Countries according to the Human Development Index (2010)Countries according to the Human Development Index (2010)
Poverty & Poverty & DevelopmentDevelopment
Recognizing developing Recognizing developing countries: countries: geographygeography
TimelineTimeline 1500s-1945: colonization1500s-1945: colonization 1945-1970s: decolonization1945-1970s: decolonization The Cold War contextThe Cold War context New countries as a New countries as a
“problem”“problem”
The choice of wordsThe choice of words Developing Developing
countriescountries Third World Third World
countriescountries Less developed Less developed
countriescountries The SouthThe South The global SouthThe global South
Recognizing developing Recognizing developing countries: countries: $ per day$ per day
1.1. GeographyGeography2.2. GDP per capita (PPPGDP per capita (PPP**): ):
$1/day or $365/year$1/day or $365/year $2/day or $730/year$2/day or $730/year
see data for the see data for the whole world
Proportion of population below $1/day (2008)Proportion of population below $1/day (2008)
See the World ResourcesInstitute search engine for basic poverty figures
** PPP: purchasing power parity takes into account the fact that the cost of the same products varies by country.
Recognizing developing Recognizing developing countries: countries: economic economic sector sizesector size
Size of economic Size of economic sectorssectors
in total GDPin total GDP in total employmentin total employment
““Development”: standard Development”: standard definition vs. human definition vs. human developmentdevelopment
Standard definitionStandard definition the Cold War & the the Cold War & the
invention of invention of “development”“development”
copying the US/European copying the US/European model model
industrialization of industrialization of agricultureagriculture
from agriculture to industry from agriculture to industry to mass consumptionto mass consumption
measured by GDP growthmeasured by GDP growth
Human developmentHuman development GDP growth not enoughGDP growth not enough harder to measureharder to measure
nutritionnutrition healthhealth physical securityphysical security leisureleisure participatioparticipationn in communityin community creative lifecreative life
Peasants Dancing, 1651Johannes Lingelbach (Dutch, 1622–1674). Oil on canvas; 26 1/2 x 29 1/2 in. (67.3 x 74.9 cm)
Defining Defining human development
“The basic purpose of development is to enlarge people’s choices. In principle, these choices can be infinite and can change over time. People often value achievements that do not show up at all, or not immediately, in income or growth figures: greater access to knowledge, better nutrition and health services, more secure livelihoods, security against crime and physical violence, satisfying leisure hours, political and cultural freedoms and sense of participation in community activities. The objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives.” Mahbub ul-Haq, quoted in United Nations Development Program. (2008). “The Human Development concept”. Retrieved 9 February 2010, from http://hdr.undp.org/en/humandev/.
2011 Human Development Report
Measured by the Measured by the Human Development Human Development Index (HDI).Index (HDI).See how it’s See how it’s calculated.calculated.
Origins of Origins of the debt crisisthe debt crisis
OPECOPEC* * and oil pricesand oil prices
““Petrodollars” in Western banksPetrodollars” in Western banks
Developing countries’ need for Developing countries’ need for capitalcapital
Loans from Western banksLoans from Western banks
Interest rates riseInterest rates rise
** Organization of Petroleum Exporting Countries
•Algeria•Angola•Ecuador•Iran*•Iraq*•Kuwait*•Libya•Nigeria•Qatar•Saudi Arabia*•United Arab Emirates•Venezuela** Founding membersFormer: Gabon & Indonesia
•Algeria•Angola•Ecuador•Iran*•Iraq*•Kuwait*•Libya•Nigeria•Qatar•Saudi Arabia*•United Arab Emirates•Venezuela** Founding membersFormer: Gabon & Indonesia
The International Monetary Fund The International Monetary Fund (IMF) & Structural Adjustment (IMF) & Structural Adjustment Programs (SAPs)Programs (SAPs)
Lender of last resort Lender of last resort Allowing debtor Allowing debtor
governments to pay back governments to pay back debtsdebts
ConditionalityConditionality conditions for IMF & World conditions for IMF & World
Bank loansBank loans ““economic reforms”, economic reforms”,
“austerity measures”, “austerity measures”, “Washington consensus” “Washington consensus”
Debtors: those who have debtsCreditors: those to whom money is owedTherefore debtors are supposed to reimburse creditors
Washington Washington consensusconsensus
• Privatization of state-Privatization of state-owned enterprises owned enterprises
• Reductions in gov. Reductions in gov. spending (health, spending (health, education & social)education & social)
• Elimination of Elimination of subsidies (cooking oil, subsidies (cooking oil, staple foods, fuel)staple foods, fuel)
• Deregulation of labour Deregulation of labour markets (less markets (less protection)protection)
• Adoption of free tradeAdoption of free trade• Allow foreign Allow foreign
investors to buy investors to buy domestic companiesdomestic companies
SAPs’ objectives & SAPs’ objectives & resultsresults
Impose good Impose good economic policies toeconomic policies to restore government restore government
budget & guarantee budget & guarantee loan repayment loan repayment
restore credit ratingrestore credit rating
and createand create ““good investment good investment
climate”climate” ““conditions for conditions for
economic growth” economic growth”
and “give investors and “give investors confidence”confidence”
What they didWhat they did reduction in wealth reduction in wealth
redistributionredistribution increase in cost of increase in cost of
livingliving increase in poverty, increase in poverty,
child mortality, child mortality, maternal mortalitymaternal mortality
political instabilitypolitical instability
NB: since the late NB: since the late ’90s restoration of ’90s restoration of social, health & social, health & education spendingeducation spending
BenefitsBenefits Developing countries Developing countries dodo get investments get investments
from multinational/transnational corporationsfrom multinational/transnational corporations Jobs are createdJobs are created Taxable income for developing countries’ Taxable income for developing countries’
governmentsgovernments Ability to pay back loansAbility to pay back loans
ProblemsProblems 12 countries, 75% of investments12 countries, 75% of investments South-South competitionSouth-South competition Dubious labour practicesDubious labour practices There are more workers than are needed(!)There are more workers than are needed(!)
Source: International Labour Organization. (2004). A Fair Globalization: Creating Opportunities for All. Geneva: ILO. pp. 28-29. http://www.ilo.org/public/english/wcsdg/docs/report.pdf
Where did Where did investments go?investments go?
43.3%43.3%
56.7%56.7%
Same 12 developing countries 2005 to April 2011Same 12 developing countries 2005 to April 2011
Current issuesCurrent issuesMore issues will be raised in the documentaryMore issues will be raised in the documentary
Debt cancellationDebt cancellation
Jubilee 2000 Jubilee 2000 (UK, US & Vatican campaigns)(UK, US & Vatican campaigns) the “odious debt”the “odious debt” human consequenceshuman consequences impossibility of repaying the debtimpossibility of repaying the debt
Impossibility of repayment generally Impossibility of repayment generally acknowledged, but…acknowledged, but… which LDCs should benefit?which LDCs should benefit? ““moral hazard”moral hazard” G8 summit of Gleneagles, July 2005 G8 summit of Gleneagles, July 2005 debt cancellation for 36 poorest countriesdebt cancellation for 36 poorest countries
Some strings attachedSome strings attached
Group of 8 most indus-Group of 8 most indus-trialized countriestrialized countries
1.1. CanadaCanada
2.2. FranceFrance
3.3. GermanyGermany
4.4. ItalyItaly
5.5. JapanJapan
6.6. RussiaRussia
7.7. United KingdomUnited Kingdom
8.8. United StatesUnited States
The Millennium The Millennium Development Goals Development Goals (MDGs)(MDGs) Officially a UN initiativeOfficially a UN initiative But dependent on developed countriesBut dependent on developed countries … … and autonomous international and autonomous international
organizations (IMF & World Bank)organizations (IMF & World Bank) 8 goals to be achieved by 20158 goals to be achieved by 2015
1.1. Eradicate extreme poverty & hunger Eradicate extreme poverty & hunger 2.2. Achieve universal primary educationAchieve universal primary education3.3. Promote gender equality & empower women Promote gender equality & empower women 4.4. Reduce child mortality Reduce child mortality 5.5. Improve maternal health Improve maternal health 6.6. Combat HIV/AIDS, malaria, and other diseases Combat HIV/AIDS, malaria, and other diseases 7.7. Ensure environmental sustainability Ensure environmental sustainability 8.8. Develop a global partnership for development Develop a global partnership for development
Summary of Summary of successes successes & failures available& failures availablehere (red menu on here (red menu on the right)the right)
Summary of Summary of successes successes & failures available& failures availablehere (red menu on here (red menu on the right)the right)
Requires govern-ment intervention with taxes, regu-lations & targeted policies
Requires govern-ment intervention with taxes, regu-lations & targeted policies
ConclusionConclusion
A global capitalist systemA global capitalist system
An increasingly integrated economic An increasingly integrated economic system…system…
with wide disparities in wealthwith wide disparities in wealth
Numerous policies aimed at guaranteeing Numerous policies aimed at guaranteeing development & improvement in well-development & improvement in well-being…being…
with unclear resultswith unclear results
Annex 1: International Annex 1: International division division of labour 1of labour 1
Raw material and Raw material and agricultural productsagricultural products
+ some manufacturing+ some manufacturing
Developing country 1Developing country 1
ExportsExports
Developed Developed country 1country 1
Manufacturing of Manufacturing of finished goodsfinished goods
ExportsExports
Developed Developed country 2country 2
Manufacturing ofManufacturing offinished goodsfinished goods
ExportsExports
Developed Developed country country nn
Manufacturing ofManufacturing offinished goodsfinished goods
TradeTrade TradeTradeNNOORRTTHH
SSOOUUTTHH
Raw material and Raw material and agricultural productsagricultural products
+ some manufacturing+ some manufacturing
Developing country 2Developing country 2
Raw material and Raw material and agricultural productsagricultural products
+ some manufacturing+ some manufacturing
Developing country Developing country nn
At the time of developing At the time of developing countriescountries’’ independence independence
NNOORRTTHH
Annex 2: International Annex 2: International division division of labour 2of labour 2
Raw material and Raw material and agricultural productsagricultural products
+ + growing manufacturinggrowing manufacturing
+ services+ servicesDeveloping country 1Developing country 1
Developed Developed country 1country 1
R&D, manufacturing of R&D, manufacturing of hi-tech finished goodshi-tech finished goods
Developed Developed country 2country 2
R&D, manufacturing of R&D, manufacturing of hi-tech finished goodshi-tech finished goods
Developed Developed country country nn
R&D, manufacturing of R&D, manufacturing of hi-tech finished goodshi-tech finished goods
TradeTrade TradeTrade
SSOOUUTTHH
Raw material and Raw material and agricultural productsagricultural products
+ + growing manufacturinggrowing manufacturing
+ services+ servicesDeveloping country 2Developing country 2
Raw material and Raw material and agricultural productsagricultural products
+ + growing manufacturinggrowing manufacturing
+ services+ servicesDeveloping country Developing country nn
ExportsExportsincl. incl.
manufactured manufactured goodsgoods
InvestmentsInvestmentsand/orand/or
subcontractorssubcontractors
InvestmentsInvestmentsand/orand/or
subcontractorssubcontractors
InvestmentsInvestmentsand/or and/or
subcontractorssubcontractors
ExportsExportsincl. incl.
manufactured manufactured goodsgoods
ExportsExportsincl. incl.
manufactured manufactured goodsgoods
Different parts of the finished good made in different developing countriesDifferent parts of the finished good made in different developing countries
Since the 1980sSince the 1980s