SSR2014: Basic concepts and issues in development LECTURE 3: Challenges in the Third World

Objectives To identify the common characteristics in TWCs. To compare Modernization Theory & Dependency Theory in relation to Third World. To discuss underdevelopment – economic, social and political underdevelopment.

In your opinion, what are the characteristics of TWCs or LDCs? Discuss… In your opinion, what are the characteristics of TWCs or LDCs?

Some characteristics Poverty High birth rates Low life expectancy Economic dependence on advanced countries Low level of technologies

Third World Synonymous with underdeveloped, less developed, less industrialized, developing, postcolonial and periphery. These terms often used interchangeably. By definition: countries not included in First and Second World, so a range of countries was included as Third World. Countries with lots of differences – economically, politically, geographically, histories, cultures, climates

Characteristics of Third World Urban primacy Distorted & highly dependent economies Overurbanization Growth of informal sectors Common political background Traditional, rural social structures Widespread poverty

Decolonization Refers to the achievement of independence by the various Western colonies & protectorates in Asia & Africa following WW2. Psychology of decolonization - Social relationships of colonial societies denied the native population a true human identity.

UN’s definition of LDCs The least developed countries (LDCs) are a group of countries that have been identified by the UN as "least developed". United Nations used the following three criteria for the identification of the LDCs: 1. a low-income estimate of the gross national income (GNI) per capita. 2. Weak human assets 3. High degree of economic vulnerability

There are 50 countries listed in the United Nations comparative analysis of poverty: 34 African countries, 10 Asian countries, 5 Pacific Island Nations and one Caribbean nation.

Third World Countries – HUMAN DEVELOPMENT INDEX (HDI) A long and healthy life - as measured by life expectancy at birth. Knowledge as measured by the adult literacy rate (with two-thirds weight) and the combined primary, secondary and tertiary gross enrolment ratio (with one-third weight). A decent standard of living as measured by GNI per capita* (PPP US$). 20 countries with the lowest HDI index are mostly sub-Saharan African countries (Senegal, Mali, Ethiopia etc). Malaysia in 2014 – 0.779, ranked 62/188 (obtained from Human Development Report, 2015). Ahead of Thailand (0.726, ranked 93), Indonesia (0.684, ranked 110) & the Philippines (0.668, ranked 115) but below Singapore (0.912, ranked 11).

Third World Countries in terms of their Gross National Income (GNI) Countries with the least gross national income based on purchasing-power-parity (PPP) per capita in int'l Dollars. Simplified the GNI PPP is the average annual income earned by a citizen of a country. In 1986 – GNI PPP for 20 rich capitalist countries = AS$12,600. In African region, GNI PPP for the same year is only AS$270. Malaysia (2014) – AS$22, 762, higher than Thailand (AS$ 13,323), Indonesia (AS$9,788) & the Philippines (AS$ 7,915)

TWCs Commonalities All of them suffer from some aspects underdevelopment (to a certain extent): Economic underdevelopment Inequality in income/ wealth distribution Low per capita income Social underdevelopment Poverty affecting social conditions & human development HDI (life expectancy, low education level). Political underdevelopment Political instability, authoritarian government etc, no access to political process/ no access to participation in decision making of govt policies etc.

UNDERDEVELOPMENT (SOCIAL ) Underdevelopment – refers to a situation in which resources are being actively used, but used in a way which benefits dominant states & not the poorer states in which the resources are found.

Causes of Underdevelopment In order to understand the cause, need to look back at the definition of socioeconomic and political underdevelopment. Because of personal cultural backgrounds or ideologies? Modernization Theory and Dependency Theory?

Modernization Theory & Cultural Values Argued that most Third World Countries could & should follow the path to modernization – similar to the Western nations’s progress to modernization. Rostow Theory – “5 stages of Economic Development’ – transition from traditional society  modern industrialized society. What is meant by “Modern”? Traditional Values vs. Modern Values Cultural influences?

Early Modernization Theory: Critics Earlier version was criticized for being too optimistic and simplistic. In reality: process of social and economic modernization often associated with political instability & conflicts. Also: economic growth doesn’t guarantee democracy or other elements of political developments.

Dependency Theory: contd Challenge the most fundamental assumptions of Modernization Theory: Third World Countries cannot take the same path as Western nations to modernization Doesn’t agree with the view that Western influence in the Third World as beneficial Economic dependence has caused the LDCs’ political dependency Early Dependency Theory was criticised as too pessimistic about the likelihood of economic & political development

Third World & Development Role of IMF, World Bank etc in the development in Third World Effects and consequences? Traditional values/ cultures – how do they hinder/ promote development in the Third World?

What the IMF (International Monetary Fund) Does? The work of the IMF is of three main types. Surveillance involves the monitoring of economic and financial developments, and the provision of policy advice, aimed especially at crisis-prevention. The IMF also lends to countries with balance of payments difficulties, to provide temporary financing and to support policies aimed at correcting the underlying problems; loans to low-income countries are also aimed especially at poverty reduction. Third, the IMF provides countries with technical assistance and training in its areas of expertise. Supporting all three of these activities is IMF work in economic research and statistics.

Malaysia’s economic performance in 2014? Household income INCREASES. GNI percapita = USD$ 10,830. (Median = Rm5900). GNI for High Income Nation = USD 15,000. Malaysia’s Debt: 86.8% from GDP = RM 854.3 billion) > 55% debt ceiling. Whereas: Thailand, South Korea & Indonesia = < 33%

Future of Third World? What will the future hold for the third world countries? Will urban growth continue at the same fast pace seen in the recent decades? Will inequality and poverty remain at the same high levels? Will there be a convergence between Third and First world?

Current Development Issues: Challenges World Poverty. Culture, Beliefs & lifestyles. Balance – environment, population growth & industries. Poverty reduction/ eradication. Equality

References: Handelman – Chapter 1 Dorraj, M. 1995. The Changing Political Economy of the Third World Hout, W. 1993. Capitalism & the Third World: development, dependence & the world system. Monshipouri, M. 1995. Democratization, liberalisation & Human Rights in Third World Kleniewski, N. 2006. Cities, Change & Conflict. – Read Chapter 7: Cities in the Third World