Chapter 9 - Development -...
Transcript of Chapter 9 - Development -...
Chapter 9 - Development Brittney Baca
Key Issue #1 Why Does Development Vary Among Countries?
Key Terms
➔ Development: the process of improving the material conditions of people through diffusion of knowledge and technology.
➔ More Developed Country (MDC): a relatively developed country ➔ Less Developed Country (LDC): a country in an earlier stage of
development ➔ Human Development Index (HDI): indicator of level of
development for each country that is determined by the combination of income, literacy, education, and life expectancy.
Indicators of Development ➔ Economic Indicators of Development
◆ Gross Domestic Product Per Capita ◆ Types of Jobs ◆ Productivity ◆ Consumer Goods
➔ Social Indicators of Development ◆ Education and Literacy ◆ Health and Welfare
➔ Demographic Indicators of Development ◆ Life Expectancy ◆ Infant Mortality ◆ Natural Increase Rate ◆ Crude Birth Rate
Economic Indicators of Development
➔ Gross Domestic Product Per Capita ◆ The most important indicator of development ◆ GDP: the value of the total output of goods and services produced in a
country in the course of one year. ◆ GDP Per Capita: GDP divided by the country’s population
➔ Types of Jobs ◆ Primary sector: materials are extracted directly from Earth ◆ Secondary sector: raw materials are assembled into useful products ◆ Tertiary sector: goods and services are provided in exchange for
payment
Economic Indicators of Development
➔ Productivity ● the value of a particular product compared to the amount of labor
needed to make it ◆ Value added: the gross value of the product minus the costs of raw
materials and energy ◆ MDCs are more productive than LDCs.
➔ Consumer Goods ◆ This is where part of the MDCs’ wealth is spent. ◆ The most important goods and services are the ones related to
transportation and communication (mostly in MDCs)
Social Indicators of Development
➔ Education and Literacy ◆ The higher the educational service, the higher the level of development
in a country. ◆ Literacy rate: the percentage of a country’s people who can read and
write ➔ Health and Welfare
◆ People are healthier in MDCs. ● Receive enough food for their daily diet. ● Most of their health-care cost is paid.
Demographic Indicators of Development
➔ Life Expectancy ◆ People live longer in MDCs rather than in LDCs
➔ Infant Mortality Rate, Natural Increase Rate, Crude Birth Rate ◆ Rate is greater in LDCs
Key Issue #2 Where Are MDCs and LDCs Distributed?
Distribution of MDRs and LDRs ➔ More Developed Regions
◆ North America ◆ Europe ◆ Russia ◆ Japan ◆ Oceania
➔ Less Developed Regions ◆ Latin America ◆ East Asia ◆ Southwest Asia and North Africa ◆ Southeast Asia ◆ Central Asia ◆ South Asia ◆ Sub-Saharan Africa
More Developed Regions
➔ North America: HDI 0.95 ◆ Was once the world’s major manufacturer of steel, automobiles, and
other goods; it is now the world’s largest market and leading consumers of these products.
◆ World’s highest percentage of tertiary-sector employment ◆ World’s leading food exporter
➔ Europe: HDI 0.93 ◆ World’s largest and richest market (EU) ◆ Dependent on international trade
More Developed Regions
➔ Russia: HDI 0.73 ◆ Centrally planned economy while under communism ◆ HDI dropped drastically after the Soviet Union split ◆ Tried to work its way back up through high production of oil
➔ Japan: HDI 0.96 ◆ Low cost labor ◆ Selling low cost products ◆ High-quality, high-value products
➔ Oceania: HDI 0.90 ◆ Australia - leader in mining numerous important minerals ◆ Australia and New Zealand - net exporters of food and other resources
Less Developed Regions
➔ Latin America: HDI 0.82 ◆ More people living in urban areas than in any other LDC ◆ Deforestation to sell timber/open new land for agriculture ◆ Has potential to upgrade to MDC, but is hindered by inequitable
income distribution ➔ East Asia: HDI 0.77
◆ China has become the world’s second largest economy, and the world’s largest market and manufacturer
◆ High population and loosening restrictions may lead to higher development
Less Developed Regions
➔ Southwest Asia and North Africa: HDI 0.74 ◆ Rich in oil, but some countries lack significant reserves ◆ Trying to promote development without leaving traditions behind
➔ Southeast Asia: HDI 0.73 ◆ Some petroleum reserves ◆ Exportations from India, Malaysia and Thailand ◆ Lacks infrastructure
➔ Central Asia: HDI 0.70 ◆ Most countries were once part of the Soviet Union ◆ Recuperating through petroleum reserves
Less Developed Regions
➔ South Asia: HDI 0.61 ◆ High population makes region unfavorable because of the population
to resources ratio. ➔ Sub-Saharan Africa: HDI 0.51
◆ Rich in natural resources ◆ Poorest region in the world
Key Issue #3 Where Does Level of Development Vary by Gender?
Development and Gender
➔ Gender-Related Development Index ◆ Economic indicator of gender differences ◆ Social indicator of gender differences ◆ Demographic indicator of gender differences
➔ Gender Empowerment ◆ Economic indicators of empowerment ◆ Political indicators of empowerment
Gender-Related Development Index
➔ Economic indicator of gender differences ◆ Per capita female income as a percentage of per capita male income
➔ Social indicators of gender differences ◆ Number of females enrolled in school compared to number of males
and percent of literate females compared to percent of literate males ➔ Demographic indicators of gender differences
◆ Life expectancy of females compared to males
Gender Empowerment
➔ Economic indicators of empowerment ◆ Per capita female income as a percentage of per capita male income
and percentage of professional and technical jobs held by women ➔ Political indicators of empowerment
◆ Percentage of administrative jobs held by women and percentage of members of the national parliament who are women
Key Issue #4 Why Do LDCs Face Obstacles to Development?
Development Strategies
➔ Development Through Self-Sufficiency ◆ Elements of Self-Sufficiency Approach ◆ Problems with the Self-Sufficiency Alternative
➔ Development Through International Trade ◆ Rostow’s Development Model ◆ Examples of the International Trade Approach ◆ Problems with the International Trade Approach
➔ International Trade Approach Triumphs ◆ World Trade Organization ◆ Foreign Direct Investment
➔ Financing Development ◆ Loans
➔ Fair Trade
Development Through Self-Sufficiency
➔ Elements of Self-Sufficiency Approach ◆ Promotes balanced growth ◆ Focuses on all working sectors
➔ Problems with the Self-Sufficiency Alternative ◆ Inefficiency- without competition, companies lagged behind the rest of
the world and counted on the government to make a profit. ◆ Large bureaucracy complex admin systems that were corrupt, easily
bribed. Creation of a black market to get around all of the government issues.
Development Through International Trade
➔ Rostow’s Development Model ◆ The traditional society: No signs on development. Most of the region is
still engaged in primary sector activities. ◆ The preconditions for takeoff: Innovative economic activities are
initiated. New technology and infrastructure is introduced. ◆ The takeoff: Industrialization begins to spread, the region upgrades to
secondary sector activities. ◆ The drive to maturity: Industries diffuse as a larger amount, workers
become more specialized and skills. ◆ The age of mass consumption: The economy shifts from production of
heavy industry to consumer goods.
Development Through International Trade ➔ Examples of the International Trade Approach
◆ The Four Asian Dragons: South Korea, Taiwan, Hong Kong and Singapore trade manufactured goods due to their lack of natural resources.
◆ Petroleum-rich Arabian Peninsula States: Saudi Arabia, Kuwait, Bahrain, Oman, and the United Arab Emirates develop by increasing the prices of petroleum
➔ Problems with the International Trade Alternative ◆ Uneven resource distribution: Countries’ sales drop for only
depending on one asset ◆ Increased dependence on MDCs: LDCs depend on MDC buying their
products too frequently ◆ Market decline: Countries that depends on selling low cost products
will be affected due to this decline
International Trade Approach Triumphs
➔ World Trade Organization ◆ Attempts to remove barriers in order to freely trade with other
countries around the world
Financing Development
➔ Loans ◆ The World Bank: divided into two groups, the International
Bank for Reconstruction and Development, and the International Development Association.
◆ The IMF: Provides loans to countries experiencing balance-of-payments problems that threaten expansion of international trade.
Fair Trade
➔ Fair trade: products are made and traded according to standards that protect workers and small businesses in LDCs.