Key learning points

1. Various strategies exist to reduce the development gap.
2. The development of manufacturing industries can help to reduce the gap.
3. The development of services industries, including tourism, can contribute to economic development.
4. Foreign direct investment in infrastructure can promote economic growth.
5. Microfinance loans allow people to set up small businesses and become self-sufficient.

Keywords

• Development gap - the widening difference in standards of living and wellbeing between the world’s richest and poorest countries

• Manufacturing industries - the secondary economic sector, involving making goods from raw materials or other manufactured products (for example motor vehicles)

• Service industries - the tertiary economic sector, which includes tourism, banking, education and health

• Microfinance loans - the provision of small-scale loans given to people in LICs to help them start a small business

Common misconception