Industrialization and Economic Development

1. Industrialization and Economic Development Chapters 10 and 12

2. Most populated cities Top 10

3. Tokyo 37.83 mil • Delhi 24.95 • Shanghai 22.99 • Mexico City20.84 • Sao Paulo 20.83 • Mumbai 20.74 • Lagos • Beijing 19.52 • NY City 18.59 • Cairo 18.41 Source: Mapsofworld.com

4. Tokyo, Japan

5. Tokyo, Japan

6. Mumbai, India

7. Mumbai, India

8. Lagos, Nigeria

9. Lagos, Nigeria

10. Sao Paulo, Brazil

11. Sao Paulo, Brazil

12. Mexico City, Mexico

13. Mexico City, Mexico

14. New York City, U.S.

15. New York City, U.S.

16. Karachi, Pakistan

17. Karachi, Pakistan

18. Dhaka, Bangladesh

19. Dhaka, Bangladesh

20. Shanghai, China 1990

21. Shanghai, China 2010

22. Kolkata (Calcutta), India

23. Kolkata (Calcutta), India

24. Development Chapter 10

25. Measuring Development Gross National Income (GNI) Measure of the monetary worth of what is produced within a country plus income received from investments outside the country. ** Most common measurement used today. 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 things produced inside and outside a country’s territory. Gross Domestic Product (GDP) 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.

26. Issues with Measuring Economic Development • All measurements count the: • Formal Economy – the legal economy that governments tax and monitor. • Core countries have a dominating formal economy. • All measurements do not count the: • Informal Economy – the illegal or uncounted economy that governments do not tax or keep track of. • Periphery and semi-periphery countries have a dominating informal economy.

27. 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. Countries that have a high dependency ratio will have a heavy top or bottom to their population pyramid. Countries want and need a low dependency ratio.

28. Dependency Theory The political and economic relationships between countries and regions of the world control and limit the economic development possibilities of poorer areas. * Neo-Colonialism (new-colonialism) -- Economic structures make poorer countries dependent on wealthier countries. • - Little hope for economic prosperity in poorer countries.

29. Dollarization – Abandoning the local currency of a country and adopting the dollar as the local currency. El Salvador went through dollarization in 2001

30. 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.

31. Links in commodity chains • Vertical Integration • A company trying to gain control over their suppliers • Horizontal Integration • A company acquiring or merging with competitors in the same industry value chain. ** What is one positive and one negative for integration of commodity chains?

32. The World Economy • What are examples of core countries? • What characteristics classify them as core? • What are examples of semi-periphery countries? • What characteristics classify them as semi-periphery? • What are examples of periphery countries? • What characteristics classify them as periphery?

33. Wallerstein’s 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

34. * All of this started with the Europeans exploring the world starting in the 1600s *

35. Human Development Index (HDI) • The HDI was derived trying to create a method of measuring development that attempts to include social and economic elements. • The HDI uses the following for its measurements: • Per capita GDP • Life expectancy • Literacy rate • Average years of education Sub-Saharan Africa has the lowest overall HDI ranking

36. Development Models Modernization Model Walt Rostow’s model assumes all countries follow a similar path to development or modernization, advancing through five stages of development, climbing a ladder of development. 1 traditional 2 preconditions of takeoff 3 takeoff 4 drive to maturity 5 high mass consumption * Goal is to reach the fifth and final stage of high mass consumption *

37. Rostow Modernization Model • Traditional: dominant activity is subsistence farming • Rigid social structure, resistance to change • Preconditions of Takeoff: progressive leadership moves the country toward openness and diversification

38. Rostow Modernization Model • Takeoff: Industrial Revolution, Urbanization, Mass-Production • Drive to Maturity: Tech. Diffusion, industrial specialization, international trade, modernization of core,pop. Decline

39. Rostow Modernization Model 5. High Mass Consumption: high income, widespread production of G&S, Service Sector

40. Rostow’s Ladder of Development The goal is to achieve high mass consumption

41. *Many nations are now past Stage 5. Create your owncolumn entitled High Technology, depicting themodern world.

42. What are the Barriers to and the Costs of Economic Development?

43. Barriers to Economic Development • Low Levels of Social Welfare • Foreign Debt • Political Instability • Widespread Disease

44. 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.

45. Costs of Economic Development • Industrialization • Export Processing Zones (EPZs) • Usually in the underdeveloped regions of developing nations • maquiladoras • Mexico/US border • Manufacturing centers • Cheap land and labor, low environmental standards • special economic zones (SEZs) • Free trade zones • Lower taxes • China • Agriculture • Deforestation • Tourism • Bringing people to your country • Maintaining infrastructure

46. Areas Threatened by Desertification

47. Why do Countries experience Uneven Development within the State?

48. 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

49. Governments and Corporations can create Islands of Development Places within a region or country where foreign investment, jobs, and infrastructure are concentrated.

50. Government-created Island of Development Malaysian government built a new, ultramodern capital at Putrjaya to symbolize the country’s rapid economic growth.