1. Vocabulary
Development – the process of improving the material conditions of people through diffusion of knowledge and technology
Human Development Index – created by the UN, recognizes that a country’s level of development is a function of it economic, social, and demographic factors
Gross domestic product – the value of the total output of goods and services provided in a country, per year
Productivity – The value of a particular product compared to the amount of labor you need to make it
Value added – gross value of the product minus the cost of raw materials and energy during manufacturing

2. Vocabulary
Comparative advantage: the ability to produce a product at a lower cost
Gender-related Development Index (GDI) : a measurement of equality between the sexes
Gender Empowerment Measure (GEM): compares the ability of women and men to participate in economic and political task making

3. Development Why does development vary among counties?
Where are more and less developed countries distributed?
Geographers try to understand the reasons why the world is divided between rich and poor and learn what can be done about it.
3 ways people earn a living
Growing food, manufacturing products, and providing services

4. Other ways to say the same thing
MDC – relatively developed country, developed country
LDC – developing country

5. Wallerstein’s World Systems Theory (Core Periphery Model)
3 stages
Developed, developing, less developed
Industrial core
Where manufacturing is
Upward transition areas – areas gaining jobs
Downward transition areas – areas losing jobs
Resource frontier
Provides resources for the industrial core
Backwash effect – As some areas develop, others loose out

6. Why Does Development Vary among countries?
Economic indicators
Social indicators
Demographic indicators
HDI (Human development index) – selects 1 economic factor, 2 social factors, and 1 demographic factor
Economic factor = gross domestic product (GDP) per capita
Social factor = literacy rate and amount of education
Demographic factor = life expectancy

7. Countries HDI Highest = 1.0 or 100% #1 Norway = .963
Human development indices
HDI rank
1 Norway
2 Australia 0.938
3 United States 0.937
4 Netherlands 0.921
5 Germany 0.920
6 New Zealand 0.919
7 Ireland 0.916
8 Sweden 0.916
9 Switzerland 0.913
10 Japan 0.912
11 Canada 0.911
Highest = 1.0 or 100%
#1 Norway = .963
Normally Western European countries and Canada
Lowest
Niger = .281
Sub-Saharan Africa
178 Guinea 0.355
180 Central African Republic 0.352
181 Eritrea 0.351
182 Mali 0.344
184 Chad 0.340
185 Mozambique 0.327
186 Congo, Democratic Republic of the 0.304
186 Niger 0.304

8. Economic Development
GDP, economic structure, worker productivity, access to raw materials, availability of consumer goods
The difference is widening between more and less developed regions

9. Gross Domestic Product
Minimum wage
Going to be much higher in an MDC vs LDC
GDP/ population
Identifies countries wealth
Does not take into account the distribution of wealth within a country. Some are rich and some are starving in any GDP

10. GDP per Capita

11. Types of Jobs Primary (includes agriculture),
Secondary (includes manufacturing),
Tertiary (includes service)
As one increases, the others decrease

12. Primary Sector LDC = >60% in primary MDC = <5% in primary
Primary sector – directly extracts minerals from the earth through agriculture sometimes mining and fishing
LDC = >60% in primary MDC = <5% in primary
MDCs # of jobs have decreased in primary and secondary sectors and increased in Tertiary sectors

13. Secondary sector – manufacturers that process, transform, and assemble raw materials into useful products
Tertiary sector – provisions of goods and services to people in exchange for payment (retailing, banking, law, education, and government

14. Productivity
The value of a particular product compared to the amount of labor you need to make it
Can be measured by the value added
Workers in MDCs produce more with less effort because they have access to more machines, tools, and equipment to perform the work

15. Raw Materials
Requires energy to operate factories that utilize the raw materials
Water, gas, coal, oil (petroleum), or uranium (nuclear)
Industrial Revolution
Cold War
Now countries need to import raw materials
Persian Gulf states = petroleum
Access makes the development potential better, not the development

16. Consumer goods
Transportation and communication are the most sought after
Cars, telephones, computers, etc.
LDCs are much more unlikely to have access to all of these
Technological innovations diffuse from urban-rural areas

17. Social Indicators of Development
Occurs when an elite group begins developing key pieces of infrastructure
Education and literacy
The higher the level of development, the greater the quantity and quality of a county's education
Quantity = Average # of school years attended
Quality = student/teacher ratio and literacy rate
10 years in MDCs and 98% literacy rate (<60% in LDC
Health and Welfare
Over 8% of GDP in MDCs, less than 6% in LDCs
Caloric intake, government subsidies, workers compensation, etc.

18. Demographic Indicators of Development
Life expectancy is how the HDI measures it
Infant mortality, natural increase, crude birth rates

19. Where are more and less developed countries located?
The world is divided into 9 major regions according to their level of development
Anglo-America (Canada and the US)
Latin America
Western Europe
Eastern Eurpoe
East Asia
South Asia
Southeast Asia
Southwest Asia (North Africa and Middle East)
Sub-Saharan Africa
(Japan and South Pacific (Australia and New Zealand))

20. 30 degrees N. Latitude = north-south split

21. More Developed Regions
Anglo-America = HDI .94
Western Europe = HDI .93
Eastern Europe = HDI .80
Japan = HDI .94
South Pacific = HDI .87

22. Less Developed Regions
Latin America = HDI .80
East Asia = HDI .76
Middle East = HDI .68
Southeast Asia = HDI .58
South Asia = HDI .58
Sub-Saharan Africa = HDI .51

23. Vocabulary
Physical Quality of Life Index (PQLI): an attempt to measure the quality of life or well-being of a country. The value is the average of three statistics: basic literacy rate, infant mortality, and life expectancy at age one, all equally weighted on a 0 to 100 scale
Gross national product (GNP): is the value of all the goods and services produced by that country’s companies in one year.
Rostow’s development model: a country can develop economically when an elite group begins developing key pieces of infrastructure by concentrating scarce resources on expansion of its distinctive local industries.

24. Vocabulary
Structural Adjustment Program: Economic policies imposed on less developed countries by international agencies to create conditions encouraging international trade. Such as raising taxes, reducing government spending, controlling inflation, selling publicly owned utilities to private corporations, and charging citizens more for services.
Foreign Direct Investment (FDI): Investments made by a foreign company in the economy of another country
Self Sufficiency Approach: Balanced equally. Equal economy, reduce poverty, isolate businesses to help, barriers limit imports, restrict local business
Fair Trade: emphasizes small businesses and worker owned/democratically run cooperatives and requires employers to pay workers fair wages, permit union organizing, and comply with minimum environmental and safety hazards

25. Key issue #3 Where does level of development vary by gender?
Gender-related development index
Gender empowerment
Not a single country in the world where the genders are treated equally

26. 2 indexes Gender-Related Development Index (GDI)
Compares the level of development of women with that of both sexes
Gender Empowerment Measure (GEM)
Compares the ability of women and men to participate in economic and political decision making

27. GDI Income, literacy, education, and life expectancy
Follows the same as the HDI
#1 Netherlands, US = #42
Last – Yemen (148), Niger = #146
Economically – every county has women making less income on average than men
Women are less likely to attend school in LDC

28. GEM Economic indicators Political indicators
1st Income and professional jobs
Jobs that offer advancement
Highest in N. Europe and the U.S. – more than ½
2nd their share in the national income
Political indicators
% of management and administrative positions
1/3 of jobs
Elected to public office

29. Key issue # 4
Why do less developed countries face obstacles to development?
Development through self-sufficiency
Development through international trade
Financing development
Fair trade
Gap between key development indicators between LDCs and MDCs remain wide
1/5 of the world’s people consume 5/6 of its goods
LDCs must develop rapidly to combat this gap
Adopt policies that successfully promote development
Find funds to pay for development

30. Development through self-sufficiency
Self sufficiency = balanced growth
Elements
Spread its investments across all sectors of its economy and regions equally
Limit the import of goods from other places
Higher taxes on imported goods, fixing quotas, requiring licenses, restricts locals from exporting
India: Required government approval on;
Selling new products, modernize factories, set prices, hire or fire people

31. Problems with Self-Sufficiency
Protects ineffective industries;
Government controls prices, don’t improve quality, lower prices, or increase production
Large Bureaucracy
Need to administer control
Encourages corruption
Black market

32. Development through International trade
Calls for a county to identify its unique economic assets
A country can develop economically by concentrating scarce resources on expansion of its distinctive local industries.
Those funds finance other developments

34. Rostow’s Development Model
5 stage model of development for International trade
1. the traditional society
Not yet started the process of development
Wealth in military and religion
2. the preconditions for takeoff
Development begins when an elite group initiates innovative economic activities
Invests in new technology and infrastructure
3. the takeoff
Rapid growth is generated in a limited # of industries
4. the drive to maturity
Modern tech. diffuses to a wide variety of industries, which then experience rapid growth
5. the age of mass consumption
Shift in economy from production to industrialization

35. How Rostow’s Development Model Looks for the US
5 stage model of development for International trade
1. the traditional society
Prior to Independence
1600s-1700s
2. the preconditions for takeoff
Right before the Industrial Revolution
3. the takeoff
Industrial Revolution
4. the drive to maturity
Machines from industrial Revolution gets put into other areas
5. the age of mass consumption
Most are working in factories and for Railroads, Cars, Steele Mills
1900s

37. Examples of International Trade Approach
The Four Asian Dragons (The Four Economic Tigers)
South Korea, Singapore, Taiwan, Hong Kong
Did not have any natural resources, but developed by concentrating on producing a handful of manufactured goods (clothing and electronics) with low labor costs
Petroleum-Rich Arabian Peninsula States
Saudi Arabia, Kuwait, Bahrain, Oman, United Arab Emirates
LDC to developed country overnight due to 1970 petroleum shortage
Used profits to finance infrastructure

38. Problems with International trade Alternative
#1. Uneven resource distribution
Some resources are not as valuable
2. Market stagnation
You can only sell to so many people
3. Increase dependence on MDCs
Building up takeoff industries may be harmful to your country if they do not work, all the resources are gone and you are worse off

39. Most countries have adopted the International Trade Approach
World Trade Organization (WTO);
A supranational organization that has the power to enforce trade agreements and adjust loans to LDCs
Some say it limits sovereignty of trade
Transnational Corporations; Invests and operates in countries other than the one in which its headquarters are located in
Investments made by other countries in different countries (FDI)
Biggest problem faced by Sub-Saharan African countries in Financing Development is the inability to repay loans

40. Structural Adjustment Programs
Countries that cannot repay their loans must sign a Policy Framework Paper (PFP) outlining economic goals, strategies for achieving objectives, and external financing requirements
Biggest Problem with financing development is the inability to repay loans
Critics say that poverty worsens because taxes raise to repay their loans, and cuts in healthcare, education, and social services

41. Dependency theory
Some countries leaders promote policies that keep the country poor to benefit the elite of the country
Can utilize low cost labor for trade

42. Fair Trade
Products are made and traded according to standards that protect workers and small businesses in LDCs.
Producer standards (farms)
Ban together in communes to get credit for banks, lower cost, and keep prices fair
Worker Standards (factories)
Pay workers fair wages, permit unions, comply with safety standards