1. What else do you need to know?
Development

2. Development is a continuous process, and every country is located at some point along a continuum of development. Most countries cluster at two ends of this continuum and in two different regions of the world

3. More and Less Developed Regions
Countries of the world can be categorized into 9 major regions according to level of development
More developed regions
Anglo-America – Western Europe
Eastern Europe *(Japan & South Pacific)
Less developed regions
Latin America – East Asia
Southeast Asia – Middle East
South Asia – Sub-Saharan Africa

4. North-South Split 30°N Latitude Brandt line
Nearly all MDC’s above this line, & LDC’s below line
**some exceptions – Can you think of any?

5. More and Less Developed Regions
Fig. 9-8: The less developed regions include Latin America, Sub-Saharan Africa, Middle East, South Asia, East Asia, and Southeast Asia.

6. WHY DO LESS DEVELOPED FACE OBSTACLES TO DEVELOPMENT?

7. The facts….
Annual GDP per capita has increased by $4000 in LDC’s, & $20,000 in MDC’s in past century
To reduce disparities between rich & poor countries, LDC’s must develop more rapidly
The 1/5 of the people living in MDC’s consume 5/6 of the worlds goods

8. International Development
Countries chose one of two models to promote development
Self Sufficiency
International Development

9. Development through: Self-Sufficiency
Most popular alternative for most of 20th century
Spread investment equally across all sectors of economy & all regions
“Balanced Growth”
Modest pace, but fair
Good for local businesses
Set barriers to imports
taxes, quotas,& licenses
restricts exports

10. Problems with Self-Sufficiency
Inefficiency:
Little incentive to improve quality, increase production, lower prices, lower production costs
Protected from intl. competition & rapid changes in technology
Large Bureaucracy:
Complex admin. System
corruption

11. Development through: International Trade
Identify economic assets
Natural resource? Manufactured product?
Concentrate resources on expansion in world markets
Rostow’s Development Model
many theories grew out of decolonization
1950’s, 5 stage model
ladder of development

13. Examples The Four Asian Dragons
Petroleum-Rich Arabian Peninsula States

14. Problems with International Trade
Uneven Resource Distribution
Prices of NR (no increase) vs. costs of products needed to buy (ex. Copper in Zambia)
Market Stagnation
World market expanding slower
Capture sales from competitors
Increased Dependence on MDCs
Focus on selling to people in MDCs vs. necessities for own people

15. Recent Triumph of International Trade
Despite problems, preferred method in most countries
1990s key turning point for many countries
World trade has tripled over past 25 years
Change in WHAT is being exported in LDCs –
1980 – 75% Agriculture/Minerals
2000 – 80% Manufactured goods
WTO established in 1995 to reduce barriers to trade by
a) enforcing agreements
b) negotiate trade restrictions

16. Transnational Corporations:
Operates in countries other than where its HQ are located (Foreign Direct Investment)
Initially primarily US owned, now Japan, Germany, France, UK
Foreign investment does not flow equally around the world
Only ¼ investment went from MDC to LDC
Of that ¼ to LDCs; nearly 50% went to China (less than 10% to African countries)

17. Financing Development: Loans
Borrow $ to build new infrastructure
World Bank & IMF lend about $50 billion/year to LDCs
Total outstanding loans is approx. 2.1trillion
Theory behind loaning $ for infrastructure & problem with it
Debt exceeds annual income in 18 countries
Structural Adjustment Programs
What are they?

18. Debt as Percent of Income
Fig. 9-20: Many developing countries have accumulated large debts relative to their GDPs. Much of their budgets now must be used to finance their debt.

19. Barriers to Economic Development
Low levels of social welfare
HDI indicators
Foreign Debt
Political Instability
wealth, corruption, democracies, cut off aid
Widespread Disease
AIDS, Malaria, Zika virus

20. Dependency Theory
Political & Economic relationships between countries, control and limit the economic development possibilities of poorer areas (Colonialism)
Dollarization – poor countries tie their currency into a wealthy countries currency (ex. El Salvador)
Some problems with theory: some “dependent” regions have made gains

21. World Systems Theory Immanuel Wallerstein
Three-tier structure (core, periphery, & semi-periphery), helps explain the interconnections between places in the global economy
Periphery dependent on the core & vice versa
Not possible for entire world to experience same level of wealth (capitalist economy)
Applicable across scales (global, national, local)

22. Core and Periphery in World Economy
Fig. 9-22: This north polar projection of the world shows that most of the MDCs are in a core area north of 30° N latitude. The LDCs are mostly on the periphery of this map.