1 Measuring Economic Development Different economic regions The terms ‘GNP’ and ‘HDI’ How GNP and HDI are used to measure economic development

Chapter 1: Measuring Economic Development Economic activities and wealth are unevenly distributed: Concentrated in the most developed countries of the North The South remains under-developed One quarter of people live in the North and possess four-fifths of the wealth Three-quarters of people live in the South and possess one-fifth of the wealth

Chapter 1: Measuring Economic Development Classify countries: Most developed countries (MDCs) Least developed countries (LDCs) Newly industrialised countries (NICs)

Chapter 1: Measuring Economic Development MDCs: High levels of industrial activity Most people employed in manufacturing and services Average income is high High standard of living Life expectancy and literacy rates are high

Chapter 1: Measuring Economic Development LDCs: Rely heavily on agriculture Low levels of economic development Standard of living is low Many people live in extreme poverty Low life expectancy and literacy rates

Chapter 1: Measuring Economic Development NICs: Economic activity has increased rapidly Reliance on agriculture has decreased Increase in manufacturing and services Income remains low The standard of living has improved

Chapter 1: Measuring Economic Development Gross National Product (GNP): Measures wealth Measures value of goods and services in a particular year Can be inaccurate: data collection difficult, crude figures, informal economy

Chapter 1: Measuring Economic Development The Human Development Index (HDI): Published annually by the United Nations (UN) Measures well-being and quality of life Criteria: life expectancy, mean and expected years of schooling, income measured in PPP Scores each country between 0.0 and 1.0 MDCs generally score 0.8 or higher LDCs usually score less than 0.5

Chapter 1: Measuring Economic Development Ireland’s HDI score 1980–2010: Ireland’s HDI increased 0.7 per cent annually 2010: Ireland came fifth out of 129 countries Increase due to rapid economic growth, higher income levels and life expectancy rate

Chapter 1: Measuring Economic Development Taiwan: Early twentieth century: Taiwan was under-developed and relied heavily on agriculture Improvements in infrastructure, policy to produce imported goods, land reform and foreign aid From 1960s on: rapid industrialisation and economic growth Early 1960s: Taiwan’s GNP was $170 2010: Taiwan’s GNP per capita (PPP) had risen to $35,227 2010: Taiwan achieved a HDI score of 0.868 and ranked eighteenth out of 129 countries Economic growth: improvements in quality of life, income, education and health