Chapter 10 Development

Link in the chain Commodity chain- links that connect production and distribution of products –Each link can tell you about the importance and wealth of a country

How do you define development? Wealth dependent on what, where and how it is produced Developed- means progress, higher tech, better lifestyles Developing- means progress is being made, but not complete

Gross National Product- measures the total value of things produced by the US on and off US soil (Nike in Thailand) Gross domestic Product- measures only products made on US soil –Formal economy- taxed by gov –Informal economy- not taxed by gov. (illegal drugs)

Sometimes hard to compare GNP because many countries appear poor but have a large informal economy Other types of measures: –Occupations –Productivity –Transportation and communication –Dependency ratio (number of people a worker supports)

Development Models All countries go through development, just at different speed Many criticize that development is based on Western standards and values (all money based not on health, happiness…) Bhutan Gross National Happiness

Rostow’s modernization model Said development was like a ladder with five stages that all countries must go through –Traditional (farming) –Preconditions to takeoff (leadership) –Takeoff (industry and cities) –Drive to maturity (technology) –High mass consumption (high level jobs)

Neocolonialism- major powers of the world still control the poor countries EVEN THOUGH the poor countries are free

Structuralist theory- idea that the world hierarchy can not be easily changed and that not all countries will become developed –Dollarization- when a country adopts a richer countries currency Dependency theory- idea that countries are dependent on each other and there will always be the have and have nots for balance

World systems theory (core-periphery) –Put countries in the three tier system: core, semi periphery, periphery –Those who exploit survive –Theory can be used on many scales, national, local, and global

Barriers to the Cost of Development Periphery barriers: low education, high death rates, socioeconomic difficulties –Half the country is 15 or younger –Male dominance –High illiteracy rate, no doctors, no education –Trafficking when adults are forced (or chose) to sell themselves or their children to overcome poverty Most are girls who become servants

Foreign debt adds up in poor countries that borrowed money but never “got on their feet” –World Bank of IMF (both run by UN) require structural adjustment loans which require a detailed plan –Most countries are too busy paying interest on debt than reinvesting in improving their country

Distribution of wealth gap- where countries have rich and poor and no one in between Poor countries often have corrupt gov. and constant change Corrupt leaders tend to lead with fear and stay in power World's Ten Most Corrupt Leaders 1 NamePosition Funds embezz led 2 1. Mohamed Suharto President of Indonesia (1967–1998) $15–35 billion 2. Ferdinand Marcos President of the Philippines (1972– 1986) 5–10 billion 3. Mobutu Sese Seko President of Zaire (1965– 1997) 5 billion 4. Sani Abacha President of Nigeria (1993– 1998) 2–5 billion 5. Slobodan Milosevic President of Serbia/Yugoslavia (1989–2000) 1 billion 6. Jean- Claude Duvalier President of Haiti (1971– 1986) 300–800 million 7. Alberto Fujimori President of Peru (1990– 2000) 600 million 8. Pavlo Lazarenk o Prime Minister of Ukraine (1996–1997) 114–200 million 9. Arnoldo Alemán President of Nicaragua (1997–2002) 100 million 10. Joseph Estrada President of the Philippines (1998– 2001) 78–80 million 1. Defined as former political leaders who have been accused of embezzling the most funds from their countries over the past two decades. 2. All sums are estimates of alleged embezzlement and appear in U.S. dollars. Source: Transparency International Global Corruption Report 2004.

EPZ- (export processing zones) special manufacturing zones in the semi-periphery that have tax breaks to encourage foreign investment –Maquiladoras-factories set up on the Northern Mexico border by American companies (cheap labor, close to US, environmental laws) –NAFTA- allows free trade between US, Mexico, and Canada –SEZ-(special economic zones) in China near the ports for trade and foreign investment

Agriculture- two types subsistence and cash crops in peripheral countries –Subsistence farming usually root and grain crops –Desertification- occurring in Africa in the grasslands near the desert from overgrazing & farming

Tourism can bring wealth to poor countries but it mostly favors the richer countries that own the resorts –Countries that do make money (Thailand, Kenya, Fiji) use the money to maintain tourism instead of investing in other economic prospects –Tourist damage a country and consume water and food –Employment in tourism sometimes is like servitude

Even core countries have poor areas and rich areas and even rich regions and poor regions Tshirt travels ( ) shows how a simple commodity can be a complicated process –Create quota market where countries can sell their rights to produce Islands of development- corporations build up cities to create jobs in poor areas Uneven Development

Non Governmental Organizations (NGO) –Independent agencies who run for non profit/ charity Microcredit –Successful NGO program in South Asia and South America that gives small loans to people (women) to have them start a small business