What does the word ‘Economy’  actually mean? We use it all the time but its meaning might come as a surprise. The etymology of the word reveals that its first meaning was ‘household management’ but has since grown to signify the presence and use of  ‘wealth and resources of a country’. Colloquially, economy is often used to mean how a person or a country makes money and supports a livelihood.

The field of economic geography concerns itself with the often unevenly distributed spatial dimensions of economic structure and type, resources, and general activities of production and consumption. Economic geography is often oriented around issues and questions of development which refers to the processes of increasing the wealth and quality of life within a country.

But before we talk about development, it might be a good idea to  describe economy and economic development.

Economic Sectors

One way to describe the economy of a place–a city, a country, or an entire world region–is by classifying its economy into four or even five sectors:

1. Primary Sector (aka. extractive) examples: agriculture, mining
2. Secondary Sector  (aka. manufacturing) examples: automobile assembly, textile manufacturing
3. Tertiary Sector  (aka. service) examples: tourism, banking
4. Quaternary Sector (aka. knowledge) examples: education, information-technology, research and development
5. Quinary Sector – decision-making, policy-making

In addition to the five sectors described above, there is also the informal economy which refers to activities that happen outside of any formal regulations. For instance, shoe shining, street performances, flower sales along streets and window washing at stop lights are examples of economic activities that tend to fall with in the informal economy–rarely do people who engage in these activities get protections employees do (in theory) in the formal economy, nor is their compensation for services subject to taxes. Other terms for the informal economic sector is under-the-table or the black market. Those of you reading this might have earned money babysitting, dog or cat feeding  or housesitting and thus have likely participated in the informal economy.

Nearly all economies have elements of each of the types above, albeit in vastly different proportions. In fact, there is a geography to how economic type is distributed across the world, which we will talk about below.

Just as a financial planner would tell you that a diversified financial portfolio is a stronger than a undiversified one, so too is a diversified economy generally stronger than an undiversified one. This means that economies that are nearly all made up of one of the sectors or types above is more vulnerable to damage than one that has economic activity in multiple sectors. Why and how is this the case? Let’s look at an example.

The Arab states have a huge proportion of the world’s oil and gas reserves; as such, the primary economic sector of their economy has been historically and still is in large part very robust in comparison to other sectors. As long as oil and gas are present, extractable, and in demand, this allows the region to easily amass wealth, BUT, what happens when the oil and gas reserves are depleted and/or demand for alternative forms of energy overtake demands for oil and gas? If the Arab states economy were overly reliant on the primary sector of the economy, they may face economic turmoil.

One way countries in the Middle East are working to diversify their economy and ramp up the tertiary and quaternary sectors is through developing various tourism industries  including building islands off the coast with extravagant hotel experiences and educational facilities, such as attracting major universities to open branch campuses in places like Qatar and the United Arab Emirates (UAE). Building the infrastructure to support these expanding sectors takes a huge amount of labor.

Check out this time-lapse of infrastructural development in Dubai, UAE (speed it up to get an idea of how the landscape has changed).

To learn more about issues surrounding the labor conditions facing typically migrant workers from South Asia who come to Arab States for construction-related jobs, including those surrounding building stadiums for the 2022 Wold Cup in Qatar, see World Cup 2022: Qatar’s workers are not workers, they are slaves, and they are building mausoleums, not stadiums by Jonathan Liew.