 Concepts of Development

A. Describing development 1. world is divided between relatively rich & poor countries 2. Names for these countries:  Outdated names: 1 st, 2 nd, 3 rd, or 4th World  Today: Developed---Developing---Underdeveloped  Or: MDC---NIC---LDC  Geographic description: Global North/Global South

B. Measuring Development “Economic indicators”:  GDP (gross domestic product): total value of all goods produced GDP  GNI per capita GNI per capita  Purchasing Power Parity

Measuring Development: Social Indicators  Literacy Rates  Infant mortality Infant mortality  Caloric Intake/Food Security Caloric Intake/Food Security  Mobile cellular subscribers/Internet users Mobile cellular subscribersInternet users

Human Development Index  Combined development indicators:  Social  Economic  Demographic  Life expectancy at birth + mean years of schooling + expected years of schooling + GNI per capita

1. lower levels of living & productivity

Fertility Rate

…but rapid rural-to-urban migration

1. Despite resources, sub-Saharan Africa severely lacks development 1. legacy of the colonial era  Mining companies  Lack of Political institutions  Ethnic problems 3. Biggest problem: imbalance between number of people & the food supply

1. 5 stages of economic development 2. American economist 3. Developed model in s (geopolitical context?) 4. Studied 15 European countries 5. Believed ALL countries have the ability to break the cycle of poverty

1. Industrialization increases…more secondary jobs 2. Growth concentrated in a few regions of the country… in one or two industries 3. New political & social institutions evolve 4. Infrastructural development (airports, roads & railways)

1. Technological innovation 2. Economic development spreads 3. Increase types of industry 4. Continued rapid urbanization

1. Rapid expansion of tertiary industries 2. Industry shifts to production of consumer goods

1. Outdated and oversimplified (take your pill and blast off…) 2. Assumes all countries have same level of resources, population, climate 3. Ignores “foreign aid” & “development loans” 4. Underestimates effects of colonization & imperialism

 Comparing Rostow’s Model to the DTM Model

1. Create economic “self-sufficiency” 2. Development through “international trade”  Ex: Rostow’s model 3.Financing development  Ex: FDI (foreign direct investment)  loans

 development calls for a country to use its comparative advantage to trade its scarce resources Exs:  Oil-rich regions (Persian Gulf, Russia, Mexico)  E. & S.E. Asia?  Problem of dependency?

 Embraced by most countries for stimulating development  Countries converted from “self-sufficiency” to “international trade” during the 1990s  Past 25 years world trade has tripled Exs: India’s GDP: 7% per year during 1990s China: 10% growth per year

World Trade Organization (WTO)  Established in 1995  Works to reduce barriers to international trade  Enforces trade agreements

 LDCs borrow money to build new infrastructure  2 major international lenders are: World Bank & IMF  Foreign Direct Investment  Microcredit loans to small businesses & women

Many developing countries have accumulated large debts relative to their GDPs. Much of their budgets now must be used to finance their debt.

3/4ths of foreign investment flows from one MDC to another…

1. Global Partnerships 2. Conservation 3. Renewable resources 4. Women Empowerment