In South Sudan HDI was 0.43 in 2010 and 0.39 in 2022. Evaluate market-orientated strategies that a government in a developing country of your choice might use to increase economic development.

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.

QS9: Interpret, apply and analyse information in written, graphical, tabular and numerical forms.

Knowledge, Application, Analysis (12 marks) - indicative content
- Understanding of HDI
- Understanding of economic development
Strategies include:
- Trade liberalisation - removing protectionist measures and exposing the domestic economy to global competition, resulting in higher efficiency; link to comparative advantage and living standards
- Promotion of FDI - e.g. tax breaks could help technology transfer and help with training of the workforce: increases productivity/employment/incomes
- Removal of government subsidies - government's scarce tax revenue can be spent on improving health and education, increasing HDI
- Privatisation - increases efficiency in markets due to greater competition hence contributing to lower prices, better quality and more choice: this is likely to improve living standards
- Floating exchange rate systems - makes exports more internationally competitive, increasing domestic employment/incomes and thus HDI
- Microfinance schemes - these small-scale loans allow low-income producers to invest in physical and human capital, improving productivity/incomes
N.B. Award maximum of Level 3 ( 9 marks) if a candidate does not refer to a developing country in their answer
N.B. Award maximum of Level 3 ( 9 marks) if a candidate does not refer to economic development in their answer
Evaluation (8 marks) - indicative content
- Problems of each of the strategies discussed
- Trade liberalisation - could harm domestic infant and geriatric industries, increasing unemployment and hence reducing HDI
- Promotion of FDI - could lead to TNCs exploiting the environment and labour; engaging in tax evasion/avoidance or transfer pricing
- Removal of government subsidies - on e.g. essential goods, such as fuel, food, electricity and water supply, may lead to absolute poverty
- Privatisation - could result in monopolies that could exploit their monopoly power and charge higher prices/reduce the quality
- Floating exchange rate systems - imports could become relatively more expensive, leading to cost-push inflation and hence poverty
- Microfinance schemes: lenders charge borrowers very high interest rates to cover the risk of default, and can result in more indebtedness
- Assessment of the significance of the strategies considered in the analysis
- Interventionist strategies could be more successful in increasing the HDI
- Contrast the effectiveness of strategies used by different countries