DevelopmentDevelopment

Chapter 9Chapter 9

Key IssuesKey Issues

1.1. Why does development vary among Why does development vary among countries?countries?

2.2. Where are more and less developed Where are more and less developed countries distributed?countries distributed?

3.3. Where does level of development Where does level of development vary by gender?vary by gender?

4.4. Why do less developed countries Why do less developed countries face obstacles to development?face obstacles to development?

DevelopmentDevelopment

DefDef.- process of improving the .- process of improving the material conditions of people through material conditions of people through diffusion of knowledge and diffusion of knowledge and technologytechnology

MDCs aka relatively developed or as MDCs aka relatively developed or as developeddeveloped

LDCs aka developing countriesLDCs aka developing countries

The Human Development Index The Human Development Index (HDI)(HDI)

DefDef.- indicator of level of .- indicator of level of development for each country, development for each country, constructed by UN, combining constructed by UN, combining income, literacy, education, and life income, literacy, education, and life expectancyexpectancy• Created in 1990Created in 1990• Highest possible HDI is 1.0Highest possible HDI is 1.0

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Highest HDI belongs to Norway Highest HDI belongs to Norway at .963at .963

Western Europe and Canada usually Western Europe and Canada usually have very high numbershave very high numbers

Niger the lowest with .281Niger the lowest with .281 Lowest 24 countries all located in Lowest 24 countries all located in

sub-Saharan Africasub-Saharan Africa Data from 2005Data from 2005

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US was 10US was 10thth in 2005 in 2005• Near top in 2 of 4 indicatorsNear top in 2 of 4 indicators

GDP per Capita and literacy rateGDP per Capita and literacy rate

• Lower than many other countries in Lower than many other countries in education and life expectancyeducation and life expectancy

Ed. Because of relatively high drop out rateEd. Because of relatively high drop out rate Life expectancy is lower because of Life expectancy is lower because of

inadequate health care for low-income inadequate health care for low-income peoplepeople

Economic Indicators of Economic Indicators of DevelopmentDevelopment

5 most important5 most important1.1. GDP per capitaGDP per capita

2.2. Economic structureEconomic structure

3.3. Worker productivityWorker productivity

4.4. Access to raw materialsAccess to raw materials

5.5. Availability of consumer goods Availability of consumer goods

GDP Per CapitaGDP Per Capita

Avg. individual in MDCs makes Avg. individual in MDCs makes $15/hr$15/hr

Avg. individual in LDCs $2/hrAvg. individual in LDCs $2/hr Gross Domestic Product (GDP)-Gross Domestic Product (GDP)-

value of the total output of goods value of the total output of goods and services produced in a country in and services produced in a country in one years timeone years time• Divide by pop. to per capitaDivide by pop. to per capita

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About $40,000 in USAbout $40,000 in US MDCs averaged $27,000 in 2005 and MDCs averaged $27,000 in 2005 and

$4,000 in LDCs$4,000 in LDCs Exceeded $60,000 in LuxembourgExceeded $60,000 in Luxembourg

• Less than $1,000 in 15 African nations Less than $1,000 in 15 African nations and three Asian nationsand three Asian nations

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Average GDP has risen in LDCs from Average GDP has risen in LDCs from $800 in 1990 to $4,400 in 2005—$800 in 1990 to $4,400 in 2005—450% increase450% increase

During same period, MDCs increased During same period, MDCs increased only 55%, but increased by $10,000only 55%, but increased by $10,000• Per capita GDP does not accurately Per capita GDP does not accurately

reflect wealth of entire nationreflect wealth of entire nation Ex. 1/8 of US pop. lives in povertyEx. 1/8 of US pop. lives in poverty

Types of JobsTypes of Jobs

3 categories of Jobs3 categories of Jobs1.1. Primary-Primary- directly extracting materials from directly extracting materials from

Earth (agriculture, mining, forestry, and Earth (agriculture, mining, forestry, and fishing)fishing)

2.2. Secondary-Secondary- includes manufacturers at includes manufacturers at process, transform, and assemble raw process, transform, and assemble raw materials into useful productsmaterials into useful products

3.3. Tertiary-Tertiary- involves the provision of goods and involves the provision of goods and services to people in exchange for payment services to people in exchange for payment (retailing, banking, law, education, (retailing, banking, law, education, government)government)

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Distribution of these types of jobs Distribution of these types of jobs varies b/w MDCs and LDCsvaries b/w MDCs and LDCs• Ex. LDCs have more than 60% of pop. Ex. LDCs have more than 60% of pop.

in agriculture—less than 5% in MDCsin agriculture—less than 5% in MDCs Allows people in MDCs to pursue other Allows people in MDCs to pursue other

avenues to increase national wealthavenues to increase national wealth

In MDCs # of jobs in primary and In MDCs # of jobs in primary and secondary sectors has decreased and secondary sectors has decreased and jobs in tertiary sectors has increasedjobs in tertiary sectors has increased

ProductivityProductivity

DefDef.- the value of a particular .- the value of a particular product compared to the amount of product compared to the amount of labor needed to make itlabor needed to make it• Can be measured by the Can be measured by the value addedvalue added

per workerper worker The gross value of the product minus the The gross value of the product minus the

costs of raw materials and energycosts of raw materials and energy About $80,000 in USAbout $80,000 in US Only $1,000 in China -- $500 in IndiaOnly $1,000 in China -- $500 in India

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MDC workers produce more w/ less MDC workers produce more w/ less effort– more access to machines, effort– more access to machines, tools, etc.tools, etc.

LDCs rely more on human and LDCs rely more on human and animal poweranimal power

Raw MaterialsRaw Materials

Needed for developmentNeeded for development US became a powerful industrial US became a powerful industrial

state in 1900s because of wealth of state in 1900s because of wealth of raw materialsraw materials

European countries established European countries established colonies to get raw materialscolonies to get raw materials• Sustained development in Europe, but Sustained development in Europe, but

retarded it in Africa and Asiaretarded it in Africa and Asia

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As specific raw materials become more As specific raw materials become more important, a country’s level of important, a country’s level of development can increasedevelopment can increase• Ex. PetroleumEx. Petroleum

In a global economy the availability of In a global economy the availability of materials and energy measures potential materials and energy measures potential development rather than actual development rather than actual developmentdevelopment• Countries like Japan, Singapore, and Countries like Japan, Singapore, and

Switzerland have developed thru international Switzerland have developed thru international trade even w/o many resourcestrade even w/o many resources

Consumer GoodsConsumer Goods

Wealth of MDCs is used to purchase Wealth of MDCs is used to purchase goods and servicesgoods and services

Transportation and communication Transportation and communication goods are especially important like goods are especially important like Vehicles, telephones, computersVehicles, telephones, computers

Accessible to almost all in MDCs and are Accessible to almost all in MDCs and are vital to economy’s functioning and growthvital to economy’s functioning and growth

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MDCs– more than 500 land lines per MDCs– more than 500 land lines per 1,000 inhabitants, 400 vehicles, 300 1,000 inhabitants, 400 vehicles, 300 internet usersinternet users

LDCs– less than 100 per 1000 LDCs– less than 100 per 1000 inhabitants of eachinhabitants of each• Familiar with goods, but most can’t Familiar with goods, but most can’t

affordafford• Those that have are usually in urban Those that have are usually in urban

areasareas

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Cars, telephones, and computers are Cars, telephones, and computers are also important in social and cultural also important in social and cultural developmentdevelopment• Provides access to leisure activities and Provides access to leisure activities and

exposure to new ideasexposure to new ideas

Social Indicators of DevelopmentSocial Indicators of Development

MDCs use part of wealth to provide MDCs use part of wealth to provide schools, hospitals, and welfare schools, hospitals, and welfare servicesservices• Leads to better education, healthier Leads to better education, healthier

lives, and better protection from lives, and better protection from hardshipshardships

Education and LiteracyEducation and Literacy

The higher the level of development, The higher the level of development, the greater the quantity (avg. # of the greater the quantity (avg. # of years) and quality of education years) and quality of education (student/teacher ratio and literacy (student/teacher ratio and literacy rate)rate)

Avg. student attends 10 years in Avg. student attends 10 years in MDCs and only 2 in LDCsMDCs and only 2 in LDCs

Student/teacher ratio twice as high in Student/teacher ratio twice as high in LDCsLDCs

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MDCs dominate scientific and MDCs dominate scientific and nonfiction publishing worldwide nonfiction publishing worldwide because more of their citizens can because more of their citizens can readread

Many students in LDCs must use Many students in LDCs must use textbooks written in English, French, textbooks written in English, French, German, or RussianGerman, or Russian

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Literacy rate-Literacy rate- the % of a country’s the % of a country’s people who can read and writepeople who can read and write• Exceeds 90% in MDCsExceeds 90% in MDCs• Usually less than 60% in LDCsUsually less than 60% in LDCs

Health and WelfareHealth and Welfare

MDCs spend much more on MDCs spend much more on healthcarehealthcare• More hospitals, doctors, and nurses per More hospitals, doctors, and nurses per

capitacapita Health also influenced by dietHealth also influenced by diet

• MDCs eat more calories and protein MDCs eat more calories and protein daily than they needdaily than they need

• In many LDCs people consume less than In many LDCs people consume less than the daily recommended amountthe daily recommended amount

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In many wealthier countries health In many wealthier countries health care is a public service provided at care is a public service provided at little or no costlittle or no cost• In most European countries the Gov. In most European countries the Gov.

pays 70% or morepays 70% or more• In LDCs private individuals pay more In LDCs private individuals pay more

than half of the costthan half of the cost• US is an exception to this rule—we pay US is an exception to this rule—we pay

for 55% of our own healthcarefor 55% of our own healthcare

Demographic Indicators of Demographic Indicators of DevelopmentDevelopment

MDCs and LDCs can be MDCs and LDCs can be distinguished by 4 demographic distinguished by 4 demographic indicatorsindicators

1.1. Life expectancy (used by HDI)Life expectancy (used by HDI)

2.2. Infant Mortality RateInfant Mortality Rate

3.3. Natural Increase RateNatural Increase Rate

4.4. Crude Birth RateCrude Birth Rate

Life ExpectancyLife Expectancy

Better health and welfare allows Better health and welfare allows people to live longerpeople to live longer

Life expectancy on LDCs is in the Life expectancy on LDCs is in the 60s, in MDCs 70s60s, in MDCs 70s• Differs by genderDiffers by gender• Males live 10 years longer in MDCs, Males live 10 years longer in MDCs,

Females 13 yearsFemales 13 years

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Effects the dependency ratioEffects the dependency ratio• More old people in MDCsMore old people in MDCs• More young in LDCsMore young in LDCs

LDCs have 6 times more people under the LDCs have 6 times more people under the age of 15 than over the age of 65age of 15 than over the age of 65

Infant Mortality RateInfant Mortality Rate

Better health and welfare permits Better health and welfare permits more babies to survivemore babies to survive

In LDCs 94% of infants surviveIn LDCs 94% of infants survive In MDCs 99.5% surviveIn MDCs 99.5% survive In LDCs babies die of malnutrition or In LDCs babies die of malnutrition or

lack of medicinelack of medicine Also may die from poorly educated Also may die from poorly educated

people delivering or caring for infantspeople delivering or caring for infants

Natural Increase RateNatural Increase Rate

Averages 1.5% in LDCsAverages 1.5% in LDCs Only .1% in MDCsOnly .1% in MDCs Puts major strain on LDCs to provide Puts major strain on LDCs to provide

hospitals, schools, jobs, and other hospitals, schools, jobs, and other services that can make people services that can make people healthier and more productivehealthier and more productive

Crude Birth RateCrude Birth Rate

24 per 1000 in LDCs24 per 1000 in LDCs 11 per 1000 in MDCs11 per 1000 in MDCs

• Women choose less children for Women choose less children for economic and social reasons and have economic and social reasons and have access to birth controlaccess to birth control

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Crude Death Rate does not indicate a Crude Death Rate does not indicate a society’s level of developmentsociety’s level of development• Slightly higher in MDCs—Why??????Slightly higher in MDCs—Why??????• Diffusion of medical technology to LDCs Diffusion of medical technology to LDCs

has reduced death from disease and has reduced death from disease and older people have higher mortality ratesolder people have higher mortality rates

Where are LDCs and MDCs Where are LDCs and MDCs Distributed?Distributed?

Countries of the World can be put Countries of the World can be put into 9 major regions according to into 9 major regions according to their level of developmenttheir level of development

Nearly all MDCs are above 30° N Nearly all MDCs are above 30° N latitude, nearly all LDCs are below, latitude, nearly all LDCs are below, known as known as north-south splitnorth-south split

More Developed RegionsMore Developed Regions

3 of the 9 regions are considered 3 of the 9 regions are considered more developed as well as Japan and more developed as well as Japan and the South Pacificthe South Pacific• Anglo-America, Western Europe, Eastern Anglo-America, Western Europe, Eastern

EuropeEurope

Anglo AmericaAnglo America

HDI=.94HDI=.94 90% of residents use English as first 90% of residents use English as first

language and adhere to Christianity language and adhere to Christianity (excluding atheists)(excluding atheists)

Good supply of important raw Good supply of important raw materials needed for manufacturingmaterials needed for manufacturing• Once the World’s major producer of Once the World’s major producer of

steel, automobiles, and other goodssteel, automobiles, and other goods• Still largest consumerStill largest consumer

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Despite loss of manufacturing jobs, Despite loss of manufacturing jobs, has adapted successfully to the has adapted successfully to the global economyglobal economy

Leading provider of financial, Leading provider of financial, management, and high-tech management, and high-tech services, as well as entertainment, services, as well as entertainment, mass media, sports, recreation mass media, sports, recreation equipmentequipment

Most important food exporterMost important food exporter

Western EuropeWestern Europe

HDI=.93HDI=.93 Nearly all speak an Indo-European Nearly all speak an Indo-European

language and adhere to Christianitylanguage and adhere to Christianity• Diversity has still been a longtime Diversity has still been a longtime

source of conflictsource of conflict Since end of WWII, has become more Since end of WWII, has become more

unified politically, militarily, unified politically, militarily, culturally, and economicallyculturally, and economically

continuedcontinued Population growth due mostly to Muslim Population growth due mostly to Muslim

and Hindu immigrants looking for workand Hindu immigrants looking for work If it were not for its peripheral area If it were not for its peripheral area

(southern Italy, Portugal, Spain, and (southern Italy, Portugal, Spain, and Greece) western Europe would be the Greece) western Europe would be the most developed area of the worldmost developed area of the world

Must import food, energy, and minerals to Must import food, energy, and minerals to maintain high level of developmentmaintain high level of development

With the creation of the EU, western With the creation of the EU, western Europe became the world’s largest and Europe became the world’s largest and richest marketrichest market

Eastern EuropeEastern Europe

HDI=.80HDI=.80 Only region where HDI has declined Only region where HDI has declined

since 1990since 1990• Legacy of communist ruleLegacy of communist rule• Read about Gosplan page 303Read about Gosplan page 303• By focusing on basic industry the By focusing on basic industry the

communists neglected consumer goodscommunists neglected consumer goods Cars, appliances, clothingCars, appliances, clothing

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Housing shortages forced entire families to Housing shortages forced entire families to live in apartments the size of dorm roomslive in apartments the size of dorm rooms

Countries that border W. Europe (Czech, Countries that border W. Europe (Czech, Hungary, Poland, Slovakia, Slovenia) have Hungary, Poland, Slovakia, Slovenia) have had more success converting to a global had more success converting to a global economyeconomy

Former Soviet Republics have had a much Former Soviet Republics have had a much harder timeharder time

Russia’s HDI is lower than Libya and Russia’s HDI is lower than Libya and MalaysiaMalaysia

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Most other former Soviet Republics Most other former Soviet Republics are worseare worse• May be a result of lower production, May be a result of lower production,

higher death rates, and other stresses higher death rates, and other stresses associated with the end of communismassociated with the end of communism

JapanJapan

HDI=.94HDI=.94 Remarkable because of the lack of Remarkable because of the lack of

resources compared to populationresources compared to population Must import almost all raw materials Must import almost all raw materials

for manufacturingfor manufacturing Economy originally developed Economy originally developed

because Japan had a large workforce because Japan had a large workforce willing to work for low wageswilling to work for low wages

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Gov. encouraged manufacturers to Gov. encouraged manufacturers to sell products at low cost to gain sell products at low cost to gain foothold in global economyfoothold in global economy

Now Japan sells high-quality, high Now Japan sells high-quality, high value products such as cars, value products such as cars, electronics, and cameraselectronics, and cameras

Put much resources into creating a Put much resources into creating a skilled labor forceskilled labor force

South PacificSouth Pacific

HDI=.87HDI=.87 High HDI but not very central in the High HDI but not very central in the

global economy because of small # global economy because of small # of inhabitants and its peripheral of inhabitants and its peripheral locationlocation

Australia and New Zealand export a Australia and New Zealand export a lot of food-esp. to the UKlot of food-esp. to the UK

Less Developed RegionsLess Developed Regions

6 regions6 regions1.1. Latin AmericaLatin America

2.2. East AsiaEast Asia

3.3. Middle EastMiddle East

4.4. Southeast AsiaSoutheast Asia

5.5. South AsiaSouth Asia

6.6. Sub-Saharan AfricaSub-Saharan Africa

Latin AmericaLatin America HDI= .80HDI= .80 Most speak Spanish or Portuguese and are Most speak Spanish or Portuguese and are

CatholicCatholic More likely to live in urban areas than other More likely to live in urban areas than other

developing areasdeveloping areas Pop. Highly concentrated along the Atlantic CoastPop. Highly concentrated along the Atlantic Coast Regions of Brazil and Argentina are highly Regions of Brazil and Argentina are highly

developed and Mexico benefits from its proximity developed and Mexico benefits from its proximity to the USto the US

Central America and Caribbean Islands are not Central America and Caribbean Islands are not very developed, nor is the interior of SAvery developed, nor is the interior of SA

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Development is hindered by Development is hindered by inequitable income distributioninequitable income distribution• Land is controlled by a few wealthy Land is controlled by a few wealthy

families that rent it out to tenant families that rent it out to tenant farmersfarmers

Grow coffee, tea, and fruits for export rather Grow coffee, tea, and fruits for export rather than food for consumptionthan food for consumption

East AsiaEast Asia

HDI=.76HDI=.76 Economy driven primarily by ChinaEconomy driven primarily by China

• Second largest behind USSecond largest behind US Manufacturing has increased Manufacturing has increased

dramatically in China during 21dramatically in China during 21stst CenturyCentury

Largest world pop. now largest Largest world pop. now largest consumer market for things like consumer market for things like toothpaste, detergent, and shampootoothpaste, detergent, and shampoo

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Low wages make China a huge Low wages make China a huge exporting countryexporting country• 2/3 of DVD players, microwaves, 2/3 of DVD players, microwaves,

photocopiers, and shoesphotocopiers, and shoes Partners with Wal-Mart to drive down Partners with Wal-Mart to drive down

prices of consumer goods around the prices of consumer goods around the worldworld• But also driving down factory pay But also driving down factory pay

around the worldaround the world

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Rapid development in Rapid development in China has led to China has led to regional economic regional economic inequalitiesinequalities

East coast provinces East coast provinces are much better offare much better off

B/W Shanghai and B/W Shanghai and Beijing live ¼ pop., Beijing live ¼ pop., that generates ½ of that generates ½ of GDP, and attracts ¾ of GDP, and attracts ¾ of foreign investmentforeign investment

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Weaknesses in economy include Weaknesses in economy include weak middle management, low weak middle management, low quality control, primitive banking, quality control, primitive banking, and inadequate legal protectionand inadequate legal protection

Development is straining resourcesDevelopment is straining resources• Now largest consumer of steel, copper, Now largest consumer of steel, copper,

coal, and cement and the second largest coal, and cement and the second largest consumer of petroleum behind the USconsumer of petroleum behind the US

Producing a lot of pollution tooProducing a lot of pollution too

Middle EastMiddle East

HDI= .68HDI= .68 A lot of desert that can support only A lot of desert that can support only

minimal plant or animal lifeminimal plant or animal life Must import most productsMust import most products Major economic asset is petroleumMajor economic asset is petroleum Only major world region with a trade Only major world region with a trade

surplussurplus

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Some countries have Some countries have used petro. money to used petro. money to finance developmentfinance development

Not every country in Not every country in middle east has middle east has petroleumpetroleum• Most concentrated in Most concentrated in

states that border the states that border the Persian GulfPersian Gulf

• Egypt, Syria, Jordan, Egypt, Syria, Jordan, etc. do not have muchetc. do not have much

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Tensions arise in region b/w Tensions arise in region b/w countries with large reserves and countries with large reserves and those withoutthose without

Challenge for most states is to Challenge for most states is to promote development without promote development without abandoning traditional Islamic valuesabandoning traditional Islamic values

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Many countries restrict the role of Many countries restrict the role of women in businesswomen in business• Low level of literacy among women is Low level of literacy among women is

reason why HDI is low compared to the reason why HDI is low compared to the amount of wealth in the regionamount of wealth in the region

• Other reasons include lack of political Other reasons include lack of political freedom and low educationfreedom and low education

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Region also suffers from serious Region also suffers from serious internal cultural disputesinternal cultural disputes

Countries dominated by Shiites Countries dominated by Shiites promote revolutions in the region to promote revolutions in the region to counteract Western development counteract Western development and social customsand social customs

Most states also don’t acknowledge Most states also don’t acknowledge the existence of Israelthe existence of Israel

Southeast AsiaSoutheast Asia

HDI=.58HDI=.58 Most populous countries are Indonesia, Most populous countries are Indonesia,

Vietnam, Thailand, and the PhilippinesVietnam, Thailand, and the Philippines Region has suffered from warfareRegion has suffered from warfare Climate limits intensive cultivation of most Climate limits intensive cultivation of most

grainsgrains Development also limited by mountain Development also limited by mountain

ranges, volcanoes, and typhoonsranges, volcanoes, and typhoons

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Produces large amount of palm and Produces large amount of palm and coconut oil, natural rubber, kapok coconut oil, natural rubber, kapok (used for insulation and filling) and (used for insulation and filling) and abaca (used in fabrics and ropes)abaca (used in fabrics and ropes)

Also large supply of tin and some Also large supply of tin and some petroleum reservespetroleum reserves

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Development has been rapid in some Development has been rapid in some areasareas• Thailand, Singapore, Malaysia, and the Thailand, Singapore, Malaysia, and the

PhilippinesPhilippines• Textile and clothing manufacturingTextile and clothing manufacturing

Cheap laborCheap labor

• However, economic growth has slowed However, economic growth has slowed over the last decadeover the last decade

South AsiaSouth Asia

HDI= .58HDI= .58 Includes India, Pakistan, Bangladesh, Includes India, Pakistan, Bangladesh,

Sri Lanka, Nepal, and BhutanSri Lanka, Nepal, and Bhutan Region has second largest population Region has second largest population

and second lowest per capita incomeand second lowest per capita income India is the World’s leading producer India is the World’s leading producer

of Jute (used to make burlap and of Jute (used to make burlap and twine), peanuts, sugarcane, and teatwine), peanuts, sugarcane, and tea

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India also has mineral reserves of India also has mineral reserves of uranium, bauxite, coal, manganese, uranium, bauxite, coal, manganese, iron ore, and chromiteiron ore, and chromite• But population is so large the ratio with But population is so large the ratio with

resources is lowresources is low India is also one of the leading India is also one of the leading

producers of rice and wheatproducers of rice and wheat

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India benefited greatly from the “India benefited greatly from the “Green Green RevolutionRevolution””• A series of inventions that greatly increased A series of inventions that greatly increased

agricultural productivityagricultural productivity Created “miracle” rice and wheat seedsCreated “miracle” rice and wheat seeds

Climate has also affected developmentClimate has also affected development• Almost all rain falls in the monsoon season Almost all rain falls in the monsoon season

between May and Augustbetween May and August• A couple of dry seasons in a row leads to major A couple of dry seasons in a row leads to major

food shortagesfood shortages

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India has become the 4India has become the 4thth largest largest economy behind the US, China, and economy behind the US, China, and JapanJapan• Rate of growth is second only to ChinaRate of growth is second only to China• India has become a major service India has become a major service

providerprovider

Sub-Saharan AfricaSub-Saharan Africa

HDI= .51HDI= .51 Has a number of assetsHas a number of assets

• Low pop. Density (compared to other LDC Low pop. Density (compared to other LDC regions)regions)

• South Africa has mineral deposits such as South Africa has mineral deposits such as chromium, diamonds, manganese, and chromium, diamonds, manganese, and platinumplatinum

• Others include bauxite in Guinea, cobalt in the Others include bauxite in Guinea, cobalt in the Dem. Rep. of Congo and Zambia, petroleum in Dem. Rep. of Congo and Zambia, petroleum in Nigeria and Uranium in NigerNigeria and Uranium in Niger

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Despite assets, this region has Despite assets, this region has world’s highest % living in povertyworld’s highest % living in poverty• Poor health and lack of education also a Poor health and lack of education also a

problemproblem Conditions have gotten worse in recent Conditions have gotten worse in recent

yearsyears Much can be blamed on European Much can be blamed on European

colonizationcolonization• Landlocked states, lack of infrastructure, Landlocked states, lack of infrastructure,

etc. etc.

continuedcontinued Political problems are Political problems are

also problematicalso problematic• States were created States were created

with no regard to with no regard to ethnicitiesethnicities

• After independence, After independence, many leaders sought many leaders sought personal gain and local personal gain and local wars rather than wars rather than development for the development for the countrycountry

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Basic problem in sub-Saharan Africa Basic problem in sub-Saharan Africa is the imbalance between # of is the imbalance between # of people and the capacity of the land people and the capacity of the land to feed the populationto feed the population• Remember-- has the highest NIRRemember-- has the highest NIR

Gender-Related Development Gender-Related Development Index (GDI)Index (GDI)

DefDef.- measure created by the UN to .- measure created by the UN to compare the level of development of compare the level of development of women with that of both sexeswomen with that of both sexes

Uses same 4 indicators as HDIUses same 4 indicators as HDI Penalizes a country for having a Penalizes a country for having a

large disparity b/w well-being of men large disparity b/w well-being of men and womenand women

Highest possible GDI is 1.0Highest possible GDI is 1.0

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No country has a GDI as high as its No country has a GDI as high as its HDIHDI• Because nowhere are women given the Because nowhere are women given the

same opportunities as mensame opportunities as men Norway highest -- .96Norway highest -- .96 Western Europe and North America Western Europe and North America

are also highare also high Sub-Saharan Africa is the lowestSub-Saharan Africa is the lowest

Economic Indicator of Gender Economic Indicator of Gender DifferencesDifferences

UN estimates average incomes of UN estimates average incomes of males and females in each countrymales and females in each country

Lower for women in every countryLower for women in every country Est. for US in 2003Est. for US in 2003

• Men= $46,456Men= $46,456• Women= $29,017Women= $29,017

In MDCs, women avg. 2/3 income of In MDCs, women avg. 2/3 income of men—difference of $12,000men—difference of $12,000

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In LDCs the dollar amount is lower, but In LDCs the dollar amount is lower, but the % difference is much higherthe % difference is much higher

Social Indicators of Gender Social Indicators of Gender DifferencesDifferences

Women are less likely to attend Women are less likely to attend school in LDCs—esp. at the school in LDCs—esp. at the secondary levelsecondary level

In MDCs there are 99 women to In MDCs there are 99 women to every 100 males in high schoolevery 100 males in high school• Only 60 per 100 in LDCsOnly 60 per 100 in LDCs• Big measure of gender disparity in the Big measure of gender disparity in the

Middle East and sub-Saharan AfricaMiddle East and sub-Saharan Africa Less than 1/3Less than 1/3

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Countries can divided into three Countries can divided into three groups in terms of literacygroups in terms of literacy

Universal Literacy in MDCsUniversal Literacy in MDCs Similar literacy rates for both in Latin Similar literacy rates for both in Latin

America and AsiaAmerica and Asia Substantially lower literacy for Substantially lower literacy for

women in the Middle East and sub-women in the Middle East and sub-Saharan AfricaSaharan Africa

Demographic Indicators of Demographic Indicators of DevelopmentDevelopment

For life expectancy the gender For life expectancy the gender disparity is much greater in MDCsdisparity is much greater in MDCs• Women live on average 6 years longerWomen live on average 6 years longer• In LDCs it is only 1 to 2 years because In LDCs it is only 1 to 2 years because

so many women die during child birthso many women die during child birth

Since 1970, the status of women has Since 1970, the status of women has been improvingbeen improving• Reduced by 2/3 in LDCs and ¼ in MDCsReduced by 2/3 in LDCs and ¼ in MDCs

Gender EmpowermentGender Empowerment

Gender Empowerment Measure-Gender Empowerment Measure- measure created b the UN that measure created b the UN that compares the ability of women and compares the ability of women and men to participate in economic and men to participate in economic and political decision makingpolitical decision making

In every country men hold more In every country men hold more positions of economic and political positions of economic and political powerpower

continuecontinue

GEM is calculated by combining tow GEM is calculated by combining tow indicators of economic power (income and indicators of economic power (income and professional jobs) and two indicators of professional jobs) and two indicators of political power (managerial jobs and political power (managerial jobs and elected jobs)elected jobs)

Highest possible score is 1.0Highest possible score is 1.0 North America, Northern Europe, and the North America, Northern Europe, and the

South Pacific have the highest scoresSouth Pacific have the highest scores• Lack of data for most LDCsLack of data for most LDCs

Economic Indicators of Economic Indicators of EmpowermentEmpowerment

Highest % of women in professional Highest % of women in professional and technical jobs are in Northern and technical jobs are in Northern Europe and then North AmericaEurope and then North America• More than half are womenMore than half are women

Political Indicators of DevelopmentPolitical Indicators of Development

# of managerial jobs held by women is # of managerial jobs held by women is higher in MDCshigher in MDCs• Highest in NA, Northern Europe, and South Highest in NA, Northern Europe, and South

PacificPacific More than 1/3 held by womenMore than 1/3 held by women

% of women elected to public office is % of women elected to public office is highest in Northern Europehighest in Northern Europe• 1/3 of national parliaments1/3 of national parliaments• In most MDCs 1/5 are womenIn most MDCs 1/5 are women• Only 15% in the USOnly 15% in the US

GEM is lower than GDI in every countryGEM is lower than GDI in every country Means women posses a greater share of a Means women posses a greater share of a

country’s resources than they do power country’s resources than they do power over allocation of resourcesover allocation of resources

Obstacles to DevelopmentObstacles to Development

1/5 of world’s people living in MDCs 1/5 of world’s people living in MDCs consume 5/6 of the world’s goodsconsume 5/6 of the world’s goods

The people of Africa consume only The people of Africa consume only 1% of the world’s goods1% of the world’s goods

To reduce this disparity LDCs need to To reduce this disparity LDCs need to develop rapidlydevelop rapidly

continuedcontinued

LDCs face two fundamental LDCs face two fundamental obstacles in trying to encourage obstacles in trying to encourage developmentdevelopment

1.1. Adopting policies that successfully Adopting policies that successfully promote developmentpromote development

2.2. Finding funds to pay for itFinding funds to pay for it

continuedcontinued

LDCs use one of two models to LDCs use one of two models to promote developmentpromote development

1.1. Self-sufficiencySelf-sufficiency

2.2. International tradeInternational trade Each has important advantages and Each has important advantages and

serious problemsserious problems

Development Through Self-Development Through Self-SufficiencySufficiency

AKA balanced growthAKA balanced growth Says countries should spread Says countries should spread

development evenly across all development evenly across all possible sectors of its economy and possible sectors of its economy and in all regionsin all regions• Everyone benefits- cities and rural areasEveryone benefits- cities and rural areas• Reducing poverty takes precedenceReducing poverty takes precedence• Helps business development by Helps business development by

eliminating foreign competitioneliminating foreign competition

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Sets barriers to limit amount of Sets barriers to limit amount of foreign goodsforeign goods• Import tariffs, quotas, and import Import tariffs, quotas, and import

licenseslicenses Also limits exportsAlso limits exports

Problems with Self-SufficiencyProblems with Self-Sufficiency

1.1. InefficiencyInefficiency Protects inefficient industries thru limited Protects inefficient industries thru limited

competitioncompetition

2.2. Large BureaucracyLarge Bureaucracy Needed to administer controlsNeeded to administer controls Encourages abuse and corruptionEncourages abuse and corruption

Development Through International Development Through International TradeTrade

Calls for a country to identify its Calls for a country to identify its distinctive economic assetsdistinctive economic assets• Comparative advantageComparative advantage• Sell what you make best or cheapest to Sell what you make best or cheapest to

the rest of the world to finance the rest of the world to finance developmentdevelopment

Rostow’s Development ModelRostow’s Development Model

Pioneer of international trade Pioneer of international trade approachapproach

Developed a 5-stage model of Developed a 5-stage model of development during the 1950sdevelopment during the 1950s

1. The Traditional Society1. The Traditional Society

Country where development has not Country where development has not begunbegun• High % farmersHigh % farmers• High % national wealth into High % national wealth into

“nonproductive” activities – military, “nonproductive” activities – military, religionreligion

2. The Preconditions for Takeoff2. The Preconditions for Takeoff

An elite group of well-educated An elite group of well-educated leaders begins to invest in leaders begins to invest in infrastructureinfrastructure• Ultimately stimulates later developmentUltimately stimulates later development

3. The Takeoff3. The Takeoff

Rapid growth occurs in a limited # of Rapid growth occurs in a limited # of economic activitieseconomic activities

Become productive in these areas, but Become productive in these areas, but economy still remains dominated in economy still remains dominated in traditional practicestraditional practices

4. The Drive to Maturity4. The Drive to Maturity

Modern technology diffuses to a Modern technology diffuses to a wider variety of industrieswider variety of industries

Causing rapid growthCausing rapid growth Workers become skilled and specializedWorkers become skilled and specialized

5. The Age of Mass Consumption5. The Age of Mass Consumption

Economy shifts from heavy industry Economy shifts from heavy industry to consumer goodsto consumer goods

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The international trade model says The international trade model says every country is in one of these every country is in one of these stagesstages

MDCs in 4 or 5MDCs in 4 or 5 LDCs in 1, 2, or 3LDCs in 1, 2, or 3

Concentration on international trade Concentration on international trade benefits from consumers in other benefits from consumers in other countriescountries

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To remain competitive industries To remain competitive industries must keep up with modern must keep up with modern technology and changes in consumer technology and changes in consumer tastestastes

Examples of the International Trade Examples of the International Trade ApproachApproach

The Four Asian Dragons (sometimes The Four Asian Dragons (sometimes Tigers)Tigers)• South Korea, Singapore, Taiwan, and South Korea, Singapore, Taiwan, and

Hong KongHong Kong Areas that lack natural resources but Areas that lack natural resources but

promoted development by concentrating on promoted development by concentrating on producing a limited # of manufactures producing a limited # of manufactures goodsgoods

• Esp. clothing and electronicsEsp. clothing and electronics Very low labor costsVery low labor costs

ContinuedContinued

Petroleum-rich Arabian Peninsula Petroleum-rich Arabian Peninsula StatesStates• Saudi Arabia, Kuwait, Bahrain, Oman, Saudi Arabia, Kuwait, Bahrain, Oman,

and the UAEand the UAE• Among the World’s least developed Among the World’s least developed

nations until 1970s when oil prices nations until 1970s when oil prices skyrocketedskyrocketed

Used $ from petroleum to finance Used $ from petroleum to finance developmentdevelopment

Highways, airports, universities, and Highways, airports, universities, and telecommunicationstelecommunications

Problems With the International Problems With the International Trade ApproachTrade Approach

1.1. Uneven Resource DistributionUneven Resource Distribution• Arabian countries lucky the price of oil rose Arabian countries lucky the price of oil rose

so rapidlyso rapidly The price of most natural resources have notThe price of most natural resources have not

2.2. Market StagnationMarket Stagnation• World market for consumer goods has World market for consumer goods has

become stagnantbecome stagnant Meaning LDCs not must hope to steal markets for Meaning LDCs not must hope to steal markets for

low-cost manufactured goods from competitorslow-cost manufactured goods from competitors

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3.3. Increased Dependence on MDCsIncreased Dependence on MDCs• Building up takeoff industries to sell in Building up takeoff industries to sell in

MDCs might force LDCs to cut back MDCs might force LDCs to cut back production of products their own production of products their own people needpeople need

Meaning funds from the sell of their own Meaning funds from the sell of their own products might have to be used to products might have to be used to necessities from MDCs rather than finance necessities from MDCs rather than finance further developmentfurther development

Triumph of International TradeTriumph of International Trade

Most countries adhering to self-Most countries adhering to self-sufficiency changed to international sufficiency changed to international trade in the 1990strade in the 1990s• World Bank say per capita GDP has World Bank say per capita GDP has

increased in more than 4% annually in increased in more than 4% annually in countries following international tradecountries following international trade

Less than 1% under self-sufficiencyLess than 1% under self-sufficiency

World Trade Organization (WTO)World Trade Organization (WTO)

Created in 1995 to reduce barriers Created in 1995 to reduce barriers to international trade to international trade

2 methods2 methods

1.1. Negotiation of reduction or Negotiation of reduction or elimination of international trade elimination of international trade restrictions on manufactured goodsrestrictions on manufactured goods

2.2. Enforces trade agreementsEnforces trade agreements• Includes copyrights and patentsIncludes copyrights and patents

Transnational CorporationsTransnational Corporations

International trade requires corporations International trade requires corporations to invest in other countriesto invest in other countries

Foreign direct investment (FDI)-Foreign direct investment (FDI)- investment made by a foreign company in investment made by a foreign company in the economy of another countrythe economy of another country• Doesn’t flow equally around the worldDoesn’t flow equally around the world• Only 1/3 went form MDC to LDC in 2004Only 1/3 went form MDC to LDC in 2004• 2/3 went from MDC to another MDC2/3 went from MDC to another MDC

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FDI not evenly distributed to all LDCsFDI not evenly distributed to all LDCs• Almost have of all FDI in 2004 went to Almost have of all FDI in 2004 went to

ChinaChina• 25% to rest of Asia, 25% to Latin 25% to rest of Asia, 25% to Latin

America, less than 10% to Africa America, less than 10% to Africa Transnational corporationsTransnational corporations are are

the major source of FDIthe major source of FDI A corporation that invests and operates in A corporation that invests and operates in

countries other than the one its countries other than the one its headquarters are locatedheadquarters are located

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¼ of TNCs are located in the US¼ of TNCs are located in the US 2/3 in Western Europe2/3 in Western Europe

• Esp. France, Germany, and the UKEsp. France, Germany, and the UK

Financing DevelopmentFinancing Development

LDCs get money to finance LDCs get money to finance development from 2 primary development from 2 primary sourcessources

1.1. Loans from banks and international Loans from banks and international organizationsorganizations

2.2. Direct investment from TNCsDirect investment from TNCs

LoansLoans

LDCs borrow money for LDCs borrow money for infrastructure improvementsinfrastructure improvements

Two major lenders are the Two major lenders are the International Monetary Fund (IMF) International Monetary Fund (IMF) and the World Bankand the World Bank• Created by UN in 1945Created by UN in 1945