Key Issue 4 Shifting Cultivation Explain your topic thoroughly with bulleted points. Incorporate a illustration into your bullet points! You will present these to the class for us to discuss each topic. Plant for a few years then leave it fallow for soil to regain nutrients Typical in tropical regions, labor intensive, extensive land use Farmers clear land for planting by slashing and burning the vegetation Shifting Cultivation

Elements of Self-Sufficiency: 315 Problems with Self-Sufficiency: 316 International Trade explanation and examples: 316 (don’t do Rostow!) Rostow’s Development Model: 316 Problems and recent triumph with International Trade: 317 World Trade Org and Transnational Corporations: 318 Financing Development (loans, structural adjustment programs): 319 Fair trade: 321 Wallerstein: world systems analysis, dependency theory, core-periphery: 322 and Test Prep Book 185 & 285

Why Do Less developed countries face obstacles to development? KEY ISSUE 4 Why Do Less developed countries face obstacles to development?

self-sufficiency Spread investment equally through all sectors of its economy to only rely on domestic goods and resources Income in country keep pace with city Not impacted by other countries Restrict importing goods by high taxes, quotas to limit what can come in, makes domestic goods more attractive Example: India until the 90’s .

PROBLEMS WITH self-sufficiency Inefficiency: little incentive to stay competitive with new technology and quality of products Don’t feel pressure to lower costs, reduce prices, or increase production Out of date with other countries Maruti-Udyong Ltd.: car manufacturer in India (poor quality monopoly) eventually bought by Japanese company Suzuki

International trade approach Specialize in what is unique about your country Concentrate scarce resources on its distinctive local industries, import anything else that is needed Rostow’s 5 Stages of Development... Examples: FOUR ASIAN DRAGONS AND ARABIAN PENINSULA Four Asian Dragons: South Korea, Singapore, Taiwan, Hong Kong…specialized in producing manufactured goods such as clothing and electronics…low labor costs, sell inexpensively Oil Rich Arabian Peninsula: transformed overnight in extreme wealth by specializing in petroleum exports

Rostow’s development model

Problems WITH INTERNATIONAL TRADE Uneven resource distribution: Zambia exports mostly copper, price for copper went down (new technology) Zambia makes less money Market stagnation: selling to MDC does not allow for growth…MDC populations have limited growth…economic profits stay steady but do not increase…must buy competitors in other countries to increase profits Increased dependence on MDC’s: have to import a lot of food, clothing, and other necessities

World trade org. & transnational corporations Uneven Promotes trade. WTO regulates trade, but is criticized for often favoring MDC’s/transnational corps rather than the poor. Transnational corporations facilitate the New Int’l Division of Labor.

Financing development Loans (Microloans, WTO, and the World Bank) FDI (Foreign Direct Investment) One country gives directly to another country. Structural adjustment programs: loans for LDC’s BUT… they have to abide by a set of rules. Loans with strings attached. Proponets say it makes LDC’s reform for the better. Critics say it punishes poor people for bad decisions their gov’t has made.

Fair trade Products are made and traded with standards that protect the WORKER. Often times a worker in an LDC will get the majority of the profits because there is NO MIDDLEMAN. Fair trade also teaches leadership and organizational skills to workers.

Wallerstein: world systems analysis dependency theory core-periphery It is a circular relationship. The core needs the periphery and the periphery needs the core.

Are Microloans the Key????? Watch “Pennies a Day”