Presentation on theme: "6GEO3 Unit 3 Contested Planet Topic 5: Bridging the Development Gap"— Presentation transcript:
1 6GEO3 Unit 3 Contested Planet Topic 5: Bridging the Development Gap
2 What is this topic about? ‘Bridging the Development Gap’ should be seen as complimenting the ‘Superpower Geographies’ topicThe two topics represent two sides of the same coin – the rich and developing on one side, the poor and underdeveloped on the otherThe topic explores the causes and consequences of the development gapThe last section of this topic focuses on solutions – can the ‘gap’ be narrowed?
3 The consequences of the gap Bridging the gap CONTENTSThe causes of the gapThe consequences of the gapBridging the gapClick on the information icon to jump to that section.Click on the home button to return to this contents page
4 1. The causes of the gapThe development gap relates to global inequalityAround 2.8 billion people live on under $2 per day (‘moderate poverty’)Some 1.1 billion people live on less than $1.25 per day (‘extreme poverty’)Over time a greater proportion of wealth has concentrated in the hands of the richest 20% of people, compared to the poorest 20% of people (see graph)Since 1980, the percentage of people living in extreme poverty has fallen from 40% to 20% of world population, but because of population growth the total number of people is extreme poverty is still very high.
5 Measuring development Measuring development levels is a challenge.Traditionally development has measured using economic data such as GDP or GNI per capita.These measures fail to recognise:Income distributionThe local value of moneyThe non-money economy e.g. barter and exchangeIt is also important to recognise that development has social and quality of life aspectsMeasures such as life expectancy, education level, access to sanitation are importantThis basket of goods costs 112 Indian Rupees in India, the equivalent of £1.50*. To buy the same basket of goods in the UK would cost around £6.The difference in how much goods and services really cost, is why PPP (purchasing power parity) GDP income is used rather than ‘raw’ GDP.Using raw GDP per capita average income in India is about $1000, but PPP GDP per capita income is $2800*data for Dec 2009
6 As the development cable model (right) shows, development is a multi-faceted process At its core is economic development, but to achieve real progress social, political, environmental and personal development is also needed.Recognising the complex nature of development is why development is often measured using an index, which combines a range of dataIndices are considered more accurate than single data points such as GDP per capita.Physical Quality of Life Index (PQLI)Life expectancy + Literacy rate + Infant Mortality rateThe Human Development Index (HDI)Life expectancy at birth + Literacy rate + Enrolment rate + GDP per capita PPP
7 The Millennium Development Goals The MDG were adopted by the UN in the year 2000The MDG are a global attempt to measure, and actively improve, quality of life for the poorest peopleThere are 8 Goals, with 21 targets within these. The target date to achieve the MDG is 2015The most famous Goals areHalve the proportion of people living on less than $1 a dayHalve the proportion of people who suffer from hungerAchieve universal primary educationReduce by two thirds the under 5 mortality rateProgress has been patchy, especially in Africa and South Asia were the problem tend to be most acute.Explore MDG progress and annualreports at
8 The development gapThe geography of the development gap is more complex than a simple ‘North-South divide’Latin America has HDI levels similar to eastern Europe; China’s HDI and some others in SE Asia are relatively highSouth Asia has a concentration of levels below 0.6Level in the Middle East are relatively high, although not in Yemen, Syria and IraqThe picture for Africa is very complex, with the extreme north and south having decent HDI levels, but some regions with shockingly low numbers
9 Core and PeripherySome countries remain largely unconnected to the modern globalised world.This is especially true in Sub-Saharan Africa , which remains very much part of the global periphery (see map)Other peripheral regions include north South Asia, the Andean region, parts of East and Central Asia.Growth areas (upward transition) are much better connected to the global core areas.Sub-Saharan Africa has a range of factors which make development very challenging; these include debt levels, landlocked states, conflict, corruption, Aids/ HIV, malaria, lack of infrastructure and communications, low education levels, drought and many others
10 Global PlayersThere are a range of players involved in the development process:PlayerRoleWorld Bank / IMFThese two IGOs lend money to the developing world – essentially funding development, and as part of this process guide economic policy (the IMF). Much of the developing world’s debt is owed to the IMF and WB.TNCsInvest in the developing world e.g. building factories; Foreign Direct Investment tends to flow to low cost locations, but where people are educated and skilled; Africa’s share of FDI is therefore small.United NationsMonitors the MDG, but has many component organisation which focus on development (UNDP), health (WHO), food and farming (FAO) and environmental issues (UNEP); often involved in disaster relief as well as longer term aid.GovernmentsDeveloped world governments provide funding for the UN, IMF and WB. They also provide bi-lateral aid the developing world in the form of Official Development Assistance (ODA). Developing World governments manage their countries path to development.NGOsCharities and not-for-profit organisations provide aid to the developing world, often in a smaller, more localised way compared to Governments and IGOs. Some NGOs receive government fundingIndividualsAs consumers and voters, individuals can alter government policy both in the developed and developing world; community led development in becoming more common; developed world consumers may support fair trade.
11 Trade and developmentTrade is important to development, because it generates income.Least developed countries play a limited role in trade:LDCs tend not to be part of trade blocs, so their exports are subject to tariffsLDCs often export commodities, the price of which fluctuates wildly (see graph)Cheap commodity export earn few Dollars, but Dollars have to be used to import manufactured good – this creates poor terms of trade (see picture)Much of the value of the products we buy is added outside the country which supplied the raw materialsThe 49 least developed countries account for only 0.9% of world trade, but have over 700 million people
12 2. The consequences of the gap The development gap means that poverty is common in least developed countries, especially in Sub-Saharan AfricaIn many countries males still have more access to education than females, and this has an impact on opportunities later in life (see diagram for Pakistan)In some situations, such as the Indian Caste system (still prevalent in rural India – see pyramid), society has built inequality into the social systemThe African countries shown all have infant mortality rates of over 80/1000 live births, andunder 5 mortality of over 100/1000; Sierra Leone’s 2008 rates were 160 and 278
13 MegacitiesPoverty and lack of opportunity is often most acute in rural areas*However, developing world megacities contain growing concentrations of urban povertySome 1 billion people live in urban slums, likely to grow to 2 billion by 2030Slums often have:Poorly built, shack housingLimited and expensive water supplyLimited sanitationInformal, unreliable employmentLack of rubbish collectionSocial problems such as disease, crimeFew services such as education and healthA UN-Habitat report in 2006 stated there was “concrete evidence that there are two cities within one city – one part of the urban population that has all the benefits of urban living, and the other part, the slums and squatter settlements, where the poor often live under worse conditions than their rural relatives.”*see the rural urban data for Pakistanand Guatemala on previous and next slides
14 Ethnic and religious dimensions Ethnic and religious minorities often suffer worse poverty than the wider populationThe data for Guatemala show a large different between poverty rates for Native Indians and the White Hispanic populationSuch differences can result from subtle prejudice, and direct discrimination and persecutionIn South Africa, the long history of apartheid has left a legacy of stark differences between black and white populationsOften different ethnic groups live in different geographical areas e.g. white gated communities versus black townships in South Africa2001 CensusBlack South AfricansWhite South AfricansUnder 15 yrs old34%19%No education22%1%Households with a telephone31%95%Adult mean income$1600$8800
15 East TimorEast Timor (Timor-Leste) was a Portuguese colony which gained independence in 1975, and was invaded by Indonesia in the same year.Indonesia occupied East Timor until 1999; East Timor regained its independence in 2002.The Indonesian campaign against East Timorese resistance fighters involved forced resettlement of 1000s of people into campsThe death toll from fighting was highPortuguese was bannedAround 150,000 Indonesians were settled on East Timor as part of the Transmigration ProgrammeMost businesses were taken over by IndonesiansEast TimorIndonesiaColony ofPortugalHollandReligionCatholicMuslimAve Income$2300$4000HDI0.490.73Indonesia’s occupation created a dual population of poor Timorese and better off Indonesian migrants, reflected in the post-independence differences in HDI and income
16 Poverty reduction at a price? The pressing need to reduce poverty has led some countries to ‘go for growth’Both China and India (and the ‘Asian Tigers’ before them) have opened their economies to world trade and investmentThis has created employment, raised incomes and reduced povertySocial and Environmental IssuesIncreased rural –v- urban inequalityMass rural-urban migration and rise in urban slumsIncreased air and water pollution from industryStress on forests and water supply as resource demands risePossibility of rising debt; financial crisesSocial problems – urban crime and diseaseWorker exploitation and human rights abusesBreakdown of traditional family structures and community support(estimates of extreme poverty)19802005India45%25%China60%+10%
17 Neo-liberal / Capitalist 3. Bridging the gapHow should the development gap be bridged?This question is important because there are a number of different approaches that might be takenThe choice of approach is influenced by political viewpointNeo-liberal / CapitalistMarxist/ SocialistPopulistGrassrootsChina, Asian TigersCuba, Kerala (India)Venezuela / Latin AmericaCommunity basedMarket led development, following the ‘Modernisation Theory’ of WW RostowStressing industry and infrastructure, free trade and attracting foreign direct investment to create jobs and raise incomes.Breaking free of capitalism and profit.State ownership and planning so that profits from industry and uses for health and education; usually involves wholesale land reform .State control and limited involvement in world trade and TNCsCharismatic ‘man of the people’ leaders create a ‘them and us’ discourse promising social equality and using policies that appeal to the pockets of ordinary peopleCritics state populism is directionless and leads to poor economic decision-makingSmall-scale, community focussed development often aiming to meet basic needs rather than hugely improve incomesOften involves local or international NGOs who provide some funding and other support.
18 StrategiesDevelopment projects are often characterised as either ‘top-down’ or ‘bottom-up’: (see the next slide for examples)Bottom upTop DownScaleSmall; based on one community or area e.g. a valleyLarge; often part of national planning aimsLeadershipCommunity and NGOs; partnership arrangementsGovernment and government agencies; construction and engineering TNCsFunding sourceLocal people and NGOs; donations or earned income recycled into the communityGovernment, via multilateral aid (WB / IMF) or bilateral aid; private investmentAimsMeeting basic needs of food, health, education and water; small improvements in incomeMeeting national needs in terms of energy or water supply, or transport; profitTechnologyIntermediate / appropriateHi-TechTypes of projectFood production, water supply, small scale renewable energyElectricity, transport, industry and infrastructureWinnersLocal people; the environmentIndustry, urban dwellers, TNCsLosersUsually are noneEnvironment, rural people
19 ‘A’ is a small-scale, bottom-up intermediate technology project These three projects show contrasting strategies.‘A’ is a small-scale, bottom-up intermediate technology project‘C’ is a classic ‘top-down’ ‘big project’ with clear winners and losers‘B’ is less easy to pigeon-hole as it is a national scheme, hi-tech, but aimed at the poorest and led by an NGO with a private partner
20 Aid Aid means assistance given to the developing world Aid can be in the form of money, food, goods, advice and technical assistanceAid comes from a variety of sources (see diagram).Development Aid given by OECD countries is termed Official Development Assistance (ODA)An UN target of OECD countries giving 0.7% of their GDP as ODA has existed for 40 years, but few countries actually give this amount (2006 data):OECD average = 0.45%USA = 0.17%UK = 0.52%Sweden = 1.02%Types of AidMultilateral Aid. Provided by IGOs such as the World Bank and IMF. Often in the form of loans.NGO aid. Given by Oxfam, CAFOD etc , using ,in part, donations from the public.Emergency relief. Given by NGOS, IGOs and Governments as short term relief from a disaster.Bilateral aid. From one government to another; it is often ‘tied’ i.e. for specific projects or policies
21 InvestmentFlows of money to the developing world may be in the form of aid, but investment is importantWhen companies and TNCs invest in the developing world this flow is called Foreign Direct Investment (FDI)FDI is motivated by profitFDI is used to set up factories fund construction in the developing worldMost FDI flows towards NICs and RICs because they have a skilled workforce, and large marketsThere are question marks over the environmental and social value of FDI is relation to pollution and worker rightsGovernments use Export Processing Zones (EPZs)and Free Trade Zones (FTZs) to help attract FDI. China has over 50 of these. In these zones foreign investors receive special tax breaks, rents are low and unions are often banned.The top 10 developing world locations for FDI in 2007 (in $ millions).Notice the lack of least developed countries in the listChina & Hong Kong1,511,000Brazil328,000Mexico266,000Turkey146,000Chile106,000South Africa93,000Thailand86,000Malaysia77,000India76,000Saudi Arabia76,0000
22 The Washington Consensus Some of the least developed countries face stark development choicesIn order to qualify for debt relief under the HIPC scheme they must undertake ‘structural adjustment policies’ (SAPs)Critics argue that World Bank and IMF sponsored SAPs and HIPC are simply another way of OECD countries controlling the least developed worldOthers say Washington Consensus reforms open countries and workers up to exploitation by TNCsThe counter argument is “Look at China”The Washington ConsensusThis is a set of economic reforms which the WB and IMF advise developing nations to undertake as part of a SAP to qualify for debt relief, and to help development. The reforms include:Cutting public spendingCurrency devaluation in some casesRemoval of import / export barriersOpening up to FDIRemoving subsidiesPrivatisation and deregulationThe aim of these policies is to help a country enter the global economy and benefit trade.
23 Fair trade There are alternatives to FDI and Free Trade ‘Fair-trade’ is perhaps the most well knownFair-trade coffee, cocoa, cotton and tea farmers receive a ‘fair price’ for their produce, above market prices.The extra money improves income and some moneys is invested in community health and education projectsFair trade has grown and spread, but how much difference does it actually make?In 2008 fair-trade coffee sales were $1.75 bil of the global $70 bil market; only $5 bil of that $70 bil went to the developing worldFair Trade coffee price = $1.55 per lb,10% above market price.Growers get 50¢ per lb. after Fair Trade cooperative fees, taxes and farm expenses.Most farmers earn $1,000 ($2.75 per day).According to Fair Trade researchers at the University of California, the price needed for farmers to rise above subsistence level is more than $2 / lb.
24 Development futuresBridging the development Gap is a story of both good and bad news:Good newsBad news In some countries, such as India and China, the gap has narrowed Debts have been reduced fro some HIPC countries, possibly giving them a chance of a new start Aid in 2008 was at record levels and many OECD countries seem serious about the MDG Some initiatives such as Fair Trade have helped, and NGOs often make a difference with bottom-up community led projects, but these need to be spread much more widely Progress has been made with some diseases such as Aids and MalariaIn regions such as Sub-Saharan Africa little progress has been made and the gap has widenedMany African nations will fail to achieve their MDG targetsThe recession may have tipped up to 200 million people back into poverty and hunger, reversing progressAid may be less of a priority in the next decade as OECD countries struggle with their own financial problemsCorruption, conflict and bad governance still bedevil may LDCsNeo-colonial relationships persist