1. Road to Development

2. Comparative vs. Absolute Advantage

3. U.S. Health Worse Than Nearly All Other Industrialized Countries
Bin Laden blames Industrialized countries for climate change
These are headlines from past news stories. What is meant by the word industrialized?

4. What does it mean for a country to be called industrialized?
What does it mean to a developed country?
Can all countries become developed countries?
Do you think all countries will have a large number of factories?

5. Schools of Thought Basketball – man-to-man or zone?
Goals of education – prepare everyone for college or different options of technical classes
There are 2 schools of thought about economic development
Liberal Models
All countries can become developed
A liberal model is Rostow’s Model
Structuralist Models
There is a structure in place which prevents LDCs from achieving development
A structuralist model is Dependency Theory

6. Models of Development Liberal Modernization Models by definition
All countries are capable of development
Economic disparities are a result of short term inefficiencies in local or regional market forces
Focus on International trade

7. Rostow’s Modernization Model of Development
Developed by W.W. Rostow (1950s)
develop economically by concentrating scarce resources on expansion of its distinctive local resources – to trade internationally
aka Ladder of Development

8. Rostow’s Modernization Model of Development
Developed by W.W. Rostow (1950s)
develop economically by concentrating scarce resources on expansion of its distinctive local resources – to trade internationally
aka Ladder of Development

9. Rostow - Stages of Growth
Traditional Society
Characterised by
subsistence economy
high levels of agriculture and labor intensive agriculture
Wealth allocated to nonproductive activities (religious, military)
Village in Lesotho. 86% of the resident workforce in Lesotho is engaged in subsistence agriculture.
Copyright: Tracy Wade,

10. Rostow - Stages of Growth
2. Pre-conditions:
An elite group initiates development
Investments in technology and infrastructure
Commercialization of agriculture
The use of some capital equipment can help increase productivity and generate small surpluses which can be traded.
Copyright: Tim & Annette,

11. Rostow - Stages of Growth
3. Take off:
Increasing industrialization in limited areas (food or textiles)
Foreign investment increases
Infrastructure improvements
Some regional growth
Economy still dominated by traditional practices
At this stage, industrial growth may be linked to primary industries. The level of technology required will be low.
Copyright: Ramon Venne,

12. Rostow - Stages of Growth
4. Drive to Maturity:
Develops broad manufacturing and commercial base
Industry more diversified
Increase in levels of technology utilized
As the economy matures, technology plays an increasing role in developing high value added products.
Copyright: Joao de Freitas,

13. Rostow - Stages of Growth
5. High mass consumption
High output levels
Mass consumption of consumer durables
High proportion of employment in service sector
Service industry dominates the economy – banking, insurance, finance, marketing, entertainment, leisure and so on.
Copyright: Elliott Tompkins,

14. USA Path to Development
Stage 5: early 20th century
Stage 4: late 19th century
Stage 3: middle of 19th century
Stage 2: first half of 19th century
Stage 1: prior to independence

15. Possible 6th stage – Postindustrial
Service replaces industry
Information replaces energy as key resource

17. Origin of common use “industrialized” country
All countries follow the same model of development
For countries that have developed in modern times – only China has followed THE model of development

18. Criticisms
Western bias that urban and industrial = a better life. Development does not necessarily lead to high consumption, can mean social welfare
Assumes LDCs will achieve each level of development before advancing
Uneven resource distribution (Zambia’s one commodity market of copper developed trouble when world copper price fell)

19. Criticisms Does not account for
Colonialism
Culture
Deindustrialization
Increased dependence on MDCs – when concentrating resources in a “takeoff” industry, then buy necessities from MDCs

20. Balanced Growth through Self-Sufficiency
A country should spread investment as equally as possible across all sectors of its economy and in all regions.
Incomes in rural areas keep pace with urban incomes
Businesses remain independent of foreign corporations
Limit imports through tariffs and quotas

21. India followed this policy
Made imports difficult
Discouraged Indian businesses from exporting
Could not convert Indian money into other currencies
Encouraged production of consumer goods for Indian citizens
Provided subsidies for struggling companies

22. Problems
Inefficiency: without true competition, companies have little incentive to improve techniques, technology, products, etc
Large Bureaucracy: needed to administer the controls – complex and corrupt

24. International Trade Approach
Some countries have switched from self-sufficiency approach to international trade
according to the World Bank – international trade countries have seen 4% growth, self-sufficiency countries 1%
LDCs are exporting more manufactured goods rather than agriculture or mining goods
Dollarization: abandoning existing currency in favor of an industrialized countries (In 2001, El Salvador abandoned the colon and now uses American dollars)

25. International Trade Approach
Foreign Direct Investment (FDI) – investment made by a foreign company in the economy of another country
Only 1/3 of investments went from a MDC to a LDC (only 10% went to African nations)
Transnational Corporations are major sources of FDI
PBS learning media – Ethiopia Going Global

26. International Trade Approach

27. International Trade Approach
What is the term used for the factories located here?

28. Models of Development Structuralist Models Dependency Theory
Regional disparities are a structural feature of the global economy
Neo-Colonialism
Gabon – interior forest (plywood producing region) connected by rail with capital; 2nd largest city and capital are not connected by road or rail (deBlij 247)
Old method of industrializing is no longer possible because other factors have changed

29. Dependency Theory
Dependency helps sustain the prosperity of the dominant regions and the poverty of the lesser regions
Based on generalizations that pay little attention to regional differences in culture, politics, and society

31. World-Systems Theory Immanuel Wallerstein
A development theory that includes geography, scale, place and culture in addition to economics
Divide world into
Core
Semi-periphery
Periphery

32. Three Tier Structure Core Periphery Semi-periphery
Processes that incorporate higher levels of education, higher salaries, and more technology
* Generate more wealth in the world economy
Periphery
Processes that incorporate lower levels of education, lower salaries, and less technology
* Generate less wealth in the world economy
Semi-periphery
Places where core and periphery processes are both occurring. Places that are exploited by the core but then exploit the periphery.
* Serves as a buffer between core and periphery

33. Core Periphery Model Core Regions
High levels of socioeconomic prosperity
Dominant players in global economic game
Anglo America HDI .94
Japan and the South Pacific HDI .93
Western Europe HDI .92

34. Core Periphery Model Periphery Poor regions Dependent on the core
Do not have much control over their own affairs
Southeast Asia HDI .71
Middle East HDI .66
South Asia HDI .58
Sub Saharan Africa HDI .47

36. Core Periphery Model Semi Periphery Latin America HDI .78
Regions that exert more power than periphery regions but are
Dominated to some degree by the core
Latin America HDI .78
East Asia HDI .72
Eastern Europe HDI

37. Core/periphery Can be applied at the local scale
LA is the core of S. California region
Alaska is in the periphery of the US
Johannesburg is core of South Africa
Can refer to the different level of processes in the same country
Most of the US operates with core processes, however the rural mountain regions of WVa operate with periphery processes

38. Development Indicators
Economic: GNP, PPP (Purchasing Power Parity), per capita energy consumption
Noneconomic: HDI, gender equity, calorie intake

39. Development Indicators

40. Development Indicators

41. Four Dragons Aka Four Tigers or Gang of Four
S. Korea, Singapore, Taiwan, & Hong Kong
Lacked natural resources
Strongly influenced by Japan’s success
Concentrated on handful of manufactured goods
Low labor costs; Sell to MDCs
Focusing on research & hi-tech industries

42. BRIC Brazil, Russia, India, and China aka “the big four”
At a similar stage of advanced economic development
There has been a shift away from the G7 economies (Fr, Ger, It, UK, US, Jap, Can)
BRICs have begun meeting to coordinate global economies – similar to EU
Some include South Africa for BRICS

43. GDP

44. 10 Largest Economies (measured in USD)

45. More fun … Mex, Indonesia, S. Korea, Turkey MIKT
Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, S. Korea, Vietnam
MIKT
N – 11 – id by Goldman Sachs as high potential of becoming world’s largest economies – in addition to BRICs

46. Millennium Development Goals
Adopted by world leaders during a United Nations summit in the year 2000 and set to be achieved by 2015, the Millennium Development Goals (MDGs) provide concrete, numerical benchmarks for tackling extreme poverty in its many dimensions. The MDGs also provide a framework for the entire international community to work together towards a common end – making sure that human development reaches everyone, everywhere. If these goals are achieved, world poverty will be cut by half, tens of millions of lives will be saved, and billions more people will have the opportunity to benefit from the global economy.

47. Millennium Development Goals
The eight MDGs break down into 21 quantifiable targets that are measured by 60 indicators.
Goal 1: Eradicate extreme poverty and hunger
Goal 2: Achieve universal primary education
Goal 3: Promote gender equality and empower women
Goal 4: Reduce child mortality
Goal 5: Improve maternal health
Goal 6: Combat HIV/AIDS, malaria and other diseases
Goal 7: Ensure environmental sustainability
Goal 8: Develop a Global Partnership for Development

48. Ghana & MDG

49. Ghana
Ghana, is a west African country, bounded on the north by Burkina Faso.
On the east it is bounded by Togo
On the south it is bounded by the Atlantic Ocean, and on the west by Côte d'Ivoire.

50. Accra The capital city of Ghana is Accra
Total population of Ghana is approximately 23,382,848
Languages spoken include Akan, Ewe, Twi and English
Cassava Tree

51. Cedi
The money used in Ghana is the New Ghana Cedi. 1 Ghana Cedi is worth about 78 cents in U.S. dollars.

52. Democracy
Ghana is a democratic nation with a history of peaceful transfers of power.
Young people can vote at age 18 years of age.

53. Formerly a British colony known as the Gold Coast, Ghana was led to independence by Dr. Kwame Nkrumah
On the 6th of March, 1957, Ghana became the first sub-Saharan colonial African nation to achieve independence.

54. Empire of Ghana
The country is named after the ancient Sudanic empire of Ghana, from which the ancestors of the inhabitants of the present country are thought to have migrated.

55. Gold and Ghana
In medieval times, Ghana was the source of much of the gold that found its way across the Sahara to North Africa and Europe.
Gold is still an important part of Ghana’s economy but today Ghana is known more for its cocoa .

56. Cocoa from Ghana is considered to be among the finest cocoa in the world.
Most of Ghana’s cocoa production is on small farms of 4 to 5 acres.
From the 1900s cocoa growing spread in Ghana.

57. 720,000 cocoa farmers in Ghana
Today there are currently close to 720,000 cocoa farmers in Ghana and approximately 2 million in West Africa.
West Africa supplies 70% of the world’s cocoa and Ghana is the second largest producer. 57

58. Price of cocoa on the world market
The price of cocoa on the world market changes frequently. Going up and down.
The changing price of cocoa on the international market means cocoa farmers have no long-term security.

59. Fixed Scales
On the local scene, farmers face additional problems. They are often underpaid by local cocoa buyers using ‘fixed’ scales that show a lower reading than the actual weight of their cocoa beans.

60. Bounced Checks
Sometimes they are paid with checks that bounce or vouchers which the farmers have trouble cashing.

61. The problems Ghanaian cocoa farmers face globally and locally often push their incomes below the poverty line.
They lack the money they need to buy, tools, fertilizers and pesticides to grow cocoa.
They also lack the money they need to pay for clothes, medical care, and school fees for their children.

62. Rich get richer
The experiences of Ghanaian cocoa farmers are like those of many farmers all over the world.
They are caught in a trading system that benefits the multinational companies based in the richest countries.
They are at the mercy of local people who cheat them. 62

63. Farmers’ Cooperatives
Farmers in Ghana are forming ‘Fair Trade’ cooperatives to solve the problems they face.

64. Kuapa’s Mission Kuapa Kokoo (Fair Trade Cooperative) works to:
to empower farmers in their efforts to gain a dignified livelihood
to increase women's participation in all of Kuapa's activities
to develop environmentally friendly cultivation of cocoa

65. Buy Fair Trade Chocolate
You can support farmers and their families by buying Fair Trade chocolate.
Fair prices for chocolate bars means a better life for farmers and their families.

67. Cote d’Ivoire

68. Ghana & MDG
Read Ghana MDG articles

69. Ghana & MDG Goal Measure ½ Poverty & Hunger Target 2015 – 14%
Underweight children
1992 – 27%; 2003 – 23%
Projected 2015 – 21 %
Universal Education
Target 2015 – 100%
Primary School Enrollment
%; 2003 – 69%
Projected 2015 – 83%
Improve Maternal Health
Target 2015 – 54/100,000 live births
Reduce Maternal Mortality Levels
1993 – 280; 2003 – 230
Projected 2015 – will not be met

70. Core Periphery Model