Chapter 9

“Part 1 - Development”

• The gap is widening between the rich (MDCs) and poor (LDCs).

• A Country’s wealth is visible:

• …

• …

• …

• …

• A rich country has its wealth spread throughout most of its population.

•Places like New Delhi, Mexico City, Rio de Janeiro all have impressive buildings and homes, BUT the vast majority of people do not share in this wealth.

• Most of the wealth is in the hands of a few individuals and in the hands of ‘Multi-nationals’ or ‘Trans-Nationals’.

• In order to get a clearer picture of the differences between the MDCs and the LDCs we need to do some measurements and observations. There are three types of Indicators for Development: Economic, Social and Demographic.

The United Nations (UN) – uses a number of ‘indexes’ (An index is usually a number out of 1, the closer to one the better) to illustrate the level of development. I will now list the 4 major ones. The first one is the most important and uses one number to give an indication of a countries Economic, Social and Demographic all in one number.

1. HDI: Human Development Index. …

A. …

B. …

C. …

An example could be for the last one could be “The Big Mac Index” – The relative cost of a Big Mac in various countries.

Helps measure - Income poverty. How far your money will go?

2. HPI: Human Poverty Index.

A.…

B.…

C.…

Development Index - what you have

Poverty Index - what you don’t have

3. GEM: (Gender Empowerment Measure). …

4. GDI: (Gender-related Development Index). …

•The above two are more social indicators

• Canada in 2000 was 3rd in the world in GDI and 6th in GEM.

• Canada has an HDI of 0.961 and is ranked 10th in HPI.

• Both HDI and HPI are used to measure the gap between rich and poor.

Human Development Index

Developed by the United Nations, the HDI combines several measures of development: life expectancy at birth, adjusted GDP per capita, and knowledge (schooling and literacy).

HPI: Human Poverty Index

The further you are from the value ‘one’ the wider the gap between rich and poor is another way to look at HPI.

Gender Empowerment Measure (GEM)

The GEM combines two measures of economic power and two of political power by women. (Little data are available for LDCs.)

Gender-Related Development Index (GDI)

The GDI combines four measures of development, reduced by the degree of disparity between males and females.

Some Definitions:

• Absolute Poverty: …

• Relative Poverty: …

• Human Poverty: …

• Income Poverty: …

The Findings:

• …

• …

• …

• …

• …

• …

• …

• …

• …

Economic Indicators of Development:

1. GDP/GNP (per capita): …

2. Types of Jobs: Primary, Secondary, Tertiary, Quaternary, Quinary

Primary – …

Secondary - …

Tertiary – …

Quaternary – …

Quinary – …

Many texts do not use the last two and include these jobs all under Tertiary.

Employment Changes by Sector

Percentage employment in the primary, secondary, and tertiary sectors of MDCs has changed dramatically, but change has been slower in LDCs.

3. Raw Materials: coal, iron ore, oil etc.

4. Consumer Goods: cars, telephones, etc

Social Indicators to Development:

1. Education and Literacy:

2. Health and Welfare:

Demographic Indicators of Development:

1. Life Expectancy:

2. Infant Mortality Rate:

3. Birth and Death Rate and Natural Increase Rate:

Relates to Productivity

Value Added: gross value of a product minus the cost of raw materials and energy (the cost to make it).

Annual GDP per Capita

Annual gross domestic product (GDP) per capita averages over $20,000 in most developed countries but under $5,000 in most less developed countries.

Economic

Telephones per Population

Mean telephone lines per 1,000 persons, 2002. MDCs have several dozen phone lines per 1,000 persons, while the poorer developing countries may have less than 10.

Economic

Calories per Capita

Daily available calories per capita as percent of requirements. In MDCs, the average person consumes one-third or more over the required average minimum, while in LDCs, the average person gets only the minimum requirement or less.

Economic

Persons per Physician

There is a physician for every 500 or fewer people in most MDCs, while thousands of people share a doctor on average in LDCs.

Economic and Social

Student-Teacher Ratios

Students per teacher, primary school level. Primary school teachers have much larger class sizes in LDCs than in MDCs, partly because of the large numbers of young people in the population (Fig. 2-15).

Social

Natural Increase Rates

The natural increase rate (NIR) is the percentage growth or decline in the population of a country per year (not including net migration). Countries in Africa and Southwest Asia have the highest current rates, while Russia and some European countries have negative rates.

Demographic

Crude Birth Rates

The crude birth rate (CBR) is the total number of births in a country per 1,000 population per year. The lowest rates are in Europe, and the highest rates are in Africa and several Asian countries.

Demographic

Crude Death Rates

The crude death rate (CDR) is the total number of deaths in a country per 1,000 population per year. Because wealthy countries are in a late stage of the demographic transition, they often have a higher CDR than poorer countries.

Demographic

A breakdown of Development by regions of the World

More and Less Developed Regions

The less developed regions include Latin America, Sub-Saharan Africa, Middle East, South Asia, East Asia, and Southeast Asia.

Some facts:

• 20% of the world’s population has 86% of the world’s GDP, 82% of all the export markets, 68% of all the investments and 74% of all the telephones.

• In 1998 the percentage share of the worldwide market for the rich was:

- Telecommunications – 86%- Pesticides – 85%- Computers – 70%

All in the hands of Europe, Japan and North America!

Anglo America – HDI – 0.94•English – unified in language•Christian – mostly unified in religion•Minerals and natural resources – eg. Steel•Modern agriculture – major exporter•Technologically advanced – computers, communications etc.•Headquarters for the majority of Trans-Nationals (Multi)•Mainly Tertiary•Losing manufacturing jobs – globalization•Strong connection (colonies-immigrants) to Western Europe•Eg. Canada, USA

Western Europe – HDI – 0.94•Much more unified today – European UnionEconomic, Culture, Military, Politics – unity•Mainly Christian – Hindu and Muslim immigration has caused problems – Guest workers/Time contract workers•Past colonial powers•Tourism•Banking•Luxury goods – clothing, cars etc•Core – Germany, France, U.K., Northern Italy•Periphery – Southern Italy, Portugal, Spain, Greece•Large importer of food, energy and minerals•Technologically advanced•Eg. U.K.(Great Britain), France, Germany, Italy

Eastern Europe – HDI – 0.78•HDI dropping – collapse of communism•Past - Communism was meant for industrialized nations and workers not agricultural societies thus its HDI was higher during communist rule•Government under communism ran everything – used 5 year plans (Gosplan) – these plans stressed heavy industry and located plants near raw materials NOT consumers and huge military spending – paying for this today. Communism was so interested in showing the world that it forgot its citizens!

Eastern Europe – HDI – 0.78 - continued•Present – Freedom, no investment in technology, insufficient farming (import food), government was to centralized, consumer products were ignored.•A lot of countries have broken up – ethnic conflict - Balkans•High unemployment•Crime, pollution•Some countries doing well – Hungary, Poland, Ukraine•Eg. Slovenia, Hungary, Czech Reb., Serbia, Bosnia, Poland

Japan – HDI – 0.93•Strong cultural unity and tradition•Rapid development since WW2•No raw materials•Intense farming•Hard, efficient, proud workers•High in technology and electronics•After WW2 the plan was:

oWork hard – low wagesoProduce goods at cheap pricesoGain a share of the marketoSpecialize in high quality, high value goodsoIt Worked!

South Pacific – HDI – 0.93•Few people•Peripheral location•Colonial influence•Close ties to Great Britain•Eg. Australia and New Zealand

Latin America – HDI – 0.78•Spanish, Portuguese influence•Roman Catholic•Highly populated urban centers – Mexico City, Sao Paulo, Buenos Aires•Majority of Population on Atlantic coast•Agriculture is strong – mainly export – coffee, tea and fruit•Inequitable income distribution•Large property owners•Peasant farming•Issue of unrest and strong ‘socialist’ views•Tourism•Eg. Mexico, Belize, Costa Rica, Brazil, Argentina

East Asia – HDI – 0.72•China – initially poor and mostly agricultural – Strong emerging country – it has the potential to surpass the US – large population is a hindrance – One child policy – population control•In 1949 – Communism re-organized the country into stressing Agriculture – It worked!•Becoming more capitalist – more incentive to work harder•Government still controls everything•Markets are opening up!•The Future•Eg. China, Korea (North and South), Mongolia

Southeast Asia – HDI 0.71•Indonesia – largest population – 13 667 islands – 2/3 of people on the island of Java•A lot of wars – Vietnam, Laos, Cambodia•Mainly rural•Climate – Tropical – inhibits a variety of crops to be grown•Rice is key•Agricultural products that are not food - like coconut oil, natural rubber and fibers from trees (used in making fabrics)•Food is grown for export not for citizens – kiwi, pineapple, bananas etc.•Eg. Indonesia, Philippines, Vietnam, Malaysia, Thailand, Singapore – But – especially the last two – growing in manufacturing (textiles) – offer cheap labour

Middle East – HDI – 0.66•Mainly dry – desert•Oil (Petroleum) rich – trade surplus•Lots of money and potential for economic development•Countries like Egypt, Jordan, Syria do not have oil•Wars and conflicts is key in this area – Israel, Palestine (not a country), Iraq, Iran, Syria, Lebanon, Kuwait, Afghanistan •Development (US) vs. Islam - Terrorism•Role of women an issue – created an AHDI for women (Alternate HDI) – lack of political freedom, low education, low literacy rates, lack of opportunities.•Eg. Israel, Egypt, Iraq, Iran, Saudi Arabia, Libya

South Asia – HDI – 0.58•Large population•Low per capita income•India has raw materials but population is too high – Jute (burlap and twine), peanuts, sugar cane and tea•India also has a large educated population that speaks English – migration to North America and outsourcing of work – Internet support•Green Revolution – rice and wheat•Climate – Agriculture – depends on Monsoon (seasonal rains May-August)•Eg. India, Pakistan, Bangladesh

Sub-Saharan Africa – HDI – 0.47•Northern Africa considered part of Middle East•South of Sahara – extremely poor – poorest in the world•Colonial influence – location of boundaries and lack of an infrastructure•Issues of malnutrition, starvation, Aids, tribal and ethnic conflict, corrupt leaders•Some raw materials – oil, bauxite, copper, uranium•Land locked states•Climate and land cannot support the # of people (land is overworked) – Malthus•Simple farming methods•Highest Natural Increase in the world•Eg. Kenya, Nigeria, Chad, Ethiopia, Ivory Coast, Angola, Zambia, Sudan, Rwanda – South Africa (an economic exception – mining, colonial influence)

Measuring levels of Poverty

Maslow's Level of Human Needs:

Physical Needs

Security

Love & Acceptance

Esteem

Self-Actualization

End of Part 1