Economic Development of AsiaIntroduction and OverviewChapters 1(a), 2(a) and 1(b)

Players at a Glance

•Tier 1 – Newly Industrialized Countries (NIC’s)▫South Korea, Taiwan, Hong Kong,

Singapore•Tier 2 – S.E. Asian Developing Countries

▫Thailand, Malaysia, Indonesia, Philippines•Tier 3 – South Asian Developing Countries

▫India, Pakistan, Bangladesh, Nepal, Bhutan•China – East Asian Developing Country

(Tier 3)

How the Other Half Live

•40% of world population lives on less than $2 a day.

•Extreme poverty▫Starvation, dispair

•Extreme disparities in income distribution (see fig. 11)

•Poor quality of live, subsistence standards

UN Millennium Development Goals (MDG’s)

•In the year 2000, 189 member countries of the UN adopted eight MDG’s to eradicate poverty and achieve other human development goals by the year 2015.

•What are these goals?▫(Group Exercise 1 – Find a list of UN MDGs

by searching the internet) (15 minutes)

UN Millennium Development Goals (cont’d)•Eradicate extreme poverty and hunger•Achieve universal primary education•Promote gender equality•Reduce child mortality• Improve maternal health•Combat HIV/Aids, Malaria and other

diseases•Ensure environmental sustainability•Develop a global partnership for

development

http://www.youtube.com/watch?v=SaCMHoq7MCg

Measuring Development

How do we define development?•World Bank classification by Per Capita

Gross National Income – Growth Rate•Capabilities Approach – A.K. Sen•Development and Happiness – Bhutan

Human Development Index

•HDI takes into account (pg.49-56)▫GDP PC (PPP)▫Life Expectancy▫Education

•HDI = 1/3 (Income Index) + 1/3 (Life Expectancy Index) + 1/3 (Education Index)

Human Development Index

Income Index=log(current income) – log(100)log(40,000) – log(100)

Life Expectancy Index=current life expectancy – 25 years

85-25

Human Development Index

Education Index is made up of two parts:

Adult Literacy Index=current adult literacy - 0

100 - 0

Gross Enrollment Index=current gross enrollment

100 - 0

Human Development

Education Index =

2/3(Adult Literacy Index) +

1/3( Gross Enrollment Index)

Human Development Index

•HDI now equals HDI=

1/3(Income Index)+

1/3(Life Expectancy Index)+

1/3(Education Index)

Human Development Index

•Calculate HDI for India:▫GDP PC (PPP)= 3,460▫Life Expectancy= 64 years▫Adult Literacy= 70▫Gross Enrollment= 65%

Common Characteristics of Developing Countries(pg. 56-71 Todaro)•Lower levels of living and productivity•Lower levels of human capital•Higher levels of inequality and absolute

poverty (fig. 27)•Higher population growth rate•Greater social fractionalization•Large rural populations (migration)•Lower levels of industrialization

Common Characteristics of Developing Countries•Adverse geography or resource endowment•Underdeveloped financial market•Colonial impact•External dependance•Role of public – Private sector(Exercise – Are living standards of developed

and developing countries converging? Read 78-81 and write 2 paragraphs) Due next class