ABSTRACT
The economy has a role to play in the built environment and in the work of the development activist. Money – big or small – and how it is used, whether in big aid programmes or micro-credit, has an influential role to play in the construction industry. In an economic downturn, it is often the building industry that is the first to suffer. Conversely, in times of natural disasters, it is the building industry that is the first to show an upward trend in the stock exchange, as happened in the aftermath of the Japanese earthquake in 2011. Aid programmes also pose many problems – did the third largest economy in the world, Japan, need external aid after the 2011 tsunami and earthquake? Even more bizarrely, Japan now believes that it has a moral obligation to bid for the 2020 Olympics to recover from the tsunami damage (its failed bid for the 2016 Olympics cost Japan £118 billion).3 Should international aid be stopped altogether and efforts switched to concentrating on fair trade, climate change issues and disaster mitigation? Economics is not a science as is commonly believed – it depends on so many variables that there could not be an exact formula that succeeds each time and for each country or region. If it were so, then the economy would be in constant growth and there would be no recession and no stock markets. Rather than being a straight line, it could be depicted as an ever-expanding spiral with ups and downs – in other words, a complex geometry. The economy of a country consists of all its resources – people, natural and man-made – and the economic agents that produce, exchange and distribute the goods or resources of that particular part. An economy can be the result of a process that involves many aspects such as technology, culture, history and the environment. These factors give context and content, and set the conditions and parameters in which an economy functions. All kinds of professions, occupations or economic activities contribute to the economy of a region or communities (Figure 2.1). Some activities such as ‘informal economy’ (Figure 2.2), bringing up children and doing housework are not counted in the economy of the country and this can be an unfair representation of the economy. Regional economy can vary in one country. For example, the South of England is held to have a stronger economy than the North. Countries are usually rated economically according to their gross domestic product (GDP), namely, what the country produces (including goods and services) and consumes internally. GNI is the country’s gross national income. The GNI is the total value that is produced within a country, combining the gross domestic product along with the income obtained from other countries (such as dividends and interest). Although GNI and GDP sound similar, one of the main differences between the two is that the gross national income is based on location, while gross domestic product is based on ownership, instead of where the income is produced. It can also be said that GDP is the value produced within a country, whereas GNI is the value produced by all the citizens. The UK’s Department for International Development (DfID), for example, prefers to use GNI, believing it gives a more accurate picture of the country’s economy.
