december 6, 2015s. mathews1 human geography by james rubenstein chapter 9 key issue 4 why do less...
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April 21, 2023 S. Mathews 1
Human Geography
By James Rubenstein
Chapter 9Key Issue 4
Why Do Less Developed Countries Face Obstacles to
Development?
April 21, 2023 S. Mathews 2
In recent years, LDCs have made improvements in
development, but the gap between LDCs and MDCs have continued to widen.
Natural Increase has dropped 20% in LDCs compared to
83% in MDCs.1/5th of the world’s people (in
MDCs) consume 5/6ths of the world’s goods.
April 21, 2023 S. Mathews 3
Progress toward
development
April 21, 2023 S. Mathews 4
To reduce disparities between the rich and poor countries,
LDCs must develop more rapidly. They must . . .
adopt policies that successfully promote development
(emphasis is on international trade).
They must find funds to pay for the development (emphasis is
on self-sufficiency).
April 21, 2023 S. Mathews 5
Elements of Self-Sufficiency Approach
1. Spread investment as equally as possible across all sectors of the economy and regions.
2. Isolate fledgling businesses from international corporations.
3. Set barriers to limit imports.
April 21, 2023 S. Mathews 6
India: Example of the Self-Sufficiency
Approach1. Limited imports of foreign
goods2. Exports were discouraged.3. Government approval
required for expansion.4. Businesses subsidized.
April 21, 2023 S. Mathews 7
Problems with the Self-Sufficiency
Alternative1. Inefficiency - protects
inefficient businesses.2. Large Bureaucracy – the
complex administration, needed to manage controls, encouraged abuse and corruption.
April 21, 2023 S. Mathews 8
Elements of International Trade
Approach1. What resources does a country have in abundance that other countries are willing to buy?
2. What products can the country manufacture and distribute at a higher quality and lower cost to other countries?
April 21, 2023 S. Mathews 9
*Rostow’s 5 stage Development Model
1. The traditional society.2. The preconditions for takeoff.3. The takeoff.4. The drive to maturity.5. The age of mass consumption.
April 21, 2023 S. Mathews 10
The Traditional Society
A very high percentage of population engaged in
agriculture.A high percentage of national
wealth allocated to “nonproductive” activities,
such as the military and religion.
April 21, 2023 S. Mathews 11
The Preconditions for Takeoff
Under influence of well educated leaders, the
country starts to invest in new technology and
infrastructure, such as water supplies and
transportation systems.
April 21, 2023 S. Mathews 12
The TakeoffRapid growth, technical
advances, and high productivity occur in a limited
number of economic activities.
Other sectors of the economy remain dominated by traditional practices.
April 21, 2023 S. Mathews 13
The Drive to Maturity
Modern technology diffuses from take-off industries to a wide variety of industries.
Workers become more skilled and specialized.
April 21, 2023 S. Mathews 14
The Age of Mass Consumption
The economy shifts from production of heavy industry
to consumer goods.
April 21, 2023 S. Mathews 15
MDCs are in stages 4 and 5.As a country concentrates on
international trade, it benefits from exposure to
consumers in other countries.Rostow’s model suggests that
any country can become more developed.
April 21, 2023 S. Mathews 16
Examples of International Trade
ApproachPersian Gulf States used petroleum revenues to
finance large projects and provide consumers goods.South Korea, Singapore,
Taiwan, and Hong Kong used cheap labor to produce and sell products inexpensively.
April 21, 2023 S. Mathews 17
Problems with the International Trade
Alternative1. Uneven Resource
Distribution2. Market Stagnation3. Increased Dependence
on MDCs
April 21, 2023 S. Mathews 18
Uneven Resource Distribution
LDCs suffer when the resource that they have for sale
doesn’t command a large enough price to enable them to purchase products needed
for growth.
April 21, 2023 S. Mathews 19
Market Stagnation
The slow growth of MDCs population can and has limited market size of products from LDCs.
April 21, 2023 S. Mathews 20
Increased Dependence on MDCs
Investments in takeoff industries may reduce
production of necessities for the population, forcing an LDC to depend on MDCs
for those necessities.
April 21, 2023 S. Mathews 21
Recent Triumph of the International Trade
Approach
Since India dismantled its barriers to international trade, its per capita GDP has increase
from 4% to 6% annually.
April 21, 2023 S. Mathews 22
World Trade Organization
Established in 1995, by countries representing
97% of world trade,to promote, and remove barriers to international
trade in all countries.
April 21, 2023 S. Mathews 23
Critics of the WTO
Liberals charge the WTO as antidemocratic.
Conservatives charge that the WTO compromises
the sovereignty of individual countries.
April 21, 2023 S. Mathews 24
Financing Development
LDCs must generally obtain loans from MDCs.
From banks and international organizations, and
From direct investment by transnational corporations.
April 21, 2023 S. Mathews 25
LoansThe World Bank and the
International Monetary Fund lend about $50 billion annually
to LDCs for development.Commercial banks from MDCs
have a current outstanding loans to LDCs totaling $2.1
trillion.
April 21, 2023 S. Mathews 26
Problems with LoansHalf of the projects funded in
Africa have ended up as failures.Many LDCs have accumulated
debt that exceeds annual income.
Lending agencies have had to cancel debt and encouraged
LDCs to adopt structural adjustment programs.
April 21, 2023 S. Mathews 27
Debt as a percentage of income
April 21, 2023 S. Mathews 28
Structural Adjustment Programs
Policies that create conditions encouraging international trade, such as raising taxes, reducing
government spending, controlling inflation, selling publicly owned utilities to private corporations, and charging citizens more for
services.
April 21, 2023 S. Mathews 29
Transnational Corporations
Corporations operating in countries other than the
one in which its headquarters are located.
April 21, 2023 S. Mathews 30
Flow of Investment
April 21, 2023 S. Mathews 31
Core and
Periphery
Most MDCs
Core and Periphery
Most MDCs are
located above the 30o north
latitude.
April 21, 2023 S. Mathews 32
Finis
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