International Development Chapter 9 Meaning of Development Measuring Development Location of More and Less Developed Countries Strategies for International Development

What Do We Mean By Development? §The three objectives of development l increases in availability and improvements in the distribution of food, shelter, health, protection, etc. l improvements in ‘levels of living,’ including higher incomes, more jobs, better education, etc. l expansions in the range of economic and social choices available to individuals and nations

Measuring Development §Economic Indicators l Gross Domestic Product (GDP) l Types of Jobs (Economic Sectors) l Natural Resources Deemed essential, but Japan? Some more important than others. l Consumer Goods (Nonessentials) Motor Vehicles, Telephones, Televisions

New International Division of Labor

Source: U.N. World Development Report, 1998 §Total value of goods and services produced in a country each year, usually stated in per capita terms. §Gap Between MDCs and LDCs growing l Last two decades: GDP up $10,000 in MDCs compared to $200 in LDCs. Many in Africa and Latin America actually decreased! §Measures average, not distribution of wealth Gross Domestic Product (GDP)

Measuring Development §Social Indicators l Education and Literacy l Health and Welfare

Measuring Development §Social Indicators l Education and Literacy l Health and Welfare

Measuring Development §Demographic Indicators l Life Expectancy ( years) l Infant Mortality ( 100 per thousand) l Natural Increase ( %)

Life Expectancy Source: CIA World Factbook, 2001

Measuring Development Human Development Index (HDI): Economic - GDP Social - literacy and education Demographic - life expectancy * The single most important geographic fact of development is its striking unevenness. * Read pages carefully. You’re expected to be familiar with the information for each region.

Location of More and Less Developed Countries Development generally reflects a North-South split in the world.

Institutions of International Development §United Nations - formed in 1945 to promote peace. 189 current members. §World Bank - financial assistance and loans. Owned by 189 United Nations members. §International Monetary Fund - arm of U.N. that surveys and oversees international money exchange to prevent monetary crises. Also provides loans and training to help countries with balance of payment problems. §Non-Governmental Organizations (NGOs) - World Watch, Human Rights Watch, World Commission on Dams, many others.

Strategies for International Development §Self-Sufficiency Model §International Trade Model (Economic Growth) l Rostow’s Model §Basic Needs Model/Appropriate Technology Model §Revolutionary/Radical Reform Model

Rostow’s Model American economist and political advisor during 1950s developed model, arguing that each country passes through five stages from traditional society to high mass consumption.  TRADITIONAL SOCIETY  PRECONDITIONS FOR TAKE-OFF - elite group initiates economic innovations, leads to productivity.  TAKE-OFF - rapid growth in a number of specific economic activities, technical advances.  DRIVE TO MATURITY - Modern technology diffuses to a wide variety of industries  AGE OF MASS CONSUMPTION - economy shifts from heavy industry to consumer goods.

Problem’s with Rostow’s Model and the International Trade Approach Developmentalism : the idea that every country and region will eventually make economic progress toward “high mass consumption” provided that they compete to the best of their ability. This is not likely and is hard on the planet. Increased dependence on MDCs and their markets. Undue influence on many global policies, including those of the U.N. and World Bank. Market Stagnation: the MDCs have very limited population growth. Markets for low-cost manufactured goods grow slowly today. Undervalues the obstacles and competitive disadvantages faced by late starters versus those in the Core.

Other Problems in International Development §High Debt Countries §Hostility Regarding World Bank and IMF Structural Adjustment Programs l IMF “Free Market” Requirements for Loans and Assistance §Warfare and Instability Limit Foreign Investment §Core-Periphery Relationships May Be Necessary for Economic Growth l Within Countries l Globally

High Debt Countries 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

High Debt Countries June, 2005 – G8 Nations (eight wealthiest democracies) agreed to immediately cancel debt of 18 poorest nations and extend this to 20 more if they agree to IMF “structural adjustment” and corruption controls. Total immediate cost to the G8: $40. Relief is spread over 40 years and effects only a handful of countries. Interesting Iraq’s $30 billion debt was entirely cancelled in 2005 with little debate. However, G8 Nations spend $350 billion on farm subsidies and more than $700 billion on military expenditures. Case Study The G8 Nations include: U.S., France, Germany, Italy, Japan, Russia, Canada, European Union (EU)

Warfare and Instability Limit Foreign Investment

Progress Towards Development NIR = Natural Increase Rate IMR = Infant Mortality Rate