Why Does Development Vary Among Countries? Ch. 9 Key Issue 1 Why Does Development Vary Among Countries?

What do you think development is? How should development be defined? How should it be viewed? Is it an inherently “Western” idea?

What is Development? Development implies progress- usually means improvements in tech., production, and social and economic welfare of people Countries cluster at the high (MDC) and low (LDC) ends of the spectrum MDCs and LDCs tend to cluster together in space

Key Indexes Gross National Product (GNP)- total dollar value of the officially recorded goods and services produced in and out of a country Gross Domestic Product (GDP)- total value of goods and services produced only within the country per year Gross National Income (GNI): GDP+income - payments to other countries

The 3 Categories of Development Stems from idea that Indus. Rev and tech. can improve lives of people There are three ways we can measure a country’s development: Economic indicators Social indicators Demographic indicators

Human Development Index To reveal the level of development, the HDI, created by the UN, combines 4 indicators: 1 economic 2 social and 1 demographic indicator HDI ranges from 0-1 30 of lowest 32 countries found in sub-Saharan Africa

Economic Indicators of Development HDI uses Gross Domestic Product (GDP) per Capita (per person) Per capita GDP can help determine average wages in a country Dividing GDP by the population (per capita) = contributions made by each person towards a country’s wealth GDP alone can be misleading: Not everyone is starving in LDCs with GDP p/c of $3000. Or wealthy in US with $45,000 GDP p/c

Other Economic Development Indicators These indicators are used to distinguish between MDCs and LDCs but not used by the UN to calculate HDI. Types of Jobs Worker productivity Consumer goods

Types of Jobs Wages are higher in MDCs than LDCs because people earn living in different ways Called the International Division of Labor Primary sector- extracting materials, hard manual labor (mostly LDCs) Secondary sector- manufacturing process (raw materials into products) (more LDCs than MDCs now) Tertiary sector- services: exchanging goods and services for money (mostly MDCs)

Occupational Structure China GDP $6,200 agriculture 49%, industry 22%, services 29% Australia GDP $32,000 agriculture 3.7%, industry 26.4%, services 70% Philippines GDP $5,100 agriculture 36%, industry 16%, services 48% Luxembourg GDP $59,143 Agriculture 1%, industry 30%, services 69% Singapore GDP $21,492 agriculture 0%, industry 30%, services 70%

Occupational Structure Equatorial Guinea GDP $5,900 agriculture 20%, industry 60%, services 20% Haiti GDP $346 Agriculture 32%, industry 20%, services 48% Malawi GDP $156 agriculture 37%, industry 29%, services 34%

Worker Productivity Workers are more productive in MDCs – they produce more with less effort MDCs have machines and tools LDCs rely on human and animal power Value added measures productivity Selling price – inputs (labor, parts, etc.) = Value Added High p/c GDP allows countries to invest in productivity which increases wealth

Consumer Goods High GDP p/c wealth used to purchase cars, cell phones, internet, etc. More necessary in MDCs than in LDCs since population is more dispersed Creates a gap of “haves” and have-nots” in LDCs = conflict? Owners of consumer goods are concentrated in the urban areas of LDCs

Social Indicators of Development MDCs use wealth to provide schools and healthcare  healthier, educated, protected from hardships = economically productive citizens 2 social indicators used to measure HDI: Education and Literacy Education means student/teacher ratio- Less students, more personalized instruction in MDCs Literacy rate- More books, magazines, newspapers printed in MDCs

Social Indicators of Development Health and welfare Diet- more calories and protein in MDCs MDCs have resources to care for sick- more hospitals/doctors p/c LDCs have to pay more for health care- gov’t does not have GDP resources to pay for MDCs have “safety net” programs”: Struggled to pay for recently because of slowing economic growth and aging population Faced with cutting benefits or increasing taxes

Demographic Indicators of Development Demographics: characteristics of a population (think demographic transition) HDI uses life expectancy as main indicator Better health and welfare permit people to live longer (60 in LDC, 70 in MDC) Low life expectancy means more young people in LDCs (6x more young people = high youth dep. ratio) IMR, NIR and CBR can be used to distinguish between MDCs and LDCs

Uneven Development within Countries Islands of Development Gov’t prioritizes creation of wealth in one city Companies usually set up close to their resources, need cities to house workers and fulfill their needs Leads to one super developed city in an “underdeveloped’ country Informal economy is not counted- what the government does not keep track of, or is illegal

FIGURE 9-12

FIGURE 9-14

FIGURE 9-13