Paper 3 question on development (HL only)

Maximum mark for this question 30

Haiti was hit by a magnitude 7.2 earthquake on August 15, 2021. The earthquake occurred at
the Tiburon Peninsula, leaving at least 1,297 people dead and more than 5,700 injured,
according to the country's civil protection agency. The quake also destroyed 13,694 homes,
pushing hospitals to the brink and blocking roads that would carry vital supplies.

Prior to the earthquake, Haiti was already the poorest nation in the Americas and one of the
poorest in the world, with a GDP per capita of $ 1,177 and significant deficiencies in basic
services. According to United Nations Development Program, 24.7 percent of Haitians live
in absolute poverty, which is less than $1.25 per day. Even more, approximately 59 percent
of Haitians live on less than $2 a day.

Haiti is also ranked at 0.510 in 2020, which put the country in the low human development
category, positioning it at 158 out of 189 countries and territories - a rank shared with Sudan.

More positively attempts to redistribute income equality in the nation have been successful,
with a Gini coefficient of 41.1 in 2017, an improvement from 60.8 as of 2010. In the 4 years
prior to the earthquake the country also demonstrated considerable growth:

Year GDP Per Capita (US $) Annual growth rate (%) HDI

2020 1,177 -7.52 0.51

2019 1,272 11.35 0.51
2018 1,435 10.90 0.50
2017 1,294 2.23 0.50

Questions:

1. (a) Define the following terms from the text:

i. Absolute poverty (line 5) [2 marks]
ii. Human Development Index (HDI) (line 7) [2 marks]

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(b) Calculate the overall growth rate in GDP per capita and HDI in this period? [2 marks]

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© Mark Johnson,
InThinking www.thinkib.net/Economics 1
 (c) Explain using a PPC / PPF diagram the
impact of the earthquake which left ‘1,297
people dead, destroyed 13,694 homes, as well
as pushing hospitals to the brink and
blocking roads carrying vital supplies’, on
the economy of Haiti. [4 marks]

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(d) (i) Using a Lorenz curve diagram, explain the meaning of “a Gini coefficient of 0.41”
(paragraph 14). [4 marks]

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(ii) Illustrate on your diagram the change in Gini-coefficient between 2010 and 2017? [2
marks]

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InThinking www.thinkib.net/Economics 2
(e) Explain two reasons why the country experienced negligible rises in development despite
significant rises in per capita incomes in the pre-earthquake period? [4 marks]

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(f) Using the data provided and your knowledge of economics, recommend a policy which
the Haitian government might use to achieve economic growth and development. [10 marks]
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© Mark Johnson,
InThinking www.thinkib.net/Economics 3
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[End of question]

© Mark Johnson,
InThinking www.thinkib.net/Economics 4