The Development Gap

1. The Development Gap What do you need to know?

2. What are the traditional ways of dividing up the world? First, second, third and fourth worlds • Europeans saw themselves as the first world; the wealthier regions they colonised were the second world; and poorer countries were the third world. • The very poorest then became the fourth world. • BUT there was no place for Communist countries, which were added into the second world group

3. The North-South divide • In 1971 the Brandt Report was published, which was about the state of world development. • A simpler division was made, which contrasted economically wealthier and industrialised countries with poorer and mainly agricultural ones. • A line was drawn, called the North-South divide, and GNP per capita was used. • It was, however, found to be just too simple.

4. LEDCs and MEDCs • This was used for a long time but since the late 20th century many LEDCs have grown more rapidly than most MEDCs • A new category had to be introduced to cover those developing fastest (like China and South Korea) – they were called newly industrialising countries (NICs) • The LEDC/MEDC division is therefore much less useful than it was

5. The five-fold division based on wealth • These divisions are entirely based on wealth: • Rich industrialising countries e.g. The UK • Oil-exporting countries e.g. The UAE • Newly industrialising countries e.g. China • Former Communist countries e.g. Russia • Heavily indebted poor countries e.g. Kenya

6. This still isn’t perfect because: • China is a newly industrialising country BUT has a Communist government • Many oil-exporting countries (like the UAE, Saudi Arabia and Libya) have earned huge amounts of money from oil but the wealth is mainly shared between a few, and the majority of the country remain poor

7. How can we measure development? • We can use a range of measures (indicators) of development which will tell us much about a country • Any indicator that tells us about wealth, poverty or economic development should correlate with similar indicators

8. Development indicators are interrelated, for example- 45%- Employed in Primary agriculture $1,600- GNP 47%- Literacy rate 0.26 per 1000- Doctors 58 per 1000- Infant mortality 60 years- life expectancy

9. Some correlations will be positive:as GNP per capita increases, so do female literacy rates

10. Some will be negative: as GNP per capita increases, the number of babies born per female decreases

11. Several indicators of development must be used together to gain a clear picture of a country’s development: • GNP or GNI per capita are only measures of wealth so give no clear idea of people’s personal living standards • All indicators are averages and so a single figure hides the extreme wealth or poverty that may exist • A broader view of both economic and social development is therefore needed

12. Human Development Index (HDI) • This is based on: • Life expectancy at birth – this is an indicator of health • Adult literacy - this is an indicator of the level of education , and therefore an indicator of its future potential • Gross Domestic Product per capita (GDP) – this is an indicator of standard of living Maximum HDI = 1 Wealthy countries have an HDI of over 0.9 whereas poorer countries are around 0.5 or less

13. The Human Development Index

14. Physical Quality of Life Index • This uses the average of literacy rate, life expectancy and infant mortality • It therefore uses only social measures of well-being • It measures peoples’ quality of life and not just their standard of living HDI should be used with PQLI to give a complete picture

15. Many people in the poorest parts of the world are attempting to improve their own quality of lives: • People who live in squatter settlements like Kibera (Nairobi) and Rocinha (Rio de Janeiro) are building their homes of brick and making them more permanent • Many people are using their initiative and starting small businesses to earn more money e.g. charcoal sellers, samosa sellers, etc. • Money is limited to pay for education and health, but most people do whatever they can so that they can provide these basic needs for their children

17. What factors make global inequalities worse?

18. Physical factors: • Climatic hazards e.g. drought in Ethiopia • The problems of a landlocked country which has no trading ports e.g. Afghanistan • Climate-related diseases e.g. malaria, which is one of the biggest killers in sub-Saharan African countries like Kenya

19. Economic factors: • Poverty causes poverty: countries with the lowest standard of living have little hope of ever developing and expanding e.g. Burkina Faso • Civil war, or conflicts with other countries, mean money is spent on weapons and not healthcare and education e.g. in Sierra Leone

20. Global trade rules are also unfair: • They favour the richer countries, who place tariffs (taxes ) on exported raw materials from the poorer countries, and imported manufactured goods from the richer countries

21. Social factors: • Poor water quality causes diseases like cholera, which makes people weak and stops them working • If water supplies are inadequate then crops will not grow • If people are not educated then they cannot earn good money, and companies are unwilling to set up factories in the country • If healthcare is poor then people get sick and cannot work hard

22. Political factors • Corrupt politicians take money illegally from the government at the expense of the country’s development • These governments are unstable, and foreign investors and countries giving aid are unwilling to give money to the country • Zimbabwe is a classic example of a country where the government has spent its money ensuring it stays in power

23. You need to learn a case study of the impact of a natural hazard on a country’s development

24. e.g. the earthquake in Haiti in 2010: • Many homes, schools, roads etc. were destroyed and money which would have been spent on improving things like education has to go into rebuilding: the cost of this rebuilding is estimated to be as much as $14 billion, or 15% of Haiti’s GDP. • As children are unable to go to school until schools have been rebuilt, adult literacy rates will go down • People have no jobs as businesses such as those in the capital Port-au-Prince have been destroyed, so GDP will go down • Average life expectancy rates will decrease as 230,000 people died in the earthquake and many more will die as a result of diseases like cholera which have since spread in the refugee camps

25. How can global inequalities be reduced by international efforts?

26. 1. Loans • A country in need of funds for development projects can borrow money from other countries, international banks or world financial institutions e.g. IMF • If the project is a success the debt will be repaid • Often the country does not meet the debt repayments, however, and so get into even more debt • Standards of living will therefore never improve

27. 2. Debt relief • An advantage for the receiving country is that they have more money available now to spend on education, healthcare etc. • An advantage for the donor country is that they feel good and it improves relationships with the receiving country • A disadvantage for the donor country is that often they are in debt themselves and need these repayments • A disadvantage for the receiving country is that they are less likely to be loaned money in the future

28. 3. Conservation swaps • Also called ‘debt-for-nature swaps’ e.g. Guatemala had $15million of its debt to the USA written off but in return they agreed to conserve large areas of cloud and rain forest, and so protect endangered habitats Guatemala will have more money available for education etc in the country, plus its environment will benefit as well

29. 4. Micro-enterprises • The technology is appropriate • Small business is the basis for any economy • It employs many people and supports their families

30. 5. Fair trade • Farmers get a minimum guaranteed price plus a fair trade ‘premium’ which is money to spend on development projects in the local community e.g. in St. Lucia, where some of the fair trade bananas are grown, fresh water has been supplied to villages and primary schools and health centres have been built • Farmers usually have to join co-operatives (groups) however which sometimes restrict what they can and can’t do

31. Trading groups e.g. The Africa Free Trade Zone • The deal will make it easier for them to access markets within the region • It will end problems created from the fact that several countries belong to multiple trading groups already set up in Africa • The deal also aims to strengthen the group’s bargaining power when negotiating international deals. Member states will therefore be able to have more control over the price of goods they export • It will also make it much more difficult for richer countries to shop around for cheaper goods, as all countries of the trading group will have the same price for their goods

32. 6. Aid • There are many different types of aid: • Short-term aid • Long- term aid • Bilateral aid • Multilateral aid • Top-down aid • Bottom-up aid You need to know what they mean, the advantages and disadvantages of different types of aid, and give an example of some of them!

33. e.g. Short-term aid: This aid can provide immediate help and save lives, but often organisations are unable to release the money to where it is needed for various reasons e.g. in Haiti, 6 months on $1.1 billion worldwide had been collected for relief efforts but only 2% of the money had been released

34. e.g. Bottom-up aid: e.g. CAMFED (Campaign for Education) train women in communities to use a computer, and these women then start businesses and train others, providing them with skills to earn money e.g. Practical Action have built small hydro-electric schemes in villages in Peru which provide the villages with renewable energy, and so all the benefits of electricity are realised

36. You need to know a case study of how successful a development project has been • These should be a scheme like Practical Action’s work in Peru, or Action Aid’s work in Kolkata (Calcutta), or Student Partnership Worldwide’s work in Uganda • They are sustainable: • They often involve renewable energy • They use appropriate technology • They provide people with work and skills so their lives – and those of their children - can be improved Learn some facts about them!

37. The European Union: how do levels of development vary? • You need to know what conditions have led to different levels of development in two countries of the EU

38. The UK • Ranks 16th on the world HDI list with a GDP (average earnings) per capita of $33,000 • We had a large colonial empire and earned huge amounts of money from this during the 19th and early 20th centuries, so we were able to develop our healthcare, education etc. • We had an Industrial Revolution during the 19th Century which also made us a very wealthy country with a strong manufacturing base • Our physical geography means we have a mild climate, few natural disasters and good quality soil to grow crops in many areas

39. Poland • Ranks 37th on the world HDI list with a GDP per capita of $14,000 • It suffered catastrophic damage to its infrastructure during WWII • Over 20% of its population died during WWII • The Communist leadership after WWII slowed growth down and Poland did not keep up with Western market economies • Huge food price increases in the 1970s led to strikes and protests • Poland is still predominantly an agricultural economy where people are paid less

40. The EU has attempted to reduce these differences in development:

41. The Common Agricultural Policy • It guarantees the survival of rural communities, especially in places like Poland and Portugal • BUT it costs over half of the total EU budget a year and only generates 1.6 % of the EU GDP

42. Urban II Fund • It aims to provide economic and social regeneration • It includes schemes that will renovate older buildings, develop environmentally-friendly transport systems and make greater use of renewable energy

43. Structural Funds • Regions whose GDP is less than 75% of the EU average are targeted • The aim is to improve their economic development so they catch up with other regions • Together with the CAP this uses up most of the EU budget, but many regions in places like Scotland and Poland have benefitted