Transcript Human Geography By James Rubenstein

Human Geography
By James Rubenstein
Chapter 9
Key Issue 4
Why Do Less Developed Countries
Face Obstacles to Development?
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In recent years, LDCs have made
improvements in development,
but the gap between LDCs and
MDCs have continued to widen.
Natural Increase has dropped
20% in LDCs compared to 83% in
MDCs.
1/5th of the world’s people (in
MDCs) consume 5/6ths of the
world’s goods.
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Progress
toward
development
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To reduce disparities between
the rich and poor countries,
LDCs must develop more
rapidly. They must . . .
adopt policies that successfully
promote development (emphasis
is on international trade).
They must find funds to pay for
the development (emphasis is on
self-sufficiency).
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Elements of SelfSufficiency Approach
1. Spread investment as equally as
possible across all sectors of the
economy and regions.
2. Isolate fledgling businesses
from international corporations.
3. Set barriers to limit imports.
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India: Example of the
Self-Sufficiency Approach
1. Limited imports of foreign
goods
2. Exports were discouraged.
3. Government approval required
for expansion.
4. Businesses subsidized.
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Problems with the SelfSufficiency Alternative
1. Inefficiency - protects
inefficient businesses.
2. Large Bureaucracy – the
complex administration, needed
to manage controls, encouraged
abuse and corruption.
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Elements of International
Trade Approach
1. What resources does a country
have in abundance that other
countries are willing to buy?
2. What products can the country
manufacture and distribute at a
higher quality and lower cost to
other countries?
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*Rostow’s 5 stage
Development Model
1.
2.
3.
4.
5.
The
The
The
The
The
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traditional society.
preconditions for takeoff.
takeoff.
drive to maturity.
age of mass consumption.
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The Traditional Society
A very high percentage of
population engaged in
agriculture.
A high percentage of national
wealth allocated to
“nonproductive” activities, such
as the military and religion.
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The Preconditions for
Takeoff
Under influence of well educated
leaders, the country starts to
invest in new technology and
infrastructure, such as water
supplies and transportation
systems.
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The Takeoff
Rapid growth, technical advances,
and high productivity occur in a
limited number of economic
activities.
Other sectors of the economy
remain dominated by traditional
practices.
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The Drive to Maturity
Modern technology diffuses from
take-off industries to a wide
variety of industries.
Workers become more skilled and
specialized.
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The Age of Mass
Consumption
The economy shifts from
production of heavy industry
to consumer goods.
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MDCs are in stages 4 and 5.
As a country concentrates on
international trade, it benefits
from exposure to consumers in
other countries.
Rostow’s model suggests that any
country can become more
developed.
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Examples of International
Trade Approach
Persian Gulf States used petroleum
revenues to finance large projects
and provide consumers goods.
South Korea, Singapore, Taiwan,
and Hong Kong used cheap labor
to produce and sell products
inexpensively.
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Problems with the
International Trade
Alternative
1. Uneven Resource
Distribution
2. Market Stagnation
3. Increased Dependence on
MDCs
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Uneven Resource
Distribution
LDCs suffer when the resource
that they have for sale doesn’t
command a large enough price
to enable them to purchase
products needed for growth.
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Market Stagnation
The slow growth of MDCs
population can and has limited
market size of products from
LDCs.
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Increased Dependence on
MDCs
Investments in takeoff
industries may reduce
production of necessities for
the population, forcing an LDC
to depend on MDCs for those
necessities.
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Recent Triumph of the
International Trade
Approach
Since India dismantled its
barriers to international trade,
its per capita GDP has increase
from 4% to 6% annually.
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World Trade Organization
Established in 1995, by
countries representing 97% of
world trade,
to promote, and remove
barriers to international trade
in all countries.
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Critics of the WTO
Liberals charge the WTO as
antidemocratic.
Conservatives charge that
the WTO compromises the
sovereignty of individual
countries.
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Financing Development
LDCs must generally obtain loans
from MDCs.
From banks and international
organizations, and
From direct investment by
transnational corporations.
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Loans
The World Bank and the
International Monetary Fund lend
about $50 billion annually to LDCs
for development.
Commercial banks from MDCs have
a current outstanding loans to
LDCs totaling $2.1 trillion.
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Problems with Loans
Half of the projects funded in
Africa have ended up as failures.
Many LDCs have accumulated debt
that exceeds annual income.
Lending agencies have had to cancel
debt and encouraged LDCs to
adopt structural adjustment
programs.
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Debt as a percentage of income
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Structural Adjustment Programs
Policies that create conditions
encouraging international trade,
such as raising taxes, reducing
government spending, controlling
inflation, selling publicly owned
utilities to private corporations,
and charging citizens more for
services.
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Transnational Corporations
Corporations operating in
countries other than the one
in which its headquarters are
located.
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Flow of Investment
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Core and
Periphery
Core and
Periphery
Most
MDCs
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Most
MDCs
are
located
above
the 30o
north
latitude.
31
Finis
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