in countries inadequate allocation of national income, to certain groups of people unduly
like Jamaica and Barbados. or unfairly benefitting from the distribution of wealth or resources.
Historically, Caribbean society has been characterised by social stratification
where the elites owned the capital, the middle classes owned some property,
and the lower classes sold its skills and labour for a wage. Even in modern
times, there are groups who continue to hold a monopoly over the resources
and wealth of a country.
If wealth is unevenly distributed then this can hinder development. When
concentrated in the hands of a few it can lead to low levels of investment,
high unemployment and a large unskilled labour force, as there is low
expenditure on education. It can also result in corruption. As a consequence

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