Briefly outline what is meant by gross national income (GNI).

Briefly outline what is meant by foreign debt.

Identify which country on the map is most in need of debt relief and briefly justify your choice.

Explain, using examples, two ways in which increased trade may help reduce economic disparities between countries.

The total value of goods/services produced within a country together with the balance of income/remittances and payments from or to other countries. [1]

Money/debt owed by a country to another country/organization/bank. [1]

• Jamaica [1]
• Evidence from the resource (eg over 100%/124%) [1]
• Development of why it is need of debt relief or comment relative to the other countries [1]

Possibilities include:

• It owes over 100 % of its annual GNI [1]. No surplus money available for development projects [1].
• All money generated in nation is needed to service its debt [1]; it needs this debt burden reduced to enable investments in development projects [1].

If the wrong country is named, up to [2] can still be awarded for correct justification of why it is the most in need of debt relief.

Award [1] for a valid, distinct way and [1] for additional explanation and/or detail to explain how increased trade can reduce economic disparities between countries.

There are a number of ways in which increased trade can help reduce disparities between countries such as:

• Increasing incomes in trading nations [1] eg in Vietnam free trade agreement with USA gave workers improved wages and increase in national income [1].
• Increased income stimulates growth in other sectors [1] which increases the national income [1].
• Workers in industries associated with increased trade improve skills [1] which increases opportunities to generate more income and reduces disparities [1].
• Increased trade allows countries to develop a manufacturing base [1] this generates more income than agriculture or other primary activities [1].
• Increased trade leads to international recognition [1] – attracts investment with enhanced reputation which improves economy [1].
• Removal of tariffs/free trade/reduced protectionism increases trade and revenue as there are no barriers to imports and exports [1] – this increases the national income [1].
• China joining the WTO and opening up its economy [1] has allowed it to become “the workshop of the world in the 21st century” and increase its prosperity [1].
• Free Trade Zones in Uruguay attract large amounts of foreign investment [1]. These have become one of the main drivers of the Uruguayan economy [1].
• In Costa Rica increasing use of Fair Trade is supporting farmers growing products such as coffee and bananas to become more income-secure [1] and less vulnerable to poverty [1].
• Within trade blocs countries have free access to each other’s markets [1] this can protect from competition from outside the bloc and maintain the economic viability of a country/industry [1].