Transcript Ch_ 10

Development
Chapter 10
Key Question:
How do you Define and
Measure Development?
Measuring Development
Gross National
Product (GNP)
Measure of the total
value of the officially
recorded goods and
services produced by the
citizens and
corporations of a
country in a given year.
Includes things
produced inside and
outside a country’s
territory.
Gross Domestic
Product (GDP)
Measure of the total
value of the officially
recorded goods and
services produced by the
citizens and
corporations of a
country in a given year.
Gross National
Income (GNI)
Measure of the
monetary worth of what
is produced within a
country plus income
received from
investments outside the
country.
** Most common
measurement used
today.
Per Capita GDP
• The difference between more developed and less developed
regions is widening.
• On a north polar projection, LDCs appear to be located in
peripheral locations.
• Good indicator of the spatial distribution of global wealth, the
approximate level of material well being in a country, the
number of countries below the poverty line.
• Average GDP per capita for MDCs is appx $27,000; for LDCs
is $4000
• The world is divided by a line that runs from the east to the
west at about 30° north latitude into two regions in which
MDCs take the northern section and the LDCs take the
southern section; the one exception is the south Pacific. In
LDCs, consumer goods such as telephones, televisions, and
motor vehicles are owned by a minority of the people.
Issues with Measuring
Economic Development
• All measurements count the:
– Formal Economy – the legal economy that
governments tax and monitor.
• All measurements do not count the:
– Informal Economy – the illegal or uncounted
economy that governments do not tax or keep
track of.
– Correlating economic, social, and demographic
indicators of development shows that a more dev
country is likely to rank among the top ten in all
major development indicators.
Other Ways of Measuring Development
• Occupational Structure of the Labor Force
• Productivity (the value of a particular product compared to
the amount of labor needed to produce it) per Worker
• Transportation and Communications
Facilities per Person
• Dependency Ratio
• Machines, technology, tools, equipment enable MDCs to
produce materials with a high value; people are more
productive in more developed countries because they have
access to more technology.
• LDCs depend on human and animal power for production. To
finance development, LDCs borrow from commercial banks.
• Role of site and situation
Differences in
Communications
Connectivity
Around the World
Dependency Ratio by Country, 2005
A measure of the number of people under the age of 15 and
over the age of 65 that depends on each working-age adult.
What does Development Mean?
• Development implies “progress”
• Generally refers to an improvement in
material conditions.
– Progress in what?
– Do all cultures view development the same
way?
– Do all cultures “value” the same kinds of
development?
Development Models
Modernization Model
Walt Rostow’s model assumes all countries follow a similar
path to development or modernization, advancing through
five stages of development, climbing a ladder of
development.
- traditional
- preconditions of takeoff
- takeoff
- drive to maturity
- high mass consumption
According to Rostow's, the process of development begins
when an elite group initiates innovative activities.
Rostow’s Ladder of Development
Assumes that all countries can reach the same level of
development and that all will follow a similar path.
Is the idea of economic development inherently
Western? If the West (North America and
Europe) were not encouraging the “developing
world” to “develop,” how would people in the
regions of the “developing world” think about
their own economies?
Key Question:
How does Geography affect
Development?
Structuralist Theory
• a model of economic development that
treats economic disparities among
countries or regions as the result of
historically derived power relations within
the global economic system
Classical Liberalism, Progressivism, and
Neoliberalism
• Classical liberals like Thomas Hobbes claimed that govt was created by
individuals to protect themselves from one another, and that the purpose of
government should be to minimize conflict between individuals that would
otherwise arise in a state of nature. Laissez-faire
• The contemporary conception of progressivism emerged from the vast social
changes brought about by industrialization in the late 19th cent, out of the
view that progress was being stifled by vast economic inequality between the
rich and the poor; minimally regulated laissez-faire capitalism with out-ofcontrol monopolistic corporations; and intense and often violent conflict
between workers and capitalists, measures (like more govt intervention) were
needed to address these problems.
• Since the 1980s, the term neoliberalism has been used by scholars primarily
in reference to the resurgence of 19th century ideas associated with laissezfaire economic liberalism; its advocates supported extensive economic
liberalization policies such as privatization, fiscal austerity, deregulation, free
trade, and reductions in government spending in order to enhance the role of
the private sector in the economy.
Dependency Theory
The political and economic relationships between countries
and regions of the world control and limit the economic
development possibilities of poorer areas.
-- Economic structures make poorer countries dependent on
wealthier countries; LDCs have a higher ratio than MDCs of
people under 15 and over 64, compared to those in the work
force
-- Little hope for economic prosperity in poorer countries.
-The economy of East Asia – and the entire world, for that
matter – is being driven in the twenty-first century primarily
by China
Dollarization –
Abandoning the local currency of a country and adopting
the dollar as the local currency.
El Salvador went through dollarization in 2001
Geography and Context
* Cannot simply study what is produced.
* Need to examine how and where it is produced
and where the production is on the commodity
chain.
* Examine commodity chains and look for the
kinds of economic processes operating at each
link in the chain.
Commodity Chain
Series of links connecting
the many places of
production and distribution
and resulting in a
commodity that is then
exchanged on the world
market.
They usually begin in
periphery countries; reap
the highest profits for core
countries; involve several
locations around the world;
located near cheap sources
of labor.
How processes operated at each step in the
commodity chain that produced the dolomite
stone for this fireplace?
Three Tier Structure
Core
Periphery
Processes that incorporate higher
levels of education, higher
salaries, and more technology
* Generate more wealth in the world
economy
Processes that incorporate lower
levels of education, lower
salaries, and less technology
* Generate less wealth in the world
economy
Semi-periphery
Places where core and periphery
processes are both occurring.
Places that are exploited by the
core but then exploit the
periphery.
* Serves as a buffer between core
and periphery
Cold War
• The main reason Western European countries produce high value
goods and services is to pay for the importation of raw materials
• During the Cold War, the Soviet Union emphasize to the countries in
Eastern Europe that could possibly improve development rates by:
heavy industry, such as machines, transportation, mining and other
primary sector jobs, spread of factories to lessen the vulnerability of
vital industries, locate manufacturing sites near raw materials.
• Eastern European countries rejected the Soviet plan because they had
experienced central planning before; did not have efficient agricultural
practices; had to import food from other regions, orders sent from the
government were often not put into effect, much pollution
• Under communism, Eastern Europe was characterized by favorable
balances between population and resources, investment in heavy
industries such as iron and steel, governments that made the key
decisions concerning the national economy
• The major asset of the Eastern European region is abundant reserves
of many raw materials.
Gender Empowerment Measure (GEM)
• index designed to measure of gender equality.
GEM is the UN’s Development Program's attempt
to measure the extent of gender inequality across
the globe's countries, based on estimates of
women's relative economic income, participations
in high-paying positions with economic power, and
access to professional and parliamentary
positions.
Compare and contrast Rostow’s ladder of
development with Wallerstein’s three-tier
structure of the world economy.
Key Question:
What are the Barriers
to and the Costs of
Economic Development?
Human Development Index (HDI)
• UN measurement of development includes: per capita
GDP, literacy rates, school enrollment rates, and life
expectancy.
• HDI is lowest in Sub-Saharan Africa, highest in Norway
• Development prospects are limited in Sub-Saharan Africa
b/c of capacity of land to produce food, colonial legacy,
poor leadership, uneven dist of wealth globally
• The highest level of development within Latin America is
found in southern So Am; the less developed region with
the highest percentage of people living in urban areas is
Latin Am
Barriers to Economic Development
• Low Levels of Social Welfare
– Trafficking
• Foreign Debt
– Structural adjustment loans
– Countries in Latin Am have accumulated the
largest debts numerically but Sub-Saharan Afr
as a % of GNI
• Political Instability
• Widespread Disease
– Malaria
Foreign Debt Obligations
Total interest payments compared to the export of
goods and services.
Foreign Debt Obligations
Foreign Debt and Economic Collapse
in Buenos Aires, Argentina, 2001
Widespread Disease
• Malaria kills 150,000 children in the global
periphery each month.
Tamolo, India
This baby sleeps
under a mosquito
net distributed to
villagers by
UNICEF workers.
Global Distribution of
Malaria Transmission Risk
Costs of Economic Development
• Industrialization
– Export Processing Zones (EPZs), maquiladoras
(zones in northern Mexico with factories
supplying manufactured goods to the U.S.
market), and special economic zones (SEZs).
• Agriculture
– desertification
• Tourism
Fair Trade
• Term for something that emphasizes small
businesses; worker-owned and democratically-run
cooperatives; and requires employers to pay
workers appropriate wages, permit union
organizing, and comply with the minimum
environmental/ safety standards.
• According to the international trade approach to
development, a country should identify valuable
assets such as abundance of agricultural
products, low cost distribution networks, high
quality manufactured goods, goods for export.
Export Processing Zones
Four Asian Dragons
• Term used in reference to the highly free-market
and developed economies of Hong Kong,
Singapore, South Korea, and Taiwan. These
nations and areas were notable for maintaining
exceptionally high growth rates (in excess of 7
percent a year) and rapid industrialization
between the early 1960s (mid-1950s for Hong
Kong) and 1990s.
• The principal asset of the Four Dragons to
promote development is low labor costs.
Areas Threatened by Desertification
Economic Backwater
• place or condition in which no development
or progress is occurring; backwaters exist
when other regions in a country experience
great levels of economic development and
this concentration has negative effects on
other regions that cannot generate high
levels of ec activity. (i.e. Upper Great Plains,
Lower Mississippi Valley, U.S., Buenos Aires,
western China)
Think of a trip you have made to a poorer
area of the country or a poorer region of
the world. Describe how your experience in
the place as a tourist was fundamentally
different from the everyday lives of the
people who live in the place.
Key Question:
Why do Countries
experience Uneven
Development within the State?
Core-Periphery
The pessimistic viewpoint about a lack of
economic development in certain locations on
the globe can be attributed to their lack of
foreign investment; exploitation by core of
periphery.
Locational Interdependence Theory
• Locational interdependence suggests competitors, trying
to maximize sales, will seek to limit each other’s territory
as much as possible by locating close to each other in the
middle of their combined customer base. If both sellers
are equidistant from their potential customers, neither has
a greater advantage.
• The impact of a business’s geographic location on its
ability to operate and make a profit; for small-business
owners, understanding the connection between place and
success can help guide them in researching and choosing
the right place to start a business.
Locating Industries
• cost of labor.
• cost of land.
• market demand for goods.
• government policies (taxes, tariffs).
How Government Policies
Affect Development
• Governments
–
–
–
–
–
get involved in world markets
price commodities
affect whether core processes produce wealth
shape laws to affect production
enter international organizations that affect trade; biggest
problem in promoting development through the
international trade alternative is unequal distribution of
resources.
– focus foreign investment in certain places
– support large-scale projects
Governments and
Corporations can
create Islands of
Development:
Places built up by
a government or
corporation to
attract foreign
investment and
which has
relatively high
concentrations of
paying jobs and
infrastructure.
Government-created Island of Development
Malaysian government built a new, ultramodern capital at
Putrjaya to symbolize the country’s rapid economic growth.
Corporate-created Island of Development
The global oil industry has created the entire city of
Port Gentile, Gabon to extract Gabon’s oil resources.
The country with the largest oil reserves in the world
is Saudi Arabia. Organization of Petroleum
Exporting Countries (OPEC) cartel est in 1960 is the
primary group setting oil prices.
OPEC
Nongovernmental
Organizations (NGOs)
entities that operate independent of state and local
governments, typically, NGOs are non-profit
organizations. Each NGO has its own focus/set of goals;
influential in spearheading international initiatives on
social, economic, and environmental issues .
Microcredit program:
loans given to poor
people, particularly
women, to
encourage
development of
small businesses.
Southwest Asia
In terms of today’s global economy,
considered the resource frontier of the world
because of its oil reserves.
Petroleum reserves in the Middle East are
concentrated primarily along the Persian Gulf
states.
How do actors in nongovernmental organizations (NGOs)
mobilize political change?
An Indonesian woman (on left) who migrated to Saudi Arabia as a
guest worker talks with an Indonesian activist (on right) who works to
defend migrant workers’ rights.
Levels of Development
• First World: industrialized, service-based
economies
• Second World: Communist/centrally planned
economies
• Third World: mainly agricultural, resourcebased economies
• Fourth World: Third World states that have
experienced some sort of economic crisis.
• Fifth World: Third World states that lack a
functioning economy and have no formal
national government.
Neocolonialism and Self-Sufficiency
• Neocolonialism: concept that LDCs are still
economically dependent upon more MDCs for their
economic livelihood. The US has the largest coal
reserves in the world; Russia the largest natural gas
reserves.
• The self-sufficiency model, or balanced growth, says
a country should spread investment as equally as
possible across all sectors of its economy and in all
regions. The principal benefit of the self-sufficiency
approach is to promote balanced growth of all
economic sectors but self-sufficiency policies have
encouraged inefficient industries.
• http://www.lewishistoricalsociety.com/wiki/tiki-read_article.php?articleId=79
Sustainable Development
• The idea that resources should be conserved so that
people living today can meet their needs without limiting
the ability of future generations to do the same.
• Sustainable development is a collection of methods to
create and sustain development which seeks to relieve
poverty, create equitable standards of living, satisfy the
basic needs of all peoples, produce sustainable economic
growth and establish sustainable political practices all
while taking the steps necessary to avoid irreversible
damages to natural capital in the long term in turn for
short term benefits by reconciling development projects
with the regenerative capacity of the natural environment.
Sustainable Development
Take an item of clothing out of your closet, and
using the Internet, try to trace the commodity
chain of production. What steps did the item go
through before reaching you? Consider whether
core or peripheral processes were operating at
each step and consider the roles governments
and international political regimes played along
each step.