Page 26 - CAPE Caribbean Studies Study Guide Sample_Neat

2.9 Factors that promote or hinder

development VII: global factors

Learning outcome War and insurrection in other parts of the world

On completion of this section you Middle Eastern countries like Iraq, Saudi Arabia and Kuwait are major
should be able to: producers of oil. Their production and pricing of oil influences the price of
oil around the world. In the past, when war has broken out in the Middle
■ identify the global factors that East there have been restrictions on oil supply, causing international panic
affect development.
and leading to significant increases in the price of oil. In turn the prices of
products made using oil have also increased.
The Caribbean has a high dependence on oil. If oil prices go up, the overhead
cost of production will increase since machines need oil and fuel to run.
Firms’ expenses will rise, causing a reduction in profits, and the price of goods
will increase.
Terrorism

Terrorist attacks such as those of September 11, 2001 on the World
Trade Center, the Madrid train bombings, the 7/7 bombings in London
and multiple suicide bombings in the Middle East have had far-reaching
impacts. These attacks have caused the loss of thousands of lives and
property damage that runs into millions of dollars. As a result, ports of
entry and exit are heavily monitored to ensure that national security is not
breached.
Figure 2.9.1 Consider the impact of
terrorist attacks in other countries on the Major acts of terrorism can cause disruptions to tourism, potentially affecting
Caribbean the economy of regions like the Caribbean. Productivity can also be affected
and slows down. If distribution chains are affected in the Caribbean, there
Did you know? may be shortages of foreign raw materials, resulting in higher costs to
businesses.
The concept of terrorism has its
origins in the French Revolution Natural disasters affecting production
of 1789. During a period known as
‘the Reign of Terror’, thousands of We have seen how a natural disaster is an event of nature that takes human
people, including aristocrats, were lives or destroys property. They can take the form of hurricanes, earthquakes,
condemned to death by the use volcanic eruptions or tsunamis.
of the guillotine, a device used to Production levels may reduce after a natural disaster. Business premises may
decapitate a person.
be damaged so that they cannot operate at full capacity.
Due to its location, every year the Caribbean is impacted by hurricanes
which ravage parts of the region. In September 2017, hurricanes Irma and
Maria devastated much of Dominica, Antigua, Barbuda, Anguilla and the
BVI. Decades of development and investment was decimated in a few hours,
making several of the islands uninhabitable. Tourism and agriculture, which
contribute hugely to the economies of those islands, were crippled and all
social services, particularly education, were disrupted.
If unemployment increases following a natural disaster, the economy may
contract. There will be pressure on governmental organisations to attempt to
Figure 2.9.2 The aftermath of the keep the economy stable.
2010 earthquake in Haiti

72

852345_Module 2A.indd 72 04/06/2018 11:08