LECTURE 6: MACROECONOMIC INTERDEPENDENCE (I) Interdependence: Y depends on Y*.
World Development and Interdependence
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Transcript of World Development and Interdependence
WORLD DEVELOPMENT AND INTERDEPENDENCE
IGCSE SECONDARY 5Chapter 11: New Wider World
WHAT IS DEVELOPMENT?
The level of economic growth of a country or region and the process of change taking place within it.
An incident that causes a situation to change or progress. It is the process of changing and becoming larger, stronger, or more impressive, successful, or advanced, or of causing somebody or something to change.
PATTERNS OF DEVELOPMENTMEDC’s
• More Economically Developed Countries• Countries that have high income, which include the richer, more
industrialized countries of the so-called developed “North”• Ex: 1. Japan, 2. USA, 3. Italy, 4. UK and 5. Germany
LEDC’s
• Less Economically Developed Countries• Countries that tend to have a low income, which include the
poorer, less industrialized countries of the so-called developing “South”.
• Ex: 1. Ethiopia, 2. Kenya 3. Mexico, 4. Chile, 5. Argentina, 6. Brazil, 7. India, and 8. Bangladesh
NEW INDUSTRIALIZED COUNTRIES (NIC) New Industrialized Countries (NICs) – Countries, mainly in the Pacific Rim of Asia, that have undergone rapid and successful industrialization since the early 1980s.
Ex: 1. Singapore, 2. Taiwan, 3. Malaysia, 4. South Korea and 5. Thailand
CHARACTERISTICS OF DEVELOPMENT1. ECONOMIC WEALTH – The wealth of a country is measured by its GNP per capita.
a) GNP per capita (Gross National Product per person) – The GNP per capita is the total value of goods and services produced by a country in a year, divided by the total number of people living in that country.
CHARACTERISTICS OF DEVELOPMENT2. SOCIAL INDICATORS PopulationBirth rate - to the number of live births per 1000 people per year.
Death rate - refers to the number of deaths per 1,000 people per year.
Natural increase - can be calculated by subtracting the death rate from the birth rate.
HealthInfant mortalityLife expectancy Population per Doctor
CHARACTERISTICS OF DEVELOPMENT OTHER INDICATORS
i. Literacy (Education)
ii. Nutrition
iii. Employment
iv. Energy Consumption
INEQUALITIES IN WORLD DEVELOPMENT HUMAN DEVELOPMENT INDEX (HDI)
Three variables measured by HDI
1. LIFE EXPECTANCY (Health) – is regarded by the UN as the best measure of the health and safety of a country.
2. EDUCATION ATTAINMENT (Education) – is obtained by combining adult literacy rates and the primary, secondary and tertiary student enrolment rate.
3. REAL GNP PER CAPITA (Standard of living)
INEQUALITIES IN WORLD DEVELOPMENT The HDI can:
1. Measure difference within a country (unlike GNP) as well as between countries
2. Highlight where poverty is worst, both within a country and between countries
3. Act as a measure to show how far a country has developed and whether there are improvements in its level and rate of development
4. Help a country to set targets that can lead to improvements in the quality of life and its citizens, e.g. better health care to improve life expectancy and better education to improve literacy rate.
INEQUALITIES IN WORLD DEVELOPMENT
ECONOMIC SOCIAL
POLITICAL ENVIRONMENT
CAUSES OF INEQUALITY
*Each groups will explain and analyze each causes of inequality
INEQUALITIES IN WORLD DEVELOPMENT
Higher birth rates and infant mortality, a
greater natural increase in population, a higher
proportion of their population aged under 15, and a shorter life
expectancy
Poor education facilities (lower level of literacy, less
time spent at school), poorer health care (fewer hospitals
and doctors per size of population), a poorer diet and a poorer provision of
services (less energy/electricity available. unreliable or polluted water supplies, limited transport
provision)
More jobs in the primary and informal sectors and fewer in
the secondary, tertiary and formal sectors
Less purchasing power per
capita
A smaller volume of
trade, likely trade deficit and a need to
seek aid
SUSTAINABLE DEVELOPMENT …meets the needs of the present without compromising the ability of future generations to meet their own needs. It is a way of improving people’s standard of living and quality of life without wasting resources or harming the environment.
SUSTAINABLE DEVELOPMENT1.Quality of life - people’s satisfaction
of their way of life and their environment
2.Standard of living - people’s level of material comfort and economically uplifted
WORLD TRADE AND INTERDEPENDENCE1. Interdependence – refers to the reliance of a country, especially in
terms of trade and aid, on other countries in the global economy.
2. Exports – goods and products sold or transported abroad by one country for sale or exchange to other countries.
3. Imports – goods, products or something brought in by a country from another country usually for commercial or industrial purposes.
4. Free trade – Free trade is when government neither restrict nor encourage trade. It is known as unrestricted trade, international trade that is not subject to protective regulations or tariffs intended to restrict foreign imports.
5. Tariffs – are taxes or customs duties paid on imports. It is a duty levied by a government on imported or exported goods.
6. Quotas – refers to the maximum amount or quantity of goods permitted that can be imported.
AID
Aid – is the giving of resources by one country, or an organization (known as the donor), to another country (the recipient).
FORMS OF
AIDMONEY (i. e. Grant /Loan)
Goods, foods, machinery or technology (short term relief / long term benefit)
People / Human resource (i.e. skills and education, teachers, nurses and engineers)
AID
Reasons of LEDCs’ require for aid:
i. Trade deficit
ii. Improvement of basic amenities
iii. Promotion of sustainable development
iv. Impact of natural disasters
v. Impact of internal and external conflict
AID The advantages of aid to a recipient country:
Short-term aid can include
1. Food
2. Clothing
3. Shelter
4. Medical supplies
AID The advantages of aid to a recipient country:
Long-term aid can include
Improvement of education
Improvement of health standard
Improvement of growing higher-yielding
crops
AID The disadvantages of aid to a recipient country:
a) Uneven distribution of aid that rarely reached the poorest people (i.e. living in rural areas)
b) The occurrence of inefficiency and corruption (by officials especially those in the urban areas)
c) Increased countries’ debt
d) Dependency (LEDCs to MEDCs)