Presentation on theme: "INTERNATIONAL RELATIONS 2013–2014 Update Tenth Edition Joshua S. Goldstein Jon C. Pevehouse Chapter Thirteen: International Development."— Presentation transcript:
INTERNATIONAL RELATIONS 2013–2014 Update Tenth Edition Joshua S. Goldstein Jon C. Pevehouse Chapter Thirteen: International Development
Chinese house whose owners would not sell, 2012.
13.1 Experiences Newly industrializing countries The Chinese experience India takes off Other experiments
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The Chinese Experience “Iron rice bowl” policy Mao succeeded by Deng Xiaoping Economic growth of 1990s Situation in early twenty-first century Not clear what lessons China’s success has for rest of global South
Singapore is one of the “four tigers” (with Hong Kong, Taiwan, and South Korea). Even after the setback of a 1997 financial crisis, their growth has made them prosperous by the standards of the global South. Other countries are trying to emulate the success of these NICs. But no single, simple lesson applicable to other states emerges from the NICs. A TIGER
China’s rapid economic growth has raised incomes dramatically, especially for a growing middle class. These successes followed China’s opening to the world economy and adoption of market-oriented reforms. However, as exports slow down in a global recession, China must develop its domestic market and consumer spending rather than relying so heavily on exports to fuel growth. Here, 700,000 Chinese consumers do their part as they mob the Shanghai auto show in 2011, hoping to get in on China’s growing infatuation with that ultimate big-ticket consumer item, the automobile. CAR CULTURE
India Takes Off Robust growth Economy based loosely on socialism and state control 1991 collapse of Soviet Union Sought help from IMF, World Bank Niche in world economy is in service and information sectors Question of future success with democratic government in place
India has grown rapidly in recent years, using its large, well- educated, English-speaking population to generate export revenues in the service sector—software companies, call centers serving American customers, and professional services in such areas as accounting, architecture, engineering, and medicine. This radiologist in Bangalore, India’s technology capital, reads body scans from a U.S. hospital sent via the Internet and discusses the results by phone with the patient’s doctor in Connecticut, 2004. AT YOUR SERVICE
Globalization is creating winners and losers while sharpening income disparities. Debt, currency crises, IMF conditionality, and the privatization of state-owned enterprises are among the sources of upheaval and poverty in many poor countries. After lethal factory fires, these garment workers protest unsafe working conditions in export-oriented factories in Bangladesh, 2013. GLOBALIZE THIS
13.1 Experiences Q: Which Asian country was thrown into a severe economic crisis by the collapse of the Soviet Union? A)Indonesia B)Thailand C)India D)Bangladesh
13.2 Lessons Import substitution and export-led growth Concentrating capital for manufacturing Corruption
Import Substitution and Export-Led Growth Import substitution Export-led growth
Concentrating Capital for Manufacturing Manufacturing emerges Invest in manufacturing Trade off Problem compounded Growing disparity Capital can come from foreign investment or loans Role of microcredit Perspective and prescriptions Authoritarianism and democracy Democracy has not accompanied economic development Fastest-growing states Authoritarianism leads to economic development
Foreign investment, international debt, and domestic inequality all can help concentrate the necessary capital for manufacturing. In recent years, microcredit—very small loans made directly to very poor people— provides a way to use capital more diffusely. This woman in Recife, Brazil, runs her own convenience store in 2010 with help from a microloan. CAPITAL INVESTMENT
Corruption Important negative factor in economic development Centers on government as central actor in economic development Negotiations on foreign investment - another player added (corrupt official) to share the benefits Not limited to the global South, but effects are worse Transparency International, Berlin-based NGO published annual surveys showing most corrupt countries
Corruption is a major impediment to economic development in both rich and poor countries but is more devastating to economies in the global South and to transitional former communist economies. In India, widespread corruption has held back economic development and equality for years. These Delhi supporters of hunger-striking anti-corruption activist Anna Hazare hold a “key” to corrupt officials’ Swiss bank locker, 2012. CLEAN IT UP!
13.2 Lessons Q: Among the most corrupt countries in the world in 2012, according to Transparency International, were ___________. A)Nigeria and Indonesia B)Burma and Somalia C)Brazil and Chile D)Pakistan and India
13.3 North-South Capital Flows Foreign investment North-South debt IMF conditionally The South in international economic regimes
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Foreign investment is an important source of capital for economic development in the global South. The relationship of foreign investors and host countries transcends economics and draws in culture, politics, and identity. These Japanese executives visit their Honda factory in India, where Honda has invested $400 million, in 2008. FOREIGN INVESTORS
Foreign Investment Investment in capital goods by foreigners Many governments in global South fear loss of control MNCs invest in a country because of some advantage of doing business there Technology transfer Brain drain
North-South Debt Borrowing money Advantages Disadvantages Default, renegotiate, refinance, restructure Concessionary loans Debt crisis in 1970s and 1980s Debt renegotiations Calls for debt forgiveness
IMF Conditionality “Credit rating” Conditions attached to loans Conditions tend to follow formula Painful for locals
IMF conditionality agreements often call for reducing subsidies for food, transportation, and other basic needs. In Egypt, bread prices are heavily subsidized, forcing the government to use hard currency to import wheat. But public resistance to bread price increases is so strong that the government has not brought itself to cut the subsidy. Here, bread is delivered in Cairo during opposition protests in 2011. MIRACLE OF LOAVES
The South in Economic Regimes WTO New International Economic Order (NIEO) UN Conference on Trade and Development (UNCTAD)
13.3 North-South Capital Flows Q: Despite the perception that an international debt crisis was “over” in 2001, which country in effect defaulted on its debts? A)Mexico B)Brazil C)Argentina D)North Korea
True/False: The IMF makes loans to states in the South conditional on economic and governmental reforms. These conditionality agreements often necessitate politically unpopular measures such as cutting food subsidies.
Types of Foreign Assistance Types of aid U.S. State Department U.S. Peace Corps Handout model Oxfam model
Governments provide more than $50 billion annually in foreign assistance and private donors more than $10 billion in additional aid. In the West, the United States gives among the least amount of foreign aid as a percentage of GDP, despite recent increases. Here, a U.S. Peace Corps volunteer works in Panama, 2001. HELPING OUT
The Oxfam model of foreign assistance emphasizes support for local groups that can stimulate self-sustaining economic development at a local level. A mutually beneficial North-South partnership is the global goal of such projects. These women show off a mill they purchased with microcredit from an Oxfam- affiliated group in Gambia, 2001. PARTNER IN DEVELOPMENT
The Politics of Foreign Assistance Foreign assistance Short-term relief More organized and better coordinated now
Actress Selena Gomez launches the UNICEF Trick-or-Treat drive, 2009.
The Impact of Foreign Assistance There is a very real threat of danger in providing inappropriate foreign assistance. The giving and receiving of foreign assistance is political.
Sometimes foreign assistance contributes goods to developing economies with little understanding of local needs or long-term strategies. Here, free supplies including cartons of mouthwash are delivered by the U.S. ambassador and the captain of a U.S. Navy ship participating in Project Handclasp, 1989. MOUTHWASH FOR MAURITANIA
13.4 Foreign Assistance Q: What are some key purposes of development assistance? A)Capitalist, humanitarian, and egalitarian B)Egalitarian, political, and environmental C)Capitalist, humanitarian, and creation of future economic advantage for the receiver D)Political, humanitarian, the creation of future economic advantage for the giver
Answer: D) Political, humanitarian, the creation of future economic advantage for the giver
True/False: Foreign aid is usually utilized for political leverage and promotes the export of products from the donor state
Chapter Discussion Question Why are hunger and malnutrition rampant in the global South? Cite specific causes. Further, what role has increasing urbanization played in this context? And why have women been disproportionately impacted by malnutrition and hunger?