What is development?

1. What is development? Which criteria can we use to measure development? Criteria for development: GDP education life expectancy health urbanisation income distribution industrialization literacy infant mortality sector employment

2. Classifications 1950s: First World: Western Europe, North America, Australia, New Zealand, Japan Second World: Communist countries like the former USSR Rest of the world Third World: Less Developed Countries 1960s/70s: Developed Countries did not include social and political development too simple 1980s: North (developed world) South (less developed world) still too simple oil rich countries? South Korea?

3. since the 1990s: - Economically More Developed Countries (EMDCs) e.g. Europe, USA high standard of living - Economically Less Developed Countries (ELDCs) lower quality of life - Centrally Planned Economies (CPEs) - Oil Rich Countries (ORCs) e.g. Saudi Arabia, Lybia without oil, many of these countries would be ELDCs - Newly Industrializing Countries (NICs) rapid industrial, social and economic growth in the last few decades

4. Measuring development most common: GDP per capita in $ but: does not take into account: - wealth and income distribution - local costs of living - health, e.g. life expectancy - education: literacy, schooling - social and environmental standards - regional variations (regional disparities) - informal (unregistered) economy World Bank: Purchasing Power Parity (PPP) instead of GDP in $ level of GDP adjusted to local costs of living

5. United Nations: Human Development Index includes 3 indices of well-being: - life expectancy - literacy and schooling - GDP(PPP) not included: - access to drinking water - infrastructure - human rights - environmental standards - internet access - arable land - .......

6. Characteristics of ELDCs (developing countries) - large proportion of the workforce engaged in primary industries (esp. rural sector) - large proportion of the live in rural areas - rapid population growth - low standard of living (low PPP/head) - low life expectancy - high infant mortality rate - low manufacturing production - child labour - high illiteracy rates - bad governance

7. Development strategies e.g. India 1947 Nehru Ghandi Prime Minister in 1947 aim: self-sufficiency in rural villages in food, clothing and housing large-scale industrial development belief: spinning-wheel! benefits of growth would trickle down to rural areas (e.g. through more demand for agricultural products) this did not happen!

8. from the 1970s: series of Rural Development Programmes very limited success because of centralized, large-scale planning better approach: de-centralized planning which takes into account the needs, ideas and resources of the local people and environment from the 1990s: liberalization of the economy attraction og FDI (foreign direct investment) successful high growth rates but still: little improvement for the poor

9. Why do certain regions prosper? Natural advantages: - water, fertile land and other natural resources (oil, ore etc) - location market access (e.g. sea ports) - labour supply Acquired advantages: - infrastructure, also: good suppliers - skilled workforce - state support (subsidies, tax incentives etc.) attraction of more and more investment "growth poles" hope for "spread effects" core area stimulates growth in surrounding areas but: such "growth poles" do not benefit rural areas with low population density

10. Characteristics of NICs - high growth rates in manufacturing production - increasing proportion of the workforce work in manufacturing industries - improvement in social infrastructure (schools, hospitals etc.) higher life expectancy decreasing illiteracy rate/increasing rate of university students - increasing exports of manufacturing goods - increasing use of technical devices in households (e.g. electrcal appliances, PCs, internet) - increasing productivity, but still low wages/bad working conditions - still low environmental standards Main groups of NICs: - Asian "Tigers" such as Hong Kong, Singapore, South Korea, Taiwan - Latin American NICs such as Brazil and Mexico - China, India

11. India: an NIC or still an ELDC? ELDC NIC - more imports than exports - growing manufacturing and service sector (agricultural sector declining) - big gaps between rich and poor - very large agricultural sector - migration from rural to urban areas - 60% of the population are illiterate - high growth of GDP per capita - birth rate exceeds death rate - improving standards of education - insufficient/unjust pension system - death rates much lower than birth rates stage II of DTM - use of new technology (e.g. wind turbines) - internet ratio 18/1,000 (increasing)