1. What strategies and obstacles to countries face as they initiate development?

2. Financing Development
Foreign direct investment: Investment made by a foreign company in the economy of another country.
Foreign Aid: Economic or military aid giving to countries from other countries.
2016: US expected to give $37.9 billion in foreign aid.
Loans
World Bank
-Provides loans to countries to reform public administration and legal institutions, develop and strengthen financial institutions.
International Monetary Fund (IMF)
-Provides assistance to countries where balance-of-payments threaten expansion of international trade.
- The balance of payments (BOP) is an accounting of a country's international transactions for a particular time period. Any transaction that causes money to flow into a country is a credit to its BOP account, and any transaction that causes money to flow out is a debit.
Microfinance or Micro-Loans
-Small loans and other financial services to individuals and small businesses in developing countries
-Example: Grameen Bank

3. National Development Strategies
Self-Sufficiency Approach
International Trade Approach

4. Facts/Positives/Example s
Self-Sufficiency
Facts/Positives/Example s
Problems
Spread investment across as many sectors as possible
Modest but fair
Development more evenly distributed
Limits imports (limits competition)
High tariffs
Quotas on imports
Example: India & China
Most countries don’t use self-sufficiency any more
Protection of inefficient businesses
Need for large bureaucracy

5. International Trade Approach
Facts/Positives/Examples
Problems
Must identify unique economic assets
Must produce better quality at lower price than other countries
Examples
Four Asian Tigers
Arabian Peninsula countries
Uneven resource distribution
Increased dependence on MDCs
Market decline

7. Rostow’s Stages of Development
1960
Attempt to explain the stages that a country goes through as it moves from LDC/periphery to MDC/core
5 stages
The traditional society
The preconditions for takeoff
The takeoff
The drive to maturity
The age of mass consumption

8. Stage #1 Traditional Society: Still Subsistence

9. United States: Pre-independence

10. Modern Day States: Haiti, Afghanistan

11. Stage 2: Preconditions for takeoff: Invest in infrastructure

12. United States: Early to Mid-1800’s

13. Modern Day: India

14. Stage 3: Takeoff: Limited Industry

15. United States: 1880’s Oil and Steel

16. Modern: Thailand

17. Stage 4: Drive to Maturity

18. United States: Late 1800’s

19. Modern: South Korea

20. Stage 5: Age of Mass Consumption

21. United States: Early to Mid-1900’s

22. Four Asian Tigers Hong Kong Singapore South Korea Taiwan
A.k.a. The Four Asian Dragons, The Four Little Tigers, The Gang of Four
Pursued export driven economic development in the 1960s, which leveled off in the 1990s
International Trade Approach
Emerging Tigers?
China
India
Increasing education & export levels are leading to rapid economic development

23. Kingdom Center, Saudi Arabia
Seoul, South Korea
Dubai, UAE
Hong Kong