Transcript Global Economic Development

Global
Economic
Development
What is “development”?
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Development is the process by which a nation
improves the economic, political, and social wellbeing of its people.
“Developed nations” – have a higher average level
of material well-being
Less Developed Countries – LDCs :
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nations with a low level of material well- being
Measurements of development
GDP – Gross domestic Product – the value of goods
& services produced in a country in a year
*****Per capita GDP – divides the gdp by the
population
-- better measure of standard of living
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#1 – USA, #2 – China, #3 - Japan
What are some other measures of
development?
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Energy consumption :
- the amounts of fossil fuel, hydroelectricity,
and nuclear energy a nation uses depends on
its level of industrialization
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Labor force :
nations with little industrialization tend to have
most of labor force devoted to agriculture –
subsistence farming
Consumer goods :
a large number of consumer goods – people have
basic needs met & money left over for “wants”
Literacy rate :
- the portion of the population over age 15 that
can read & write
- more education = more productivity
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Life expectancy :
- the average expected life span of an individual
- indicates quality of life – nutrition, sanitation,
health care, etc.
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Infant mortality rate :
-the number of deaths in the first year of
life per 1000 live births
- indicator of nutrition, health care, sanitation
Financing development
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Internal financing :
- from savings of citizens
- most people in LDCs don’t have enough $ to save …
& the wealthy often keep $ in foreign banks and
invest in foreign companies
Foreign investment
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Foreign direct investment:
- the establishment of an enterprise by a foreigner
- ex : American company building a factory in Brazil
Foreign portfolio investment :
- foreigners making purchases in country’s stocks
and bonds market
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Foreign aid
loans and aid for development :
- humanitarian, military, political, economic
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International Economic Institutions
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World Bank :
- founded 1940 – raises $ on financial markets &
contributions from wealthier member nations
- offers loans, advice & other resources to over 100
LDCs
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International Monetary Fund:
- 1946 – originally to stabilize international
exchange rates
- facilitates development through debt
rescheduling, stabilization programs
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United Nations Development Program –UNDP
- funded by contributions of UN members
- dedicated to the elimination of poverty through
development
- 90% of its resources go to 66 low-income nations,
where 90% world’s poorest people live