Transcript Chapter 9 Key Issue 2

Chapter 9
Key Issue 2
Where Are More and Less
Developed Countries
Distributed?
Key Concepts In Development
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Development is the process of economic growth, in which
countries try to improve their level of material wealth
through the diffusion and realization of resources,
knowledge, and technology.
The Human Development Index (HDI) is one measure of
development. It was created by the U.N. and calculates
development in terms of human welfare rather than money
or productivity.
It evaluates human welfare in three areas: economic,
social, and demographic.
The economic factor is gross domestic product per capita
(GDP); the social factors are the literacy rate and amount
of education; and the demographic factor is life expectancy.
The highest HDI possible is 1.0 or 100% and the countries
of the world can be categorized into nine regions according
to their level of development.
More Developed Regions
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Five of the nine regions identified by the
United Nations HDI are more developed.
These include Anglo-America, western and
eastern Europe, Japan, and the South
Pacific.
Anglo-America has the highest HDI (0.94)
and is well endowed with natural
resources and agricultural land.
It has developed high-tech industries, and
is a leading consumer and the world’s
largest market.
More Developed Regions cont.
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Western Europe has a very high HDI (0.93). It must buy
many raw materials from other countries but it has
developed economies around high-value goods and services
industries to offset these imports.
Western Europe has offset the potential disadvantages of a
history of conflict and cultural diversity by creating the
European Union, which is potentially the world’s largest and
richest market.
Eastern Europe has the lowest HDI of these 5 regions
(0.80) and is the only region where the HDI has actually
declined in recent years. This is the result of the legacy of
communist rule.
The region’s HDI has declined because of the economic
vacuum created by the end of communist rule together with
higher death rates.
Many central European countries have made the transition
to market economies and have benefited from closer ties to
the European Union. However, other countries, especially
those from the former Soviet Union and Yugoslavia,
continue to languish.
More Developed Regions cont.
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Japan has become a great economic
power despite lacking key resources. It
has developed a skilled labor force that
specializes in high-quality and high-value
products.
Australia and New Zealand share many
cultural characteristics with Britain,
although their economies, which are net
exporters of food and other resources, are
increasingly tied to Asian countries.
Less Developed Regions
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The six regions that can be classified as developing are
Latin America, East Asia, the Middle East, Southeast Asia,
South Asia, and Sub-Saharan Africa in order of
development level.
A higher percentage of people in Latin America, with an HDI
of 0.80, live in urban areas than any other developing
region. Development in this region is also characterized by
tremendous inequality in income distribution.
In East Asia, which has an HDI of 0.76, China is now the
world’s second largest economy, and the largest market for
consumer products. Manufacturing has moved to this
region because of low wages which is driving down factory
pay around the world.
The harsh physical environment of the Middle East, with an
HDI of 0.68, does not support high population
concentrations but the region has the largest percentage of
the world’s petroleum reserves. This allows many countries
in the region to enjoy a trade surplus and use petroleum
wealth to finance economic development.
Less Developed Regions cont.
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In the Middle East there is a large gap in per
capita income between the petroleum-rich
countries and those that lack resources.
These countries have to deal with traditional
cultural values associated with Islam which can
hinder development, especially where the role of
women is concerned.
The United Nations has constructed an
Alternative Human Development Index for Middle
Eastern countries that identifies three reasons for
the region’s relatively low HDI-lack of political
freedom, low education and literacy rates, and
lack of opportunities for women.
Less Developed Regions cont.
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Indonesia, Vietnam, and Thailand are the most populous
countries in Southeast Asia, a region that concentrates on
the production of agricultural products that are used in
manufacturing.
Some countries in this region, including Thailand,
Singapore, Malaysia, and the Philippines, have developed
rapidly, especially because of growing manufacturing built
on cheap labor.
South Asia has the second-highest population and the
second-lowest per capita income.
India is one of the world’s leading rice and wheat producers
thanks in large part to the innovations of the Green
Revolution. It now has the world’s fourth largest economy.
With an HDI of 0.51, Sub-Saharan Africa is the poorest
region in the world, although it is a major source of mineral
wealth. Many of the region’s economic and political
problems are legacies of the colonial era.