Transcript Slide 1

Development: The process of improving the
material conditions of people through diffusion of
knowledge and technology.
Stages of Development:
Less Developed Country/Developing Country
More Developed Country/Developed Country
Why Does Development Vary
Among Countries?
• Economic Indicators of Development
– Gross Domestic Product
• GDP in Developed Countries
–Average $27,000
• GDP in Less Developed Countries
–Average $4,000
Why Does Development Vary
Among Countries?
• Types of Jobs
– Primary Sector
– Secondary Sector
– Tertiary Sector
• JOB DISTRIBUTION VARYS BASED ON
DEVELOPMENT
Why Does Development Vary
Among Countries?
• Productivity
– Productivity is the value of a particular
object compared to the amount of labor
needed to make it.
– Value added is the gross value of the
product minus the costs of raw materials
and energy.
• Costs more to make things in the U.S. and
less in China.
Why Does Development Vary
Among Countries?
• Raw Materials
– Minerals and trees that can be
transformed into useful products.
– Energy is a raw material.
– More raw materials and energy, the better
the chances of development.
Why Does Development Vary
Among Countries?
• Social indicators of Development
– Education and Literacy
• MDC’s and Educ. vs. LDCs and Educ.
• Literacy Rate
– Health and Welfare
• Health in MDCs vs. LDCs
• Welfare in MDCs vs. LDCs
Why Does Development Vary
Among Countries?
• Demographic Indicators of Development
– Life Expectancy
– Infant Mortality Rate
– Natural Increase Rate
– Crude Birth Rate
Where are More and Less
Developed Countries Distributed?
• More Developed Regions
– Anglo-America
• Speak English, Worship Christianity
• Have natural resources for
manufacturing
• Food exporter
Where are More and Less
Developed Countries Distributed?
• More Developed Regions
– Western Europe
• Speak indo-European language,
worship christianity
• Somewhat unified
• Not all equally developed
• Import food, energy, and minerals
Where are More and Less
Developed Countries Distributed?
• More Developed Regions
– Eastern Europe
• Communism after 1917 in Russia and
after WWII in the rest
• More about manufacturing than
producing consumer goods
• Dumped communism in the 1990s
Where are More and Less
Developed Countries Distributed?
• More Developed Regions
– Japan
• Nearly no natural resources
• United people willing to work hard for
low wages.
• Skilled labor force
– South Pacific
• Australia and New Zealand
• Export food and resources
Where are More and Less
Developed Countries Distributed?
• Less Developed Regions
–Latin America
• Speak Spanish or Portuguese, Roman
Catholic
• Inequitable distribution of income
• Agricultural Productivity
Where are More and Less
Developed Countries Distributed?
• Less Developed Regions
–East Asia
• China – Second largest economy
• Communist
• Low wages for factory workers, drives
down wages world wide.
• Rapidly developing
Where are More and Less
Developed Countries Distributed?
• Less Developed Regions
–Middle East
• Speak Arabic, Muslim religion
• Oil/petroleum: creates “Haves” and
“Have Nots”
• Restrictions on women working
• Recognition of Isreal
• Terrorism
Where are More and Less
Developed Countries Distributed?
• Less Developed Regions
– Southeast Asia
• Tropical climate limits agriculture
• Grow things used in manufacturing
• Manufacturer of textiles
• Corruption of government officials
Where are More and Less
Developed Countries Distributed?
• Less Developed Regions
– South Asia
• India, Pakistan, Bangladesh, Sri Lanka,
Nepal, Bhutan
• Resources but huge population
• Agriculture
• India: the world’s fourth largest
economy
Where does Level of Development
Vary by Gender?
• Gender-Related Development Index
– GDI measures income, literacy, education,
and life expectancy and measures men
and women
– A score of 1.0 is a perfect GDI score.
– Norway is highest with a GDI of 0.96
Where does Level of Development
Vary by Gender?
• Economic indicator of Gender Differences
– Men make more money than women
• Social Indicators of Gender Differences
– Education
• In LDCs girls usually do not attend school
– Literacy
• Female literacy is usually low in LDCs.
Where does Level of Development
Vary by Gender?
• Demographic indicator of Gender
Differences
– Life expectancy
• Females live longer. Usually by about
six years.
• In LDCs women have more children
Where does Level of Development
Vary by Gender?
• Gender Empowerment
– GEM: measures the ability of women to
participate in improving their lives.
– Combines income and professional jobs.
– A score of 1.0 is perfect.
• MDCs have higher GEM scores
Where does Level of Development
Vary by Gender?
• Economic indicators of Empowerment
– Northern Europe has most women in
professional jobs.
• Political Indicators of Empowerment
– Women in politics
– More often in MDCs
– Worldwide around 20% of Politicians are
women.
– The US is around 15%
Why do Less Developed Countries
Face Obstacles to Development?
• Development through Self-sufficiency
– Elements of self-sufficiency
• Equal spreading of investment
• Rural and urban incomes are close
• Set barriers that limit imports. (tariffs,
quotas, licenses)
–Local created merchandise should be
cheaper
Why do Less Developed Countries
Face Obstacles to Development?
• Problems with the Self-sufficiency
Alternative
– Inefficiency
• Self-sufficiency protects ineffective
businesses.
• Lack of competition
– Large Bureaucracy
• Squashes opportunity
Why do Less Developed Countries
Face Obstacles to Development?
• Development through international trade
– Rostow’s Development Model
• Five stage model of Development
–The traditional society
–The preconditions for takeoff
–The takeoff
–The drive to maturity
–The age of mass consumption
Why do Less Developed Countries
Face Obstacles to Development?
• Development through international trade
– Rostow’s Development Model (cont.)
• Every country is at some level of
development
• A country that concentrates on
international trade benefits from
exposure to consumers in other
countries.
• Rostow’s model was optimistic.
Why do Less Developed Countries
Face Obstacles to Development?
• Examples of International Trade Approach
– The Four Asian Dragons
• Focused on only a few manufacturing
goods.
– Petroleum-Rich Arabian peninsula states.
• Oil has turned the area into a developed
region
• Islamic principles conflict with business
practices.
Why do Less Developed Countries
Face Obstacles to Development?
• Recent Triumph of the International Trade
Approach
– ITA is embraced by most countries
– World Trade Organization
• Works to even the playing field for all
countries
• Seen as anti-democratic and invasive of
national sovereignty
– Transnational Corporations
• Invest and operate in countries other than the
one they are founded in.
Why do Less Developed Countries
Face Obstacles to Development?
• Financing Development
– Loans
• LDCs need more money for
infrastucture
• International Monetary Fund
• The World Bank
• Build infrastructure and it will help
manufacturing
• Expensive and money gets stolen
• Many LDCs cannot pay back loans
Why do Less Developed Countries
Face Obstacles to Development?
• Structural Adjustment Programs
– An economic document that outlines
goals, strategies, and objectives for
achieving financial success.
Why do Less Developed Countries
Face Obstacles to Development?
• Fair Trade
– Fair trade producer Standards
• Fair trade: products are made and
traded according to standards that
protect workers and small businesses
in LDCs.
• Allows the little guy to compete against
the big guy.
Why do Less Developed Countries
Face Obstacles to Development?
• Fair Trade
– Fair trade Worker Standards
• Workers rights are not a high priority in
the International Trade Model.
• Fair trade sees that children are not
exploited, safety is present, workers are
paid a minimum wage.