Development Measurements

1. ECONOMIC MEASUREMENTS OF DEVELOPMENT

a. Gross Domestic Product (GDP): The total value of goods and services produced by a country per year

b. Gross National Product (GNP) (or Gross National Income -- GNI): The total value of goods and services produced by a country per year plus net income earned abroad by it nationals

c. Purchasing Power Parity (PPP): Takes into account what money actually buys in each country (relative price levels) so GDP/GNP is more accurate

d. Per Capita GDP/GNP 1)GDP/GNP divided by population of country 2)More accurate gauge of the poverty level of a country

e. Informal Economy: Economic activity not subject to formal control or payment, operating without official recognition, and not measured by official statistics 1) In many poor countries, the informal economy can be up to half of the official GDP

2) Why: Avoid taxes, illegal businesses, illegal workers, lack of economic structure

f. Poverty: 48% of the world’s population lives on ≤ $2 per day (the average American lives on ≈ $100/day)

1) 73% of South Asia’s population

2) 63% of sub-Saharan Africa’s population

3) 42% of Southeast Asia’s population

4) 36% of East Asia’s population

5) 13% of Latin Americas population

2. NON-ECONOMIC MEASUREMENTS

a. Human Development Index (HDI): Formula created by the UN based on income and deprivation in three essential dimensions of human life: life expectancy, education, and living standards

b. Size of Agricultural Sector 1) A high percentage of the population engaged in agriculture => low industrialization and GDP, limited economic development, underdevelopment, subsistence farming

2) Landlessness a) An imbalance between the size of the agricultural labor force and availability of individual farms due to overpopulation, lack of arable land, large estates (India, Latin America) b) Landless peasants are the most disadvantaged segment of the poorest countries

c. Calorie Intake per Capita 1)Globally, 23% of children ≤ 5 are undernourished (41% in South Asia and 26% in Africa) 2)Average daily calorie consumption in 2008: MDCs = 3,430; LDCs = 2,120

d. Technology: The integrated system of knowledge, skills, tools, and methods developed within or used by a culture to successfully carry out purposeful and productive tasks

1) Cultural hearths were centers of technology, innovation, and invention in history => modern day technological hearths are the highly urbanized, industrialized, advanced nations

2) Technology gap: The contrast in technology used at the core and that known or employed at the periphery (this gap has widened over time)

3) Cultural convergence a)The increasing similarity in technologies and way of life among societies at the same levels of development b)Because of the technology gap, cultural diffusion happens much faster from MDCs to LDCs than technological diffusion

MDCs Cultural Diffusion Technological Diffusion MDCs LDCs Gap

4) Technology transfer: The diffusion of the technology possessed by MDCs to LDCs a) A major goal of LDCs because technology is a necessity for developing into an MDC b) Critical for developing nations as carrying capacity is met

c) Some technology transfers are easy (computers, cell phones, IT systems) …

… and others hard (medical technology, materials innovations, new energy sources)

e. Education 1)A literate, educated labor force is essential for economic growth 2)Vicious cycle: poor nations can’t afford schools, supplies, teachers => low literacy rates => nation continues to get further behind 3)Poverty also means that children are put to work as soon as possible

Global Literacy Rates

f. Public Services: Safe drinking water and sanitation systems

(2.5 billion people live without basic sanitation

Every 20 seconds, a child dies as a result of poor sanitation)

g. Health: Access to medical facilities and personnel 1)UN estimates that 90% of the 11 million infant and child deaths annually in poor countries are preventable 2)10% of the world’s population suffer from infectious diseases that are becoming more and more drug-resistant

h. Gender Empowerment 1) Gender-Related Development Index (GDI): compares the level of development of women with that of men 2) Sub-Saharan Africa and Middle East rank the lowest in gender empowerment