Chapter 9 Development

United Nations Development Program

HDI Human Development Index Established by the UN Recognizes a country and it’s level of development Distinguished by 3 factors: Economic (GDP) Social (literacy rate and amount of education) Demographic (life expectancy)

Indicators of Development Economic indicators of development Gross domestic product per capita Worker productivity and types of jobs Access to raw materials Availability of consumer goods Social indicators of development Education and literacy Health and welfare Demographic indicators of development Life expectancy – Infant mortality rate Natural increase rate – Crude birth rate

More & Less Developed Regions More developed regions Anglo-America – Western Europe Eastern Europe – Japan South Pacific Less developed regions Latin America – East Asia Southeast Asia – Middle East South Asia – Sub-Saharan Africa

Earning a Living Jobs fall into 3 categories: Primary (take things/products directly from the Earth…farming, mining, fishing, forestry) Secondary (transforming, processing, assembling raw materials into products…manufacturing) Tertiary (products and services provided for payment…retailing, banking, law, education, government)

Primary Activities Direct removal of natural resources such as mining, forestry, and agriculture -most important in the LDCs. Subsistence Agriculture Fishing and Forestry Mining and Quarrying

Primary Products The percentage of people working in agriculture exceeds 75% in many LDCs of Africa and Asia. In Anglo-America and Western Europe the figure is <5%

Trade in Primary Products Importance to Developing Economies Danger of Commodity Trade Dependence Puerto Rico Coffee Plantation

Secondary Activities: Manufacturing Secondary - Processing and transforming natural resources: steel, textiles, auto assembly. These used to be most important in MDCs, but increasingly important in the semi-periphery (Korea, Mexico, Brazil, Singapore)

Tertiary and Beyond: Services Provision of services in exchange for payment. Includes retailing, banking, law, education, and government. Education and information technology becoming most important in the postindustrial core regions. Less-developed countries often focus on tourism. Services historically were clustered into settlements. Increasingly the most important service centers are massive world cities.

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

Strategies for International Development Self-Sufficiency Model Mexico India International Trade Model (Economic Growth) Rostow’s Model World Bank lending Basic Needs Model/Appropriate Technology Model Microlending (Grameen Bank, Kiva.org) Revolutionary/Radical Reform Model Cuba, U.S.S.R

Institutions of International Development United Nations - formed in 1945 to promote peace. 189 current members. World Bank - financial assistance and loans. Owned by 189 United Nations members. International Monetary Fund - arm of U.N. that surveys and oversees international money exchange to prevent monetary crises. Also provides loans and training to help countries with balance of payment problems. Non-Governmental Organizations (NGOs) - World Watch, Human Rights Watch, World Commission on Dams, Grameen Bank, Kiva.org, many others.

Rostow - Stages of Growth The work of American Walt W. Rostow Rostow is an economic historian Countries can be placed in one of five categories in terms of its stage of growth: A child in Sierra Leone making breakfast. Which stage would a country like Sierra Leone fit in? Copyright: Dave Dyett, http://www.sxc.hu/

Rostow - Stages of Growth Traditional Society Characterised by subsistence economy – output not traded or recorded existence of barter high levels of agriculture and labour intensive agriculture Village in Lesotho. 86% of the resident workforce in Lesotho is engaged in subsistence agriculture. Copyright: Tracy Wade, http://www.sxc.hu/

Rostow - Stages of Growth 2. Pre-conditions: Development of mining industries Increase in capital use in agriculture Necessity of external funding Some growth in savings and investment The use of some capital equipment can help increase productivity and generate small surpluses which can be traded. Copyright: Tim & Annette, http://www.sxc.hu

Rostow - Stages of Growth 3. Take off: Increasing industrialisation Further growth in savings and investment Some regional growth Number employed in agriculture declines At this stage, industrial growth may be linked to primary industries. The level of technology required will be low. Copyright: Ramon Venne, http://www.sxc.hu

Rostow - Stages of Growth 4. Drive to Maturity: Growth becomes self-sustaining – wealth generation enables further investment in value adding industry and development Industry more diversified Increase in levels of technology As the economy matures, technology plays an increasing role in developing high value added products. Copyright: Joao de Freitas, http://www.sxc.hu

Rostow - Stages of Growth 5. High mass consumption High output levels Mass consumption of consumer durables High proportion of employment in service sector Service industry dominates the economy – banking, insurance, finance, marketing, entertainment, leisure and so on. Copyright: Elliott Tompkins, http://www.sxc.hu

Problem’s with Rostow’s Model and the International Trade Approach Developmentalism: the idea that every country and region will eventually make economic progress toward “high mass consumption” provided that they compete to the best of their ability. This is not likely and is hard on the planet. Increased dependence on MDCs and their markets. Undue influence on many global policies, including those of the U.N. and World Bank. Market Stagnation: the MDCs have very limited population growth. Markets for low-cost manufactured goods grow slowly today. Undervalues the obstacles and competitive disadvantages faced by late starters versus those in the Core.

Fair Trade Coffee Because the role of middlemen is reduced and because consumers generally pay higher prices, producers of fair trade coffee can earn more than traditional coffee growers.

Core and Periphery in World Economy Fig. 9-25: This north polar projection of the world shows that most of the MDCs are in a core area north of 30° N latitude. The LDCs are mostly on the periphery of this map.