The Developing World

Ch. 2 Sec. 3

World Economic Patterns• Interdependence:

– During Age of Imperialism, Western powers seized control of global market– Forced colonies to switch from subsistence agriculture to cash crops

• Sold manufactured goods to colonies– Post independence: many former colonies still depend on Western nations

for manufactured goods• Livelihood depended on production of one specific crop

World Economic Patterns• Modernization:

– Political stability • Obstacles: Imperialists created nations regardless of clan, tribe or loyalty

– Economic diversity• Dependence on one good if the value of that good drops, economy plummets• Solutions:

– Tariff: tax on foreign goods encourages people to buy locally– Privatization: selling industries to private investors to encourage diversity + efficiency

– Infrastructure• Improve education, sewage and water systems, hospitals, law enforcement, etc.

The lingo: Previously: 1st, 2nd + 3rd worldNow: underdeveloped, developing, developed

Debt Crisis• Nations that could not afford

to modernize, borrowed – Interests rate rose, unable to

pay debts – Infrastructure suffers when

debts go unpaid

• Similar problems: – Price of oil soaring: developing

(and developed) nations can’t afford new prices

– Value of cash crops dropping on national market

Growing Pains• Population explosion:

– Better health care + sanitation, more food = bigger populations

– Leads to: poverty, unemployment, overcrowding

• Urbanization: – Growth of cities + migration to

cities– In developing nations: crime,

poverty, etc.