Where Are More and Less Developed Countries Distributed? Chapter 9 Key Issue 2 Where Are More and Less Developed Countries Distributed?

Key Concepts In Development Development is the process of economic growth, in which countries try to improve their level of material wealth through the diffusion and realization of resources, knowledge, and technology. The Human Development Index (HDI) is one measure of development. It was created by the U.N. and calculates development in terms of human welfare rather than money or productivity. It evaluates human welfare in three areas: economic, social, and demographic. The economic factor is gross domestic product per capita (GDP); the social factors are the literacy rate and amount of education; and the demographic factor is life expectancy. The highest HDI possible is 1.0 or 100% and the countries of the world can be categorized into nine regions according to their level of development.

More Developed Regions Five of the nine regions identified by the United Nations HDI are more developed. These include Anglo-America, western and eastern Europe, Japan, and the South Pacific. Anglo-America has the highest HDI (0.94) and is well endowed with natural resources and agricultural land. It has developed high-tech industries, and is a leading consumer and the world’s largest market.

More Developed Regions cont. Western Europe has a very high HDI (0.93). It must buy many raw materials from other countries but it has developed economies around high-value goods and services industries to offset these imports. Western Europe has offset the potential disadvantages of a history of conflict and cultural diversity by creating the European Union, which is potentially the world’s largest and richest market. Eastern Europe has the lowest HDI of these 5 regions (0.80) and is the only region where the HDI has actually declined in recent years. This is the result of the legacy of communist rule. The region’s HDI has declined because of the economic vacuum created by the end of communist rule together with higher death rates. Many central European countries have made the transition to market economies and have benefited from closer ties to the European Union. However, other countries, especially those from the former Soviet Union and Yugoslavia, continue to languish.

More Developed Regions cont. Japan has become a great economic power despite lacking key resources. It has developed a skilled labor force that specializes in high-quality and high-value products. Australia and New Zealand share many cultural characteristics with Britain, although their economies, which are net exporters of food and other resources, are increasingly tied to Asian countries.

Less Developed Regions The six regions that can be classified as developing are Latin America, East Asia, the Middle East, Southeast Asia, South Asia, and Sub-Saharan Africa in order of development level. A higher percentage of people in Latin America, with an HDI of 0.80, live in urban areas than any other developing region. Development in this region is also characterized by tremendous inequality in income distribution. In East Asia, which has an HDI of 0.76, China is now the world’s second largest economy, and the largest market for consumer products. Manufacturing has moved to this region because of low wages which is driving down factory pay around the world. The harsh physical environment of the Middle East, with an HDI of 0.68, does not support high population concentrations but the region has the largest percentage of the world’s petroleum reserves. This allows many countries in the region to enjoy a trade surplus and use petroleum wealth to finance economic development.

Less Developed Regions cont. In the Middle East there is a large gap in per capita income between the petroleum-rich countries and those that lack resources. These countries have to deal with traditional cultural values associated with Islam which can hinder development, especially where the role of women is concerned. The United Nations has constructed an Alternative Human Development Index for Middle Eastern countries that identifies three reasons for the region’s relatively low HDI-lack of political freedom, low education and literacy rates, and lack of opportunities for women.

Less Developed Regions cont. Indonesia, Vietnam, and Thailand are the most populous countries in Southeast Asia, a region that concentrates on the production of agricultural products that are used in manufacturing. Some countries in this region, including Thailand, Singapore, Malaysia, and the Philippines, have developed rapidly, especially because of growing manufacturing built on cheap labor. South Asia has the second-highest population and the second-lowest per capita income. India is one of the world’s leading rice and wheat producers thanks in large part to the innovations of the Green Revolution. It now has the world’s fourth largest economy. With an HDI of 0.51, Sub-Saharan Africa is the poorest region in the world, although it is a major source of mineral wealth. Many of the region’s economic and political problems are legacies of the colonial era.