Levels of Development

How do we talk about development?

How do we talk about economic development? First World Countries Industrialized, service-based economies Free-Market economies High levels of productivity values per person

How do we talk about development? First World Countries United States Canada European Union Israel Australia New Zealand Japan South Korea Singapore Taiwan Saudi Arabia Kuwait UAE Oman Bahrain Borderline First World Countries Argentina Chile South Africa Trinidad Seychelles

How do we talk about development? Second World Communist countries and “restructuring” communist countries

How do we talk about development? Second World Cuba North Korea Former Soviet Union China Vietnam

How do we talk about development? Third World Mainly agricultural and resource-based economies Low levels of per-person productivity Also known as underdeveloped states Includes Newly Industrialized Countries (NICs)

How do we talk about development? Third World Countries Haiti Niger Malawi Tanzania Madagascar Nepal Kyrgyzstan Tajikistan

How do we talk about development? Fourth World Third world states that have experienced some type of crisis Examples include: Sierra Leone Liberia Myanmar

How do we talk about development? Fifth World Third world states that both lack a functioning economy and have no formal government. Examples include: Somalia Western Sahara

MDC and LDC More Developed Countries Generally First and Second world states Less Developed Countries Third, Fourth, and Fifth world states

Is this a valid view of the world today?

Newly Industrialized Countries Third world states that have made a distinct shift away from agriculture and toward manufacturing. Most of these countries are investing in and building infrastructure.

Newly Industrialized Countries The two most important characteristics are: Rapid population growth and Rapid Rural to urban migration

Newly Industrialized Countries Examples include: Mexico Brazil Dominican Republic Nigeria Gabon Indonesia Vietnam China India Thailand Malaysia Philippines

Foreign Direct Investment and Development Loans Development Loans Loans from international organizations like the world bank. They are most often used to develop infrastructure. Many LDCs have defaulted on these types of loans. Many today question whether loans to struggling economies does more harm than goods. Foreign Aid programs (not loans) drove economic development in the “Old Asian Tigers” during the 1950s-1970s. (Japan, South Korea, Taiwan, Hong Kong, and Singapore)

Foreign Direct Investment and Development Loans Foreign Direct Investment Money from private investors in foreign countries who are looking to turn a profit. This type of investment drove economic development in the “New Asian Tigers” during the 1980s-1990s. (China, India, Indonesia, Malaysia, Thailand and Vietnam)