DP Economics

Test builder »

Question 21M.2.HL.TZ0.3d

Select a Test
Date May 2021 Marks available [Maximum mark: 8] Reference code 21M.2.HL.TZ0.3d
Level HL Paper 2 Time zone TZ0
Command term Evaluate Question number d Adapted from N/A
d.
[Maximum mark: 8]
21M.2.HL.TZ0.3d

Can the Democratic Republic of the Congo achieve its economic potential?

  1. The Democratic Republic of the Congo (DRC) is a nation of great potential. It has large mineral resources and an abundance of fertile land. The mining and export of cobalt, copper and gold are the main source of government revenue. However, the abundance of natural resources causes devastating conflicts as rebel groups fight for control of the DRC’s resources. With a population of 80 million and gross domestic product (GDP) per capita of only US$457, the DRC is one of the world’s poorest nations. It is ranked 176 in the world in terms of the Human Development Index (HDI).

  2. The government has been accused of relying too much on tariffs, but to improve living standards, the government needs revenue to spend on agriculture, electricity and roads. Furthermore, business owners in the DRC complain of corruption and increasing “red tape” (excessive regulations).

  3. The government believes that a strong agricultural sector could boost economic growth but only 10 % of the land is used for farming. Rice, maize and other crops grow well in the tropical climate and yet the government spends US$1 billion per year importing basic foods. According to a government spokesperson, the lack of infrastructure is a major barrier to the processing and transporting of agricultural products. The DRC’s road network is so bad that farmers and traders often make a two-week trip in small boats down the Congo River to sell their produce. The DRC has just 27 877 kilometres (km) of roads. It is estimated that 90 000 km of national roads and 150 000 km of rural roads must be built.

  4. In addition, the World Bank reports that only 17 % of the DRC’s population has access to electricity, despite the capacity of the Congo River to generate enough electricity to satisfy the needs of the region.

  5. To make matters worse, the regional conflicts have affected the availability of healthcare services. It is estimated that half of the health centres have been looted*, burnt or destroyed. Government expenditure on healthcare per capita remains one of the lowest in the world. Non-governmental organizations (NGOs) are relied on to protect the health and wellbeing of citizens. NGOs help to achieve this by distributing medicine and teaching families about hygiene and proper sanitation.

*looted: goods stolen from a place, typically during a war or riot

[Source: Médecins Sans Frontières/Doctors Without Borders (MSF), 2017. D. R. Congo: Urgent need for aid in the rural areas
of Kasai. [online] Available at: https://prezly.msf.org.uk/d-r-congo-urgent-need-for-aid-in-the-rural-areas-of-kasai#.

AFP, News24, 2018. Restive DRC’s big challenge - fulfilling economic potential. [online] Available at:
https://www.news24.com/Africa/News/restive-drcs-big-challenge-fulfilling-economic-potential-20181003
[accessed 3 October 2018]. Source adapted.]

(d)

Using information from the text/data and your knowledge of economics, evaluate the effectiveness of interventionist policies as a means of achieving economic development in the DRC.

[8]

Markscheme

Examiners should be aware that candidates may take a different approach which, if appropriate, should be rewarded.

Do not award beyond Level 2 if the answer does not contain reference to the information provided.

“Evaluate” requires candidates to make an appraisal by weighing up the strengths and limitations.

Responses may include:

  • a definition of economic development
  • a definition of interventionist policies.

Economic analysis may include:

  • poverty cycle
  • interventionist supply-side policies
  • trade protection
  • PPC
  • FDI.

Strengths of interventionist policies may include:

  • government could provide a social safety net as GDP per capita is low (paragraph [1])
  • government spending to encourage investment in agricultural sector (e.g. subsidies) (paragraph [2])
  • increased spending in the agricultural sector will create jobs (paragraph [2])
  • increased spending in the agricultural sector will reduce reliance on imports and improve food security
  • government provision of infrastructure in roads and cities encourages future FDI which may create jobs (increase in LRAS or PPF) (paragraph [3])
  • government building hydroelectric generation plants increases electricity access to citizens and business and encourages FDI which creates jobs (paragraph [4])
  • tariffs can supply additional revenue for government spending (paragraph [2])
  • tariffs can protect infant industries particularly in agriculture (paragraph [2])
  • positive externalities / welfare loss reduced when government increases healthcare provision (paragraph [5]).

Limitations of interventionist policies may include:

  • overdependence on income from mining sector (paragraph [1])
  • increased government intervention may increase corruption (paragraph [2])
  • weak private sector means reduces potential to collect tax revenue
  • significant costs to budget to provide road and hydroelectricity infrastructure (paragraph [3] and [4])
  • government investment in infrastructure may lead to high debt creating a burden to future generations (paragraph [3] and [4])
  • increasing red tape discourages investment in the private sector (paragraph [2])
  • tariffs on imported inputs increases input costs for firms and reduces output (paragraph [2]).

To reach level 3, students must show awareness of the ways in which interventionist policies will impact upon economic development (not simply discuss the advantages and disadvantages of interventionist policies in general). This means to link the evaluation to how they will reduce poverty, increase living standards, reduce income inequalities and increase employment opportunities, improve health and education indicators.

Any reasonable evaluation.

Examiners report

This was poorly answered with few candidates having little understanding of the demands of the question. Such as:

  • too few focused on economic development. Many relied on the impact of the policies on economic growth with only passing reference to economic development
  • many failed to identify appropriate interventionist policies related to economic development. Many relied on fiscal and monetary policies while others confused supply-side market-based policies with interventionist policies
  • answers tended to be descriptive rather than analytical, with little in terms of evaluation/reasoned judgment
  • too many simple paraphrased the extract or repeated the information provided in the text
  • many candidates did not out the response in the context of the DRC's economic development, thus providing a generic response. 

Syllabus sections