Transcript Chapter 11: Development

Chapter 11:
Development
By: Abdul Abdo and Dustin Wang
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Development
• Definition: The process of improving the material condition
of people through growth and diffusion of technology and
knowledge.
• In every place in the world, regardless of size, exists some
sort of level of development.
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There are many ways of
measuring Development
• Gross Domestic Product (GDP): Value of total outputs of goods and services
produced in country, usually over one year.
• Gross National Product (GNP): Includes all goods and services owned and
produced by country overseas.
• Purchasing Power Parity: Measurement tool for each currency to buy an equal
amount of goods.
• Informal sector: Includes all business transactions that were not reported by the
government. And is not included in the GDP.
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Human Development Index
• Definition: Formula used to measure a country’s development level and compare it to other regions and
countries on the rank-ordered list of countries.
• HDI is development by the United Nation and has three factors that distinguish the country being measured;
Economic, Social, and Demographic.
• Its created by selecting one economic factor (GDP), two social factors (literacy, and education), and
one demographic factor (life expectancy)
• Highest HDI is a 1.000, or 100%, and the lowest HDI is 0.000, or 0%. No country in the world has either 100%
or 0% HDI scores.
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Economic Indicator: GDP
• Definition: value of the total output of goods and services produced in a country, normally
during a year.
• Divide GDP by total population to get the average contribution from individuals. MDC’s GDP
per captia exceeds $30,000 and LDC’s GDP per captia is less than $3,000.
• The higher the per capita GDP, the greater the potential for ensuring that all citizens enjoy
comfortable life.
• GDP does not perfectly measure country’s development; GDP measures average (or mean)
wealth, not its distribution.
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Three other Economic Indicators
• The other economic indicators useful in distinguishing
between MDCs and LDCs are: Types of Jobs, Worker
Productivity, and Availability of consumer goods.
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Types of Jobs
• Primary: Directly extract resources from earth.
• Secondary: Manufacturing.
• Tertiary: Provision of goods and services.
• Quaternary: Creation and transfer of information.
• Quinary: Highest level decision making
• Distribution of jobs differ greatly from MDC’s and LDC’s. % of primary
jobs in LDCs is 60%, MDCs is less than 5%
• High agricultural % means people producing food for mainly survival,
and not for sale.
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Social and Demographic
Indicators
• Social Indicators: MDCs use part of their wealth to provide schools,
hospitals, and welfare services. In turn, well-educated, healthy, and
secure population can be more economically productive. Social
indicators may include Education/literacy, and Health/Welfare. HDI uses
literacy/education, and the Quality of literacy/education is measured in
two ways: Student/teacher ratio and Literacy rate (Percentage of a
country’s people who can read and write).
• Demographic Indicator: HDI uses Life expectancy. But other demographic
factors are Infant Mortality Rate, Natural Increase Rate, and Crude Birth
Rate.
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Productivity
• Definition: Value of a particular product compared to the amount of labor needed
to make it.
• Productivity can be measured by the value added per capita. Value added:
gross value of the product minus the costs of raw materials and energy.
• In MDC’s workers produce more with less effort due to technology
(machines, tools, equipment), but LDCs rely solely on human labor and
animal power thus producing less.
• Larger per capita GDP in MDCs in part pays for the manufacture and
purchase of machinery. Which in turn makes workers more productive
and generate more wealth.
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The Development Gap
http://progressivepupil.wordpress.com/2013/03/06/vision-of-true-independence/
• Definition: Widening difference between development levels in
MDCs and LDCs.
• MDCs are improving in their development levels faster than are
LDCs.
• North-South Gap: Refers to the pattern that MDCs are primarily
located in the Northern Hemisphere and LDCs are mainly located
in the Southern Hemisphere.
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Gender-Related Development Index (GDI)
• Constructed similar to the HDI.
• Economic indicators; Per capita female income as a % of per capita male
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income. Social indicators; # of females enrolled in schools compared to #
of males, % of literate females compare to males. Demographic
indicators; Live expectancy of females compared to males.
The GDI penalizes a country for having a large disparity between the
well-being men and women.
A country with complete gender equality would have a GDI of 1.0.
A high GDI means that both men and women have achieved a high level of
development.
A low GDI means that women have a low level of development compared
to men.
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Gender Empowerment Measure (GEM)
• GEM measures the ability of women to participate in the process of
achieving improvements in their status through Political and Economic
power.
• GEM is calculated using: Economic (Per capita female income as a % of
per capita male income, and % of professional and technical jobs held by
women). Political (% of administrative jobs held by women, and % of
members of the national parliament who are women).
• Highest score= 1.0 and that regions with highest GEMs are North
America, Northern Europe, and Oceania.
• Regions with the lowest GEMs are Africa and Asia.
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Challenges to Development
http://www.economicsonline.co.uk/Global_economics/Dependency_theory.html
• Dependency theory became popular in the 1960’s as a response to
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research by Raul Prebisch. Prebisch found that increases in the wealth of
the richer nations appeared to be at the expense of the poorer ones.
Dependence Theory: Argues that LDCs are locked into a cycle of
underdevelopment by the global economic system that supports and
unequal structure.
LDCs are dependent on MDCs for financial and economic support.
MDCs are dependent on LDCs to remain on top of the world economy.
According to theory many countries are poor today because of their
colonization by Europeans.
Dependency theory views the world’s countries as existing in a system of
interlocking parts.
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Core-Periphery Model
http://people.hofstra.edu/geotrans/eng/ch2en/conc2en/coreperipheryurban.html
• Core-periphery model states that the world’s countries are
divided into three groups.
• Core: Consists of industrialized countries with the highest
per-capita incomes and standard of living. An example is the
USA.
• Semi-periphery: Consists of countries that are newly
industrialized and have not caught up to core countries in
level of development. An example is Brazil.
• Periphery: Consists of LDCs with low levels of
industrialization, infrastructure, per capita income, and
standards of living. An example is Angola.
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Wallerstein’s world systems
http://cassian.memphis.edu/history/jmblythe/GlobalF12/GlobalF12.html
• Wallerstein argued that colonization by western
European countries led to economic and political
interactions among different regions (or systems) in
the world and the inequalities that resulted from
domination and exploitation by core countries of the
semi-peripheral and peripheral regions.
• Argues unequal positions of countries grew out of early
exploration and colonization that began to create a
network, or system, of interrelated economies in the
world.
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To promote development, LDCs choose
one of two models:
• The self-sufficiency approach pushes under-developed
countries to provide for their own people, independent
of foreign economies.
• International trade approach pushes under-developed countries to
identify what it can offer the world then direct investment towards
building on that industry. This model is built upon the comparative
advantage concept. Eventually a country will develop an advantage over
the rest of the world in producing a good or service. More successful then
the self-sufficiency approach. World Trade organization (WTO), works to
reduce barriers to international trade.
• When most countries were following the self-sufficiency approach two
groups of countries choose the international trade approach during the
mid-20th century: The Four Dragons (Tigers) and the Arabian Peninsula.
The Four Asian tigers are South Korea, Singapore, Taiwan, and Hong
Kong.
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Rostow’s Development Model
• Rostow’s model consists of five stages through which all countries move as they improve their
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economic development.
Stage One- Traditional Society: Economic activity is mainly subsistence farming with little
investment in innovation. Called “non-productive” activities.
Stage Two- Preconditions for Takeoff: As a region begins to develop, a small (elite) group of
people initiates innovative “takeoff” economic.
Stage Three- Takeoff: The small # of new industries that begin to emerge in Stage Two begin to
show rapid economic growth.
Stage Four- Drive to Maturity: At this stage, more advanced technology and development
begins to spread to a wider region and other industries (not just “take-off”) begin to
experience rapid growth and workers become more skilled and educated.
Stage Five- High Mass Consumption: The economy shifts from the dominance of secondary
factory jobs to the dominance of service-oriented jobs that require higher levels of education.
According to Rostow, once a country starts investing in capital, it will begin to develop.
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International trade: Foreign Direct Investment and
Structural Adjustment Programs
• Foreign Direct Investment: Investment made by a foreign company in the
economy of another country.
• As a result special economic zones are created to attract foreign
investment in the country itself. These regions offer special tax breaks,
eased environmental restrictions, and other incentives to attract foreign
business and investment.
• International Monetary Fund: Provides loans to countries experiencing
balance-of-payment problems that threaten expansion of international
trade.
• Structural adjustments are requirements attached to a loan from a lending
agency like the IMF that force the country receiving the loan to make
economic changes in order to use the loan.
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NGO’s and Fair trade
• Non-governmental organizations: Organizations run by charities
and private organizations, rather than a government agency.
Provides supplies, resources, and money to local businesses and
causes that advance economic and human development.
• Fair Trade: Means that products are made and traded according to
standards that protect workers and small businesses in LDCs.
• Two sets of standards make up fair trade: Producer standards
(Advocates work with small businesses and democratically run
cooperatives, and Consumers pay higher prices for fair trade
products) and Worker standards (Requires employers to pay
workers fair wages, permit union organizing, and comply with
minimum environmental and safety standards).
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Globalization
• Globalization is the term used to describe the
increasing sense of interconnectedness and spatial
interaction among governments, cultures, and
economies.
• New International Division of Labor
• The NIDOL breaks up the manufacturing process by having various pieces
of a product made in various countries and then assembling the pieces in
another country
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Environmental Impacts
• Sustainable development: a rate of growth and resource-consumption
that can maintained from one generation to another.
• Ecotourism: tourist operations that aim to do little harm to the
environment.
• Green House effect: Geographers are concerned with the rising average
global temperature caused in part by spread of industrialization and the
related increase in consumption and pollution.
• Global warming: The global warming theory argues that Earth’s rise in
temperature is causing negative consequences, such as premature
melting of the polar ice caps, which could cause a rise in sea levels and an
interruption of oceanic patterns.
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GAME TIME!
• Rules
• Have one person be the “Runner”
• Must write LEGIBLY, the correct
answer on a sheet of paper.
• First runner from any group to
bring their paper up with the
correct answer wins!
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QUESTION 1
• What is the definition of
Development?
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ANSWER
• The process of improving
the material condition of
people through growth and
diffusion of technology and
knowledge.
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QUESTION 2
• What is the Difference
between GDP and GNP?
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ANSWER
• GDP only encompasses
Domestic production,
whereas GNP encompasses
goods and services
produced Overseas.
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QUESTION 3
• Name an Example of a
Core, Semi-Periphery, and
Periphery country
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ANSWER
• Core: Consists of industrialized countries with the highest
per-capita incomes and standard of living. An example is
the USA.
• Semi-periphery: Consists of countries that are newly
industrialized and have not caught up to core countries in
level of development. An example is Brazil.
• Periphery: Consists of LDCs with low levels of
industrialization, infrastructure, per capita income, and
standards of living. An example is Angola.
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QUESTION 4
• Name a Quaternary
Activity
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ANSWER
• Quaternary - Creation and
transfer of information.
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LAST QUESTION!
• List the 5 stages of
Rostow’s Model (Correct
names!)
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ANSWER
• Stage One- Traditional Society
• Stage Two- Preconditions for
Takeoff
• Stage Three- Takeoff
• Stage Four- Drive to Maturity
• Stage Five- High Mass Consumption.
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