Transcript development

Development
The International
Experience
Key Issues
1. WHY DOES DEVELOPMENT VARY AMONG COUNTRIES?
–
Economic indicators of development; social indicators of
development; demographic indicators of development.
2. WHERE ARE MORE AND LESS DEVELOPED COUNTRIES
DISTRIBUTED?
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More developed regions; less developed regions.
3. WHERE DOES LEVEL OF DEVELOPMENT VARY BY
GENDER?
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Gender-related development index,; gender empowerment.
4. WHY DO LESS DEVELOPED COUNTRIES FACE OBSTACLES
TO DEVELOPMENT?
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Development through self-sufficiency; development through
international trade; financing development.
Five Economic Indicators of Development
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Gross domestic product,
Economic structure,
Worker productivity,
Access to raw materials, and
Availability of consumer goods.
Indicators of Development
• Economic indicators of development
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Gross domestic product per capita
Types of jobs
Raw materials
Consumer goods
• Social indicators of development
– Education and literacy
– Health and welfare
• Demographic indicators of development
– Life expectancy
– Natural increase rate
– Infant mortality rate
– Crude birth rate
Human Development Index, 2005
Developed by the United Nations, the HDI combines several measures
of development: life expectancy at birth, adjusted GDP per capita, and
knowledge (schooling and literacy).
Human Development Index (HDI) and Recent
Colonial Control
The “HDI” ranks the relative “development” of the world’s countries based on three indicators:
longevity, as measured by life expectancy at birth; educational attainment, measured by a
combination of adult literacy rate (two thirds weight) and combined gross primary, secondary
and tertiary enrollment in schools (one third weight); and standard of living, as measured by
GDP per capita – PPP (purchasing power parity) US$.
Norway’s HDI rank is 1; Canada- 4; United States- 8; Japan- 9; Chile- 43; China- 94;
Sierra Leone- 177.
A Key Factor in Productivity
• People in more developed countries are wealthier
because they are freed from the need to produce
their own food.
• Instead, they can work in more productive
industries.
• By being more productive, wealth is generated to
obtain needed raw materials; these raw materials
in turn stimulate higher productivity.
• Some of the wealth also goes to purchasing
consumer goods, thus stimulating further
production.
Demographics and Development
• The key demographic indicators of
development are
– life expectancy,
– infant mortality rate,
– natural increase rate, and
– crude birth rate.
Annual GDP Per Capita
Annual gross domestic product (GDP) per capita averages over $20,000 in
most developed countries but under $5000 in most less developed countries.
Economic Sectors
1. Primary - such as hunting and gathering,
along with farming
2. Secondary - manufacturing industries
3. Tertiary - service industries like offices,
banks, and hospitals
4. Quartenary - specialized service
industries/management
5. Quinary – creative, innovative societal
developments
Percentage employment in the primary, secondary, and tertiary sectors of
MDCs has changed dramatically, but change has been slower in LDCs.
Manufacturing Value Added Per
Manufacturing Worker
Land-Based Telephone Lines Per Capita
Cellular Telephones Per Capita
Percent Enrolled in School
Percent of Adults Who Are Literate
Percent of Population That is
Undernourished
Calorie Supply Per Capita
Physicians per 100,000
Population
Private Expenditures on
Health Care as Percent of GDP
More and Less Developed Regions
• More developed regions
– Anglo-America
– Eastern Europe
– South Pacific
– Western Europe
– Japan
• Less developed regions
– Latin America
– Southeast Asia
– South Asia
– East Asia
– Middle East
– Sub-Saharan Africa
More & Less Developed Regions
The less developed regions include Latin America, Sub-Saharan Africa, Middle
East, South Asia, East Asia, and Southeast Asia.
Development and Gender
• Gender-related development index
– Economic indicator of gender differences
– Social indicators of gender differences
– Demographic indicator of gender differences
• Gender empowerment
– Economic indicators of empowerment
– Political indicators of empowerment
Gender-Related
Development Index (GDI)
GDI combines income, literacy, education and life expectancy adjusted to reflect
differences in the accomplishments of men and women.
Female College Attendance as
Percentage of Male College Attendance
Female Literacy Rate as Percentage of
Male Literacy Rate
Female Income as Percentage
of Male Income
Percent Seats in National
Legislature Held by Women
Development Strategies
• Development through self-sufficiency
– Elements of self-sufficiency approach
– Problems with self-sufficiency
• Development through international trade
– Rostow’s development model
– Examples of international trade approach
– Problems with international trade
• Financing development
How Can LDCs Promote Development?
1. LDCs need to increase GDP/capita and improve
social & economic conditions of people
2. Two fundamental questions in trying to
encourage development:
a). What are best policies to produce development?
b). How can development be financed?
3. Two ways to do this:
a). International trade
b). Self-sufficiency
International trade
• Countries identify its unique economic assets and
determine what others are willing to buy
• Countries must identify what it can manufacture
and distribute at a higher quality and cheaper
cost than another country
• If countries go through the Rostow stages, then
the economic “trickle down” effect aids others in
the country
• Countries that have taken the International Trade
approach include:
– Saudi Arabia, Kuwait, Bahrain, Oman, – all petroleum
exporting countries
– These countries have Western consumer goods, but
culture changes more slowly (e.g. – Iran)
Rostow’s Development Model
• Stage 1: Traditional society – many engaged in agriculture
and a high percentage of country’s natural wealth
allocated to “non-productive” societal segments such as
the military and religious causes
• State 2: Pre-conditions for “take-off” – An elite, well
educated group initiates innovative economic activities
and country begins to invest in technology and
infrastructure
• Stage 3: The “take-off” – Few industries such as textiles or
food products “take-off”
• Stage 4: The drive to maturity – Modern technology
diffuses to many workers and workers become more
skilled
• Stage 5: Age of mass consumption – Industry shifts to
consumer goods
Self-Sufficiency
• Country should spread investments throughout economic
sectors and encourage producing goods for people in
country
• Imports should be limited through taxes, or limiting
number of imports allowed, or by licensing
• E.G. is India, but population is growing so rapidly, this is
difficult.
• Problems with this approach:
– Inefficient domestic market – too small to make a profit
– Companies feel they are protected from competition, so don’t
keep pace with technology
– Large, often corrupt bureaucracies lead to illegal activities
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Proposed solution: World Bank, etc. lend money to LDCs
to develop hydroelectric power, flood protection, etc.
Income & Demographic Change, 1980- 2005
Rates of natural increase and infant mortality have remained much higher in LDCs
than in MDCs. Since 1980, the natural increase rate has declined at about the
same rates in MDCs and LDCs, while the infant mortality rate has declined more
rapidly in LDCs. Per capita GDP has increased more in MDCs than in LDCs during
this period.
Debt as Percent of Income
Many developing countries have accumulated large debts relative to their GDPs.
Much of their budgets now must be used to finance their debt.
Foreign Direct Investment Flows
Most transnational companies invest in the three core regions of North
America, Western Europe, and Japan. Outside these core regions, the
largest investment is in China.
Development and Debt Finance
• The 42-year graph below
indicates that with few
exceptions, the
northern, western,
wealthy, industrialized,
developed nations have
benefited the most from
liberalized trade and
economic globalization.
Foreign Direct Investment
Core and Periphery in
World Economy
The Core-Periphery Model
Divides the World in 3 Main Sectors
• The core - the area with greatest prosperity
and power.
• The semi-periphery - the area with some
control, but less than that of the core, and
somewhat prosperous.
• The periphery - the area with the least power
and the least amount of prosperity.
Air Pollution in Eastern Europe
Sulfate emissions in the Czech Republic and Slovakia. GIS was used to map
previously secret data on air pollution after the fall of the communist regime.
Extremely high levels were found in some of the main industrial areas.
• Industrial air
pollution from the
developed world is
carried on the
dominant wind
currents up to the
arctic.
• After settling onto
the tundra, snow
and ice it is
absorbed into the
food chain.
• The people and
creatures there
have some of the
highest
concentrations of
toxins in their
bodies of
anywhere on
earth.
Key Terms
• Development
• Fair trade
• Foreign direct
investment
• Gender Empowerment
Measure (GEM)
• Gender-related
Development Index
(GIM)
• Gross domestic product
• Human Development
Index
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Literacy rate
Primary sector
Productivity
Secondary sector
Structural adjustment
program
• Tertiary sector
• Value added