Chapter 9 Chapter 9 DevelopmentDevelopment

H.D.I. Distribution of CountriesDevelopment Models

How does a country “Develop”?How does a country “Develop”?

The three objectives of developmentThe three objectives of development• increases in availability and increases in availability and

improvements in the distribution of improvements in the distribution of food, shelter, health, protection, etc.food, shelter, health, protection, etc.

• improvements in ‘levels of living,’ improvements in ‘levels of living,’ including higher incomes, more jobs, including higher incomes, more jobs, better education, etc.better education, etc.

• expansions in the range of economic expansions in the range of economic and social choices available to and social choices available to individuals and nations individuals and nations

Location of More and Less Location of More and Less Developed CountriesDeveloped Countries

Development generally reflects a North-South split in the world.

United Nations’ Measurement for United Nations’ Measurement for H.D.I.H.D.I.

Economic IndicatorsEconomic Indicators• Gross Domestic Product (GDP) country output Gross Domestic Product (GDP) country output

of productof product• Types of Work (Economic Sectors)Types of Work (Economic Sectors)

Social IndicatorsSocial Indicators• Education and LiteracyEducation and Literacy• Health and WelfareHealth and Welfare

Demographic IndicatorsDemographic Indicators• Life Expectancy (37 - 80 years) Life Expectancy (37 - 80 years) • Infant Mortality (<10 - >100 per thousand)Infant Mortality (<10 - >100 per thousand)• Natural Increase (0 - 4.7 %)Natural Increase (0 - 4.7 %)

Primary ActivitiesPrimary Activities

Direct removal of natural resources Direct removal of natural resources such as mining, forestry, and such as mining, forestry, and agriculture -most important in the agriculture -most important in the LDCs.LDCs.

Subsistence AgricultureSubsistence Agriculture Fishing and ForestryFishing and Forestry Mining and QuarryingMining and Quarrying

Primary ProductsPrimary ProductsThe percentage of people working in agriculture exceeds 75% in many LDCs of Africa and Asia. In Anglo-America and Western Europe the figure is <5%

Trade in Primary ProductsTrade in Primary Products Importance to Importance to

Developing Developing EconomiesEconomies

Danger of Danger of Commodity Trade Commodity Trade DependenceDependence

Puerto Rico Coffee Plantation

http://www.pbs.org/wgbh/pages/frontline/gsearch.html?q=coffee+trade

Secondary Activities: ManufacturingSecondary Activities: ManufacturingSecondarySecondary - Processing and transforming - Processing and transforming

natural resources: steel, textiles, auto natural resources: steel, textiles, auto assembly. These used to be most important assembly. These used to be most important in MDCs, but increasingly important in the in MDCs, but increasingly important in the semi-periphery (Korea, Mexico, Brazil, semi-periphery (Korea, Mexico, Brazil, Singapore)Singapore)

Tertiary and Beyond: ServicesTertiary and Beyond: ServicesProvision of services in exchange for payment. Provision of services in exchange for payment.

Includes retailing, banking, law, education, Includes retailing, banking, law, education, and government.and government.

Education, R & D, and information technology Education, R & D, and information technology becoming most important in the becoming most important in the postindustrial postindustrial core regions.core regions.

Less-developed countries often focus on Less-developed countries often focus on tourism.tourism.

Services historically were clustered into Services historically were clustered into settlements. Increasingly the most important settlements. Increasingly the most important service centers are massive service centers are massive world citiesworld cities..

Tertiary and Beyond: ServicesTertiary and Beyond: Services

Less-developed countries often focus Less-developed countries often focus on tourism.on tourism.

Club Med, The Bahamas

Vendors, Bali

Tertiary and Beyond: ServicesTertiary and Beyond: Services

Resources and TechnologyResources and Technology

Resources affect patterns of development:Resources affect patterns of development: cultivable cultivable land, energy sources, minerals. But changes in land, energy sources, minerals. But changes in technology affect the value of these resources. Also, technology affect the value of these resources. Also, trade or lack of it can offset lack of resources (Japan) trade or lack of it can offset lack of resources (Japan) or make them less relevant (Brazil).or make them less relevant (Brazil).

Technology Systems: roughly every 50 years since Technology Systems: roughly every 50 years since 1790 a new complex of technologies has 1790 a new complex of technologies has revolutionized the world economic system and its revolutionized the world economic system and its structure. The most recent of these is the system structure. The most recent of these is the system which includes biotechnology, advanced materials which includes biotechnology, advanced materials (superconductors, solar power) and information (superconductors, solar power) and information technology. technology.

Which parts of the world benefited from the shift from Which parts of the world benefited from the shift from coal to oil? Which suffered? Which parts of the world coal to oil? Which suffered? Which parts of the world will benefit from the inevitable end of our reliance on will benefit from the inevitable end of our reliance on petroleum and the necessary shift to wind, hydro, petroleum and the necessary shift to wind, hydro, tide, or solar power ?tide, or solar power ?

New International Division of New International Division of LaborLabor

Transnational Companies have been Transnational Companies have been very aggressive in using low-cost very aggressive in using low-cost labor in LDCs.labor in LDCs.• Seek elimination of trade barriers (Tariffs)Seek elimination of trade barriers (Tariffs)• No minimum standards in place No minimum standards in place • A “rush” to the bottom?A “rush” to the bottom?• Loss of U.S. jobs - “a great sucking Loss of U.S. jobs - “a great sucking

sound” after NAFTA?sound” after NAFTA?

New International Division of New International Division of LaborLabor

Trading BlocksTrading Blocks International agreements that eliminate International agreements that eliminate

barriers to trade within regions:barriers to trade within regions:• North American Free Trade Agreement North American Free Trade Agreement

(NAFTA)(NAFTA)• European Union (EU)European Union (EU)• Oil Producing and Exporting Countries (OPEC)Oil Producing and Exporting Countries (OPEC)

Trading OrganizationsTrading Organizations International agreements that International agreements that

eliminate barriers to trade among eliminate barriers to trade among members:members:• World Trade Organization (WTO)World Trade Organization (WTO)

Other Economic IndicatorOther Economic Indicator

Economic structureEconomic structure Worker Worker

productivityproductivity Access to raw Access to raw

materialsmaterials Availability to Availability to

consumer goodsconsumer goods

Measuring DevelopmentMeasuring Development Social IndicatorsSocial Indicators

• Education and LiteracyEducation and Literacy

Measuring DevelopmentMeasuring Development Social IndicatorsSocial Indicators

• Health and WelfareHealth and Welfare

RankRank    HDI Index HDI Index Life Life

ExpectancyExpectancy Adult LiteracyAdult Literacy GDP (US$)GDP (US$)

    Arab StatesArab States 0.6790.679 6767 64.164.1 2,6112,611

    East Asia and the PacificEast Asia and the Pacific 0.7680.768 70.570.5 90.490.4 1,5121,512

    Latin America / CaribbeanLatin America / Caribbean 0.7970.797 71.971.9 89.689.6 3,2753,275

    South AsiaSouth Asia 0.6280.628 63.463.4 58.958.9 617617

    Sub-Saharan AfricaSub-Saharan Africa 0.5150.515 46.146.1 60.560.5 633633

OECDOECD 0.8920.892 77.777.7 nana 25,75025,750

WorldWorld 0.7410.741 67.167.1 nana 5,8015,801

High Human DevelopmentHigh Human Development      

11 NorwayNorway 0.9630.963 79.479.4 9999 48,41248,412

1010 United StatesUnited States 0.9440.944 77.477.4 9999 37,64837,648

1111 JapanJapan 0.9430.943 8282 9999 33,71333,713

4242 SlovakiaSlovakia 0.8490.849 7474 99.699.6 6,0336,033

4747 Costa RicaCosta Rica 0.8380.838 78.278.2 95.895.8 4,3524,352

5353 MexicoMexico 0.8140.814 75.175.1 90.390.3 6,1216,121

Medium Human DevelopmentMedium Human Development      

7575 VenezuelaVenezuela 0.7720.772 72.972.9 9393 3,3263,326

8383 ArmeniaArmenia 0.7590.759 71.571.5 99.499.4 918918

8484 PhilippinesPhilippines 0.7580.758 70.470.4 92.692.6 989989

9494 TurkeyTurkey 0.750.75 68.768.7 88.388.3 3,3993,399

108108 Viet NamViet Nam 0.7040.704 70.570.5 90.390.3 482482

144144 UgandaUganda 0.5080.508 47.347.3 68.968.9 249249

Low Human DevelopmentLow Human Development      

159159 RwandaRwanda 0.450.45 43.943.9 6464 195195

166166 ZambiaZambia 0.3940.394 37.537.5 67.967.9 417417

InfrastructureInfrastructure