Development Chapter 9 Children in Lundazi District of Zambia

Key Issue 1: Why does development vary among countries? HDI – Human Development Index – Economic - GDP Per capita – Social – literacy rate and amount of education – Demographic – life expectancy

Human Development Index

Gross Domestic Product Per Capita GDP – the value of the total output of goods and services produced in a country during the year – Per capita = per person GDP per capita shows an individuals contribution to generating a country’s wealth

GDP Per Capita

GDP in MDCs vs. LDCs GDP per capita exceeds $20,000 in MDCs LDC are in the $1,000 range Problem – GDP per capita is an average, doesn’t reflect all citizens, and doesn’t necessarily reflect quality of life

Why? – Types of Jobs Per capita income is higher in MDCs because of the way people earn their living Sectors of the economy: – Primary – LDC 75%, MDC less than 5% – Secondary – Tertiary

Primary Sector Directly extract materials from the Earth Examples: Agriculture, mining, fishing, forestry

Secondary Sector Manufacturing of raw materials into useful products Pencil factory

Tertiary sector Providing goods and services to people in exchange for payment

Productivity Workers in MDCs are more productive with less effort Why? – Technology, mechanization Planting crops in Kenya

Raw Materials Development requires access to raw materials AND energy resources

Consumer Goods After buying essential goods (food, clothing, shelter), people in MDCs buy consumer goods – Cars, telephones, entertainment

Three goods in particular… Motor vehicles, telephones, televisions Ratio is approaching 1:1 Why are these products so important?

Social Indicators of Development Education and Literacy – Quality – Literacy rate, student/teacher ratio – Quantity – avg. number of school years attended Average student attends school for 10 years in MDCs, LDCs = 2 or 3 Student/teacher ratio twice as high in LDCs Literacy rate over 95% in MDCs, as low as 30% in LDCs

Demographic Indicators of Development Life expectancy – better health and welfare in MDCs, 70s vs 40s Infant Mortality Rate – LDCs = 100/ 1000 live births – MDCs = 10/ 1000 live births

Natural Increase rate – LDCs = more than 2 percent – MDCs = less than 1 percent Why is a high NIR difficult for a country? Crude Birth Rate – 3 or 4 times as high in LDCs – why? Crude Death Rate – not a factor, why?

World Birth Rate

Key Issue 2: Where are more and less developed countries distributed? More Developed Regions – Anglo-America, Western Europe, Eastern Europe, Japan, South Pacific Less Developed Regions – Latin America, East Asia, Southeast Asia, Middle East, South Asia, Sub-Saharan Africa

Location of MDCs and LDCs

Top countries by HDI Norway 2. Australia 3. The Netherlands 4. United States 5. New Zealand

Anglo-America (HDI 0.94) US, Canada 90% use English as first language 90% Christian (of those professing a religion) Abundance of minerals and natural resources Major manufacturer, exporter of agricultural products

Western Europe (0.92) Primarily Indo- European languages and Christian religion Post WWII – more unified politically, militarily, and economically Colonization and after

Eastern Europe (0.78) HDI has declined here in the last 20 years Post WWII, rapid development controlled and led by the USSR Difficult transition to the market economy Previous Soviet emphasis on primary sector

Japan (0.93) Highly developed despite lacking resources Must import food and resources like coal and iron How? Low-wage workers to compete internationally then transitioned to high quality/value products – Electronics, motor vehicles, cameras

Japan focused on skilled labor force – Education systems and training Emphasis and spend resources on research and development

South Pacific (0.93) Australia, New Zealand 90% of residents are descendants of 19 th Century British settlers #17 on the Forbes 40 in Australia, Foster’s is worth almost 10 billion USD

Latin America (0.78) Spanish/Portuguese, Roman Catholicism Large urban populations Development is hindered by inequitable income distribution and land ownership

East Asia (0.72) China has massive economy but is also considered poor GDP per capita is $7600 – Ranked 125 th in the World (CIA Factbook) Europe and Japan have exploited China’s resources in the past, hindering development

Communists take over in 1949 Govt. controlled agricultural land and production Almost 40% of people work in primary sector Mao Zedong – Chairman/Leader of PRC ( )

China’s One Child Policy – Limits NIR – Economic growth can be used to improve standards of living for existing population – Total Fertility Rate is at 1.7

Southeast Asia (0.71) Indonesia is most populous country Region has suffered from warfare in the 20 th century Tropical climate limits agriculture Geography limits economic development – Mountains, islands, volcanoes, typhoons

Rice is most important export Cheap labor aids manufacturing efforts Rice farmers in Vietnam

Middle East (0.66) Impact of Desert Must import many products But….they have OIL!!! This drives development

Traditional cultural values of Islam can challenge development Women’s participation in business is restricted Low literacy rates among women (50% avg. but as low as 15% in Afghanistan) Strong, internal cultural disputes hurt growth

UAE Highest ranking in Middle East with an HDI of (0.84) Has invested in tourism and a future without oil Palm Island in Dubai

South Asia (0.58) 2 nd highest population, 2 nd lowest per capita income NIR is very high India has many resources but a HUGE population Jute – makes burlap and twine

Green Revolution in India – positive impact on agriculture Production still depends on climate and the summer monsoon season

Sub-Saharan Africa (0.47) Though SSA has many resources, prospective development is low Worlds highest percentage of poverty, poor health, and education levels

Why? Legacy of colonial era Many landlocked states Very high NIR Possibly at carrying capacity in certain areas Sahel – South of the Sahara

Key Issue 3: Where does level of development vary by gender? Gender-Related Development Index (GDI) – Compares the level of development to that of both sexes – Uses same criteria as HDI – Highest is 1.0 – Lower means greater disparity between sexes

Top Countries by GDI 1. Iceland 2. Australia 3. Norway 4. Canada 5. Sweden

Economic Indicators Average income in every country of world is lower for women Per capita annual income in US (2001) was $43,000 for men and $26,000 for women MDCs have $15K or more income gap LDCs have smaller number but greater percentage gap

Social Indicators Education and literacy Women to men in high school – MDCs = 99 to 100 – LDCs = 60 to 100

Primary School Enrollment and Total Fertility Rates for Selected Countries, Latest Year RankCountry Primary School Enrollment Total Fertility Rate PercentNumber of children per woman 1Japan Spain Iran Georgia United Kingdom Equitorial Guinea Guinea-Bissau Djibouti Sudan Eritrea Note: Rankings are based on a list of 185 countries for which primary enrollment data are available. See full table.full table Source: EPI from UNESCO

Demographic Indicators Life expectancy – MDCs = Women outlive men by 6 years – LDCs only a year or two – Hazards of childbearing

Gender Empowerment Measure (GEM) Compares ability of the men and women to participate in economic and political decision making GDI shows standard of living and well-being, GEM measures ability to participate in the process of achieving those improvements Every country has a higher GDI than GEM

Economic Indicators % of women in professional and technical jobs – Highest percent is in Northern Europe, around 50% of professional jobs are held by women – LDCs are around 25%

Political Indicators Managerial jobs have the ability to influence the decision making process 33% - North America, Northern Europe, South Pacific 10% - other MDCs Less than 5% - LDCs

Public Offices No government in the world has a majority of women Northern Europe – 33% US – 13% Other MDCs – 10% LDCs – less than 5% Madeleine Albright – Former US Secretary of State

Why do less developed countries face obstacles to development?

Debt Matters The developing world now spends $13 on debt repayment for every $1 it receives in grants. For the poorest countries (approximately 60), $550 billion has been paid in both principal and interest over the last three decades, on $540bn of loans, and yet there is still a $523 billion dollar debt burden. Source: Debt relief hope brings out the critics, Jorn Madslien, BBC, June 29, 2005

Self-Sufficiency

International Trade

Financing Development