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Economic Geography Traditional Economy • Economy where traditions, customs, beliefs and needs shape the production of goods and services. • Lack of consumer, popular cultural items • Both monies and barter system is used. Dual Economy • Refers to two types of economies within a country. One is capitalistic for global production while the other is based off of subsistence. Distribution of Oil in Africa Cash Crops---• Non-food crops grown and sold for profit Blood Commodities • When the sale of commodities goes to fund civil war, conflict or political corruption. one commodity countries • Economy focuses on one commodity • Price fluctuations bring instability—mercy of the global market “All the economic eggs are in one basket” Oil: Nigeria, Libya, Egypt, Gabon Cocoa: Ivory Coast, Cameroon Tobacco: Malawi Cashew Nuts: Guinea-Bissau Economic diversification • Economy based on many sectors • More stable, able to survive fluctuations ***solution to the one-commodity economy*** Resource curse Africa has many resources, why isn’t it more developed? • Jobs at the primary level (low wages, low education) • Lack infrastructure to make or sell finished products (less trade) • Foreign ownership (big money elsewhere) • Raw materials exported (big money elsewhere) • Corruption (leaders misuse income) Stabilization Funds • Countries save money when a commodity is priced high to cushion the blow when the commodity price falls. Dutch Disease • When focus is shifted to one sector of an economy causing other sectors to fall behind Cycle of Poverty----Why African countries remain poor Brain Drain—see population LTs • Brain drain is when young skilled/educated people leave their home country in pursuit of a better economic situation. • Typically citizens from developing countries migrate to the developed world. $$$$$$$