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DEVELOPMENT. Chapter 10. Key Question :. HOW DO YOU DEFINE AND MEASURE DEVELOPMENT?. MEASURED DEVELOPMENT. Definition : “To say a c o untry is developing is to say progress is being made in technology, production, and socioeconomic welfare.”
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DEVELOPMENT Chapter 10
Key Question: HOW DO YOU DEFINE AND MEASURE DEVELOPMENT?
MEASURED DEVELOPMENT • Definition: “To say a country is developing is to say progress is being made in technology, production, and socioeconomic welfare.” • Definition: “The extent to which the resources of an area or country have been brought into full productive use.” • “It may also have the implications of economic growth, modernization, and improvement in levels of material production and consumption.” • The idea of development since Industrial Revolution: technology can improve the lot of humans
MEASURING DEVELOPMENT Gross NATIONAL Product (GNP) Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year. Includes all things produced inside and outside a country’s territory. Gross National INCOME (GNI) A measure of the monetary worth of what is produced within a country plus the income received from investments outside the country. ** Most common measurement used today. Gross DOMESTIC Product (GDP) Measure of the total value of the officially recorded goods and services produced by the citizens and corporations within a country’s borders in a given year.
Reasons For Underdevelopment • Brandt Report : Development is a characteristic of the rich “North.” (the Mid-latitudes)/ poverty and development are tropical conditions • Richest 30 countries have 93% of their population in non-tropical environments. • Poorest 42 states have 56% of population in tropical environments. • Problem: Nations like Afghanistan, North Korea, Mongolia are mostly in non-tropical north. • Resource Poverty • Reliance on natural resource wealth • Overpopulation • Problem: Singapore is a rich country – 6800 people per square kilometer; Mali is a poor country with 9 people per square kilometer • Former Colonial Status
ISSUES WITH MEASURING ECONOMIC DEVELOPMENT • All measurements count the: • FORMAL ECONOMY: the legal economy that governments tax and monitor. • All measurements do not count the: • INFORMAL ECONOMY:the illegal or uncounted economy that governments do not tax or keep track of. (Can be black market/ street vendors/ tour guides…)
Other Ways Of Measuring Development • Occupational Structure of the Labor Force • High in food production – low development • High in high tech industries – high development • Productivity per Worker • More productive indicates higher level of mechanization • Transportation and Communications Facilities per Person • Dependency Ratio • Number of dependents each 100 people employed must support • Other development measuring tools • Literacy rates, infant mortality, life expectancy, % of income spent on food, etc…
DEPENDENCY RATIO BY COUNTRY, 2005 A measure of the number of people under the age of 15 and over the age of 65 that depends on each working-age adult.
What Does Development Mean? • Development implies “progress” • Progress in what? • Do all cultures view development the same way? • Do all cultures “value” the same kinds of development?
Development Models MODERNIZATION MODEL: WALTER ROSTOW’S MODELassumes all countries follow a similar path to development or modernization, advancing through five stages of development, climbing a ladder of development. Called the LADDER OF DEVELOPMENT 1. TRADITIONAL: subsistence agriculture and rigid and unchanging social structure) 2. PRECONDITIONS OF TAKEOFF: good leadership and diversification. 3. TAKEOFF: Industrial Revolution: Urbanization & Industrialization. 4. DRIVE TO MATURITY: Technological diffusion & specialization. 5. HIGH MASS CONSUMPTION: High incomes & wide-spread production – service oriented jobs
PROBLEMS WITH ROSTOW • ASSUMPTIONS: • All countries will move through the same process of development. • Based on a Western Bias – some things we view as progress would be viewed differently in other parts of the world • Provides no context to development. Should we view development more in relationship to what is happening in the rest of the region or world? • If all move up the ladder in the same way, what role does culture play?
Is the idea of Economic Development inherently Western? If the West (North America & Europe) were not encouraging the “developing world” to “develop,” what would people in the regions of the “developing world” think about their own economies?
KEY QUESTION HOW DOES GEOGRAPHY AFFECT DEVELOPMENT?
DEPENDENCY THEORY : A form of Structuralist Theory (the idea that economic disparities are built into the system) people built, organized, and structured the world economy in a way that can’t be easily changed) • The political and economic relationships between countries and regions of the world control and limit the economic development possibilities of poorer areas. • - Economic structures make poorer countries dependent on wealthier countries (based often on policy of Colonialism/Imperialism) • - There is little hope for economic prosperity in poorer countries.
Challenge to Dependency Theory • Some traditionally “dependent” countries have made economic gains. • Also based on assumption that don’t take into consideration culture and politics
DOLLARIZATION – Abandoning the local currency of a country and adopting the dollar ($) as the local currency. Example: El Salvador went through dollarization in 2001
Geography and Context * Cannot simply study what is produced. * Need to examine how and where it is produced and where the production is on the commodity chain. * Examine commodity chains and look for the kinds of economic processes operating at each link in the chain.
WALLERSTEIN’S WORLD SYSTEMS THEORY • Sensitive to geographical differences and the relationships among development processes that occur in different places. • Three-tier structure
Commodity Chain Series of links connecting the many places of production and distribution and resulting in a commodity that is then exchanged on the world market. How did processes operated at each step in the commodity chain that produced the dolomite stone for this fireplace?
THREE TIER STRUCTURE CORE Processes that incorporate higher levels of education, higher salaries, and more technology. * Generate more wealth in the world economy. PERIPHERY Processes that incorporate lower levels of education, lower salaries, and less technology. * Generate less wealth in the world economy. • SEMI-PERIPHERY • Places where core and periphery processes are both occurring. Places that are exploited by the core but then exploit the periphery. • Serves as a buffer between core and periphery. • Existence of this level leads people to believe that it is possible to move out of the periphery to the core.
Can All Countries Be Developed? • In a capitalist world economy, it is not possible for the entire world to experience the same level of wealth????
Compare And Contrast Rostow’s Ladder Of Development With Wallerstein’s Three-tier Structure Of The World Economy.
KEY QUESTION What are the Barriers to, and the Costs of, Economic Development?
Barriers to Economic Development • Low Levels of Social Welfare • ½ the population under 15 • Lack of health care, public sanitation, drinking water • Very little education – especially for girls • Trafficking • Foreign Debt • Structural adjustment loans – loans in exchange for reforms in economy and/or government • Problem: Spending a large percentage of money on paying back foreign debt makes is difficult to make other necessary reforms • Often, cost of servicing debt exceeds revenue • Political Instability • “without wealth, a country cannot maintain a liberal democracy” • When governments are corrupt, foreign funding is often cut off • Widespread Disease • Vectored diseases : those spread by one host (person) to another by an intermidiate host or vector • Malaria: kills 150,000 children in the global periphery each month; 2 to 3 million die yearly from malaria
FOREIGN DEBT OBLIGATIONS: Total interest payments compared to the export of goods and services.
FOREIGN DEBT OBLIGATIONS Foreign Debt and Economic Collapse in Buenos Aires, Argentina, 2001
WIDESPREAD DISEASE • Malaria kills 150,000 children in the global periphery each month. Tamolo, India This baby sleeps under a mosquito net distributed to villagers by UNICEF workers.
Global Distribution of Malaria Transmission Risk
Costs of Economic Development • Industrialization • Export Processing Zones (EPZs) – favorable trade, tax and regulatory arrangments – 60 countries • Maquiladoras (20% of Mexico’s entire work force), and special economic zones (SEZs). • Agriculture • In Peripheral countries, food production typically focuses on personal consumption or on production for a large agricultural conglomerate. Little produced for local marketplace (poor distribution and poverty) • Little protein produced • Soil erosion (no fertilizers or education) • Desertification – often caused by humans destroying vegetation and eroding soils through the overuse of lands for livestock grazing or crop production • Tourism • Does bring some wealth and employment • Negative effects on cultures and environments. • Money spent on tourism, not infrastructure • Most owned by multinational corporations – profits leave • Tourist industry typically pays low wages • Makes for an interesting cultural landscape
Key Question WHY DO COUNTRIES EXPERIENCE UNEVEN DEVELOPMENT WITHIN THE STATE?
How Government Policies Affect Development • GOVERNMENTS • Get involved in world markets • Price commodities • Affect whether core processes produce wealth • Shape laws to affect production • Enter international organizations that affect trade • Focus foreign investment in certain places • Support large-scale projects
Governments & Corporations can create Islands of Development Places within a region or country where foreign investment, jobs, and infrastructure are concentrated.
A Government-created Island of Development Malaysian government built a new, ultramodern capital at Putrjaya to symbolize the country’s rapid economic growth.
Corporate-created Island of Development The global oil industry has created the entire city of Port Gentile, Gabon to extract Gabon’s oil resources.
Non-Governmental Organizations (NGOs)Entities that operate independent of state and local governments, typically, NGOs are non-profit organizations. Each NGO has its own focus/set of goals. Microcredit program loans given to poor people, particularly women, to encourage development of small businesses.
How Do Actors In Nongovernmental Organizations (NGOs) Mobilize Political Change? An Indonesian woman (on left) who migrated to Saudi Arabia as a guest worker talks with an Indonesian activist (on right) who works to defend migrant workers’ rights.
Choose an item of clothing out of your closet, and, using the Internet, try to trace the commodity chain of production. What steps did the item go through before reaching you? Consider whether core or peripheralprocesses were operating at each step and consider the roles governments and international political regimes played along each step.
