development powerpoint part 1
TRANSCRIPT
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DevelopmentDevelopment
Chapter 10Chapter 10
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Global EconomicsGlobal Economics • Enormous gaps between the rich and poor countries of the world
• Some states are still subsistence based while others have moved beyond manufacturing to tertiary economies.
• Even within the wealthy or First World nations there are often areas of economic disparity within regions
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Measuring Development
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.
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.
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Concepts & ApproachesConcepts & Approaches• Gross National Product-all goods & services produced
by the economy per year both inside & outside the nation• Gross Domestic Product-all goods & services produced
by the economy per year with in the nation • GNP or GDP does not reflect regional variations-it also
doesn’t count the informal economy-black market, illegal drug trade & underground economy
• Developed Countries-(DCs) have high levels of industrialization, urbanization & standard of living
• Underdeveloped (UDCs) or Developing Countries are moving toward developed status-not as highly industrialized or urbanized with a lower standard of living
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Measures of DevelopmentMeasures of Development• National Product per person-the total
income divided by total population-Core (developed) about $25,000 while Periphery (developing) as low as $100.
• Occupational Structure of the Labor Force-% of workers in each section-high number in agriculture signals low development
• Consumption of Energy per Person-the greater the use of electricity-the higher the development
• Productivity per Worker-production of all goods divided by the total labor force
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Measures of DevelopmentMeasures of Development• Transportation & Communication per
person-railroad, road miles and airline connections per person as well as telephone, radio, television or computers per person.
• Consumption of Manufactured Metal per Person-the greater the amount of steel, iron, copper, aluminum etc. used per person
• Other Rates-– Literacy
– Caloric intake
– % of income spent on food
– Amount of savings per person
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Issues with Measuring Issues with Measuring Economic DevelopmentEconomic Development
• All measurements count the:– Formal Economy – the legal economy that
governments tax and monitor.
• All measurements do not count the:– Informal Economy – the illegal or uncounted
economy that governments do not tax or keep track of.
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Core-Periphery ModelCore-Periphery Model• Immanuel Wallerstein proposed the World Systems
Theory with promoted the Core-Periphery concept.• Unlike the term-developed and developing, the Core-
Periphery Model does not imply that change will occur.• Core-Periphery regionalism got its start during the period
of colonialism was re-enforced by the Industrial Rev. and continues in the age of globalization.
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Core-Periphery ModelCore-Periphery Model• New approach to developed or
underdeveloped idea• Core-Periphery also used in a
political context• Core-the nations with a high
level of prosperity with dominant economies globally
• Periphery-poor nations that are dependent on the core as markets for raw materials and sources of technology
• Semi-Periphery-better off than periphery, but still dominated by the core to some degree
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Global Economic DisparitiesGlobal Economic Disparities• Much of the disparity
existed as Colonialism was established by European nations.
• The Industrial Revolution increased the need for raw materials and markets for finished goods.
• Neo-colonialism refers to the economic dominance of the core over the former colonial nations-economic rather than political control
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Conditions in the PeripheryConditions in the Periphery• High birth rates, moderate death rates and low life
expectancy• High infant mortality rates-large population under age 15
yrs.• Poor health care & shortage of doctors-disease is common• Poor sanitation and lack of fresh, clean water• Poor nutrition and protein deficiency• Low per capita income with many women & children doing
hard manual labor• High illiteracy rate with low levels of education• Great disparity between rich & poor, small middle class• Urban areas overcrowded, lack of services, rapid urban
migration• Subsistence farming on small landholdings
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Conditions That Hamper DevelopmentConditions That Hamper Development• Political instability and
corruption• Exploitation of natural
resources and workers regardless of consequences
• Dependence of agricultural products or primary products such as mineral resources
• Misuse of foreign assistance
• Misguided priorities• Cultural resistance to
modernization
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Costs of Economic DevelopmentCosts of Economic Development
• Industrialization– Export Processing Zones (EPZs), maquiladoras,
and special economic zones (SEZs).
• Agriculture– Subsistence and agricultural conglomerates– Desertification-especially in Africa – Soil erosion
• Tourism-may have serious negative consequences – Use of scarce commodities– Foreign investors make the profit
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Tourism: Boom or BustTourism: Boom or Bust• Tourism contributes little to
a nation’s development & may have serious negative effects on the culture
• Hotels & other facilities are often owned by transnational corporations which take the profits out of the country
• Tourism jobs can be demeaning & dehumanizing or even insulting
• Tourism jobs pay minimal wages for menial tasks
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Tourism: Boom or BustTourism: Boom or Bust• Profits are reinvested in
airports, cruise ship ports & other infrastructure to serve tourists
• Tourists use up valuable resources such as food & fresh water
• Tourism can debase or change a local culture
• An invasion by wealthy foreigners can breed hostility and resentment
• Harsh contrast between gleaming modern tourist hotels and poor workers housing
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Levels of IndustrializationLevels of Industrialization• Some countries like the
Soviet Union industrialized quickly with central planning-Stalin’s Five Year Plans
• All decisions were made in Moscow-no local control
• Focus on heavy industry-steel, electrical, chemical, military hardware
• Little emphasis on consumer goods
• Little concern for worker safety or environmental problems
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Models of DevelopmentModels of Development• There are two broad models of
economic development;
– Liberal Models based on the assumption that all countries pass through the same stages of economic development and disparity is the result of short term inefficiencies
– The Liberal Model assumes that all nations are capable of the same level of economic development
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Development ModelsDevelopment Models
Modernization ModelWalt 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.
- traditional
- preconditions of takeoff
- takeoff
- drive to maturity
- high mass consumption
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Models of DevelopmentModels of DevelopmentWalt Rostow created this liberal model of development in
the 1960s
1. First Stage-Traditional1. Subsistence farms-limited technology
2. Rigid social structure
3. Resistance to change-transition triggered by external influence
2. Second Stage-Preconditions for Take-Off1. Progressive Leadership-commercial exploitation of agriculture
& extractive industries
2. Greater flexibility-installation of infrastructure-roads, railways, etc.
3. Greater openness to new technology
4. Greater Diversity of products produced
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Models of DevelopmentModels of Development3. Third Stage-Take Off
1. Experiences industrial growth2. Urbanization3. Industrialization, technology & mass production
4. Drive to Maturity1. Diffusion of technology2. Industrial specialization3. International trade4. Modernization at the core5. Population growth is reduced
5. Fifth Stage-Final Stage1. Mass consumption-widespread production of goods & services2. High incomes3. Majority of workforce in service sector
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Rostow’s Ladder of DevelopmentRostow’s Ladder of Development
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Models of DevelopmentModels of Development• Structuralist Model this is
the alternate to the Liberal Model that states disparities are inevitable due to structural features of the global economy.
• These disparities can not be easily changed-it is misleading to assume that all areas will go through the same economic process of development
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Models of DevelopmentModels of Development• Dependency Theory is
another Structuralist Model• Political & economic
relationships between nations & regions limit the development of the less well off areas
• Colonial dependencies are still in place from long ago.
• Dependency theory sees little hope for economic prosperity in some traditional parts of the world
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Dependency TheoryDependency TheoryThe political and economic relationships between countries and regions of the world control and limit the economic development possibilities of poorer areas.
-- Economic structures make poorer countries dependent on wealthier countries.
-- Little hope for economic prosperity in poorer countries.
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Dependency Ratio by Country, 2005Dependency 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.
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A Changing WorldA Changing World• Until 1980s there were 3
Blocs– First World-The Capitalist
West-the most advanced nations-democratic & capitalist
– Second World-The Communist East of the Soviet Union & its Eastern European Satellites, Red China, N. Korea & Vietnam
– Third World-non aligned nations with mixed economies and state control-now an obsolete term
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Three Tier StructureThree Tier Structure
Core Processes that incorporate
higher levels of education, higher salaries, and more technology
* Generate more 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
Periphery Processes that incorporate lower
levels of education, lower salaries, and less technology
* Generate less wealth in the world economy
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