The Developing World Ch. 2 Sec. 3

World Economic Patterns Interdependence: – During Age of Imperialism, Western powers seized control of global market – Forced colonies to switch from subsistence agriculture to cash crops Sold manufactured goods to colonies – Post independence: many former colonies still depend on Western nations for manufactured goods Livelihood depended on production of one specific crop

World Economic Patterns Modernization: – Political stability Obstacles: Imperialists created nations regardless of clan, tribe or loyalty – Economic diversity Dependence on one good  if the value of that good drops, economy plummets Solutions: – Tariff: tax on foreign goods encourages people to buy locally – Privatization: selling industries to private investors to encourage diversity + efficiency – Infrastructure Improve education, sewage and water systems, hospitals, law enforcement, etc. The lingo: Previously: 1 st, 2 nd + 3 rd world Now: underdeveloped, developing, developed

Debt Crisis Nations that could not afford to modernize, borrowed – Interests rate rose, unable to pay debts – Infrastructure suffers when debts go unpaid Similar problems: – Price of oil soaring: developing (and developed) nations can’t afford new prices – Value of cash crops dropping on national market

Growing Pains Population explosion: – Better health care + sanitation, more food = bigger populations – Leads to: poverty, unemployment, overcrowding Urbanization: – Growth of cities + migration to cities – In developing nations: crime, poverty, etc.