Development

Chapter 9

Children in Lundazi District of Zambia

Key Issue 1: Why does development vary among countries?

HDI – Human Development Index– Economic - GDP Per capita– Social – literacy rate and amount of education– Demographic – life expectancy

Human Development Index

Gross Domestic Product Per Capita

GDP – the value of the total output of goods and services produced in a country during the year– Per capita = per person

GDP per capita shows an individuals contribution to generating a country’s wealth

GDP Per Capita

GDP in MDCs vs. LDCs

GDP per capita exceeds $20,000 in MDCs LDC are in the $1,000 range

Problem – GDP per capita is an average, doesn’t reflect all citizens, and doesn’t necessarily reflect quality of life

Why? – Types of Jobs

Per capita income is higher in MDCs because of the way people earn their living

Sectors of the economy:– Primary – LDC 75%, MDC less than 5%– Secondary– Tertiary

Primary Sector

Directly extract materials from the Earth Examples: Agriculture, mining, fishing,

forestry

Secondary Sector

Manufacturing of raw materials into useful products

Pencil factory

Tertiary sector

Providing goods and services to people in exchange for payment

Productivity

Workers in MDCs are more productive with less effort

Why? – Technology, mechanization

Planting crops in Kenya

Raw Materials

Development requires access to raw materials AND energy resources

Consumer Goods

After buying essential goods (food, clothing, shelter), people in MDCs buy consumer goods– Cars, telephones, entertainment

Three goods in particular…

Motor vehicles, telephones, televisions Ratio is approaching 1:1 Why are these products so important?

Social Indicators of Development

Education and Literacy– Quality – Literacy rate, student/teacher ratio– Quantity – avg. number of school years attended

Average student attends school for 10 years in MDCs, LDCs = 2 or 3

Student/teacher ratio twice as high in LDCs Literacy rate over 95% in MDCs, as low as 30% in

LDCs

Demographic Indicators of Development

Life expectancy – better health and welfare in MDCs, 70s vs 40s

Infant Mortality Rate– LDCs = 100/ 1000 live births– MDCs = 10/ 1000 live births

Natural Increase rate– LDCs = more than 2 percent– MDCs = less than 1 percent

Why is a high NIR difficult for a country? Crude Birth Rate – 3 or 4 times as high in

LDCs – why? Crude Death Rate – not a factor, why?

World Birth Rate

Key Issue 2: Where are more and less developed countries distributed?

More Developed Regions– Anglo-America, Western Europe, Eastern Europe,

Japan, South Pacific

Less Developed Regions– Latin America, East Asia, Southeast Asia, Middle

East, South Asia, Sub-Saharan Africa

Location of MDCs and LDCs

Top countries by HDI - 2011

1. Norway

2. Australia

3. The Netherlands

4. United States

5. New Zealand

Anglo-America (HDI 0.94)

US, Canada 90% use English as first language 90% Christian (of those professing a religion) Abundance of minerals and natural

resources Major manufacturer, exporter of agricultural

products

Western Europe (0.92)

Primarily Indo-European languages and Christian religion

Post WWII – more unified politically, militarily, and economically

Colonization and after

Eastern Europe (0.78)

HDI has declined here in the last 20 years

Post WWII, rapid development controlled and led by the USSR

Difficult transition to the market economy

Previous Soviet emphasis on primary sector

Japan (0.93)

Highly developed despite lacking resources Must import food and resources like coal and

iron How? Low-wage workers to compete

internationally then transitioned to high quality/value products– Electronics, motor vehicles, cameras

Japan focused on skilled labor force– Education systems and

training

Emphasis and spend resources on research and development

South Pacific (0.93)

Australia, New Zealand 90% of residents are descendants of 19th

Century British settlers

#17 on the Forbes 40 in Australia, Foster’s is worth almost 10 billion USD

Latin America (0.78)

Spanish/Portuguese, Roman Catholicism Large urban populations Development is hindered by inequitable

income distribution and land ownership

East Asia (0.72)

China has massive economy but is also considered poor

GDP per capita is $7600– Ranked 125th in the

World (CIA Factbook) Europe and Japan have

exploited China’s resources in the past, hindering development

Communists take over in 1949

Govt. controlled agricultural land and production

Almost 40% of people work in primary sector Mao Zedong –

Chairman/Leader of PRC (1949-1976)

China’s One Child Policy– Limits NIR– Economic growth can

be used to improve standards of living for existing population

– Total Fertility Rate is at 1.7

Southeast Asia (0.71)

Indonesia is most populous country Region has suffered from warfare in the 20th

century Tropical climate limits agriculture Geography limits economic development

– Mountains, islands, volcanoes, typhoons

Rice is most important export

Cheap labor aids manufacturing efforts

Rice farmers in Vietnam

Middle East (0.66)

Impact of Desert Must import many

products But….they have OIL!!! This drives

development

Traditional cultural values of Islam can challenge development

Women’s participation in business is restricted

Low literacy rates among women (50% avg. but as low as 15% in Afghanistan)

Strong, internal cultural disputes hurt growth

UAE

Highest ranking in Middle East with an HDI of (0.84)

Has invested in tourism and a future without oil

Palm Island in Dubai

South Asia (0.58)

2nd highest population, 2nd lowest per capita income

NIR is very high India has many

resources but a HUGE population Jute – makes burlap and

twine

Green Revolution in India – positive impact on agriculture

Production still depends on climate and the summer monsoon season

Sub-Saharan Africa (0.47)

Though SSA has many resources, prospective development is low

Worlds highest percentage of poverty, poor health, and education levels

Why?

Legacy of colonial era

Many landlocked states

Very high NIR Possibly at carrying

capacity in certain areas

Sahel – South of the Sahara

Key Issue 3: Where does level of development vary by gender?

Gender-Related Development Index (GDI)– Compares the level of development to that of both

sexes– Uses same criteria as HDI– Highest is 1.0– Lower means greater

disparity between sexes

Top Countries by GDI

1. Iceland

2. Australia

3. Norway

4. Canada

5. Sweden

Economic Indicators

Average income in every country of world is lower for women

Per capita annual income in US (2001) was $43,000 for men and $26,000 for women

MDCs have $15K or more income gap LDCs have smaller number but greater

percentage gap

Social Indicators

Education and literacy Women to men in high

school– MDCs = 99 to 100– LDCs = 60 to 100

Primary School Enrollment and Total Fertility Rates for Selected Countries, Latest Year

 

Rank CountryPrimary School

EnrollmentTotal Fertility

RatePercent Number of

childrenper woman

 1 Japan 100.0 1.32 Spain 99.8 1.53 Iran 99.7 1.84 Georgia 99.6 1.65 United Kingdom 99.6 1.9...181 Equitorial Guinea 53.5 5.3182 Guinea-Bissau 52.1 5.7183 Djibouti 40.1 3.9184 Sudan 39.2 4.2185 Eritrea 35.7 4.6 Note: Rankings are based on a list of 185 countries for which primary enrollment data are available. See full table. Source: EPI from UNESCO

Demographic Indicators

Life expectancy– MDCs = Women outlive men by 6 years– LDCs only a year or two– Hazards of childbearing

Gender Empowerment Measure (GEM)

Compares ability of the men and women to participate in economic and political decision making

GDI shows standard of living and well-being, GEM measures ability to participate in the process of achieving those improvements

Every country has a higher GDI than GEM

Economic Indicators

% of women in professional and technical jobs– Highest percent is in Northern Europe, around

50% of professional jobs are held by women– LDCs are around 25%

Political Indicators

Managerial jobs have the ability to influence the decision making process

33% - North America, Northern Europe, South Pacific

10% - other MDCs Less than 5% - LDCs

Public Offices

No government in the world has a majority of women

Northern Europe – 33% US – 13% Other MDCs – 10% LDCs – less than 5%

Madeleine Albright – Former US Secretary of State

Why do less developed countries face obstacles to development?

Debt Matters

• The developing world now spends $13 on debt repayment for every $1 it receives in grants. • For the poorest countries (approximately 60), $550 billion has been paid in both principal and interest over the last three decades, on $540bn of loans, and yet there is still a $523 billion dollar debt burden. Source: Debt relief hope brings out the critics, Jorn Madslien, BBC, June 29, 2005

Self-Sufficiency

International Trade

Financing Development