1. Development
Unit 5

2. MDC LDC More Developed Country Developed Country
A country that has progressed further along the development continuum
Less Developed Country
Developing Country
A country in the earlier stage of development

3. Less Developed country More Developed country
MDC
LDC
Crude Birth Rate = low
Crude Death Rate =low
Infant Mortality Rate = low
Literacy Rate = high
School Enrollment = high
Total Fertility Rate = low
Total % of pop under 15 = low
Life Expectancy = high
Natural Increase Rate = low
GNP per Capita = high
Primary Economic Activities =low
Service Economic Activities = high
% living in Rural Areas = low
% living in Urban Areas =high
Crude Birth Rate = high
Crude Death Rate = low
Infant Mortality Rate = high
Literacy Rate = low
School Enrollment = low
Total Fertility Rate =high
Total % of pop under 15 =high
Life Expectancy = low
Natural Increase Rate = high
GNP per Capita = low
Primary Economic Activities= high
Service Economic Activities =low
% living in Rural areas =high
% living in Urban areas =low

4. Measuring Development
Gross National Product (GNP)
Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year. Includes things produced inside and outside a country’s territory.
Gross Domestic Product (GDP)
Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year.
Gross National Income (GNI)
Measure of the monetary worth of what is produced within a country plus income received from investments outside the country.
** Most common measurement used today.

5. Per Capita Used to indicate the average amount of something per person
For Example the average individual earns $15 per hour in a MDC while the per capita earning LDC is $2

6. Human Development Index (HDI)
Development – process of improving the material conditions of people through diffusion of knowledge and technology
Human Development Index (HDI)
Indicator of level of development for each country combining three factors (economic, social, and demographic)
Highest possible HDI is 1.0 (100 percent)
Norway has highest (.963)
Niger has lowest (.281)
Western European countries (and Canada) higher level
Sub-Saharan African countries lowest level

7. Developed by the United Nations, the HDI combines several measures of development: life expectancy at birth, adjusted GDP per capita, and knowledge (schooling and literacy).

8. MDC LDC GDP All MDC average an annual GDP per capita of $27,000
In Luxembourg $60,000
This is reflected in the jobs typically done in MDC
All LDC average an annual GDP per Capita of $4,400
This is reflected in the jobs typically done in LDC

9. Sectors of Economic Activity
Primary Sector - Activity that directly extracts or harvests resources from Earth.
Location partly dependent on where natural resources are.
Secondary Sector - Activity that transforms raw materials into usable products, adding value in the process.

10. Sectors of Economic Activity
Tertiary Sector - Activity that links primary & secondary sectors to consumers and other businesses by selling goods or performing services; includes both retail and business (producer) services
Quaternary Sector - Highly skilled, information-based services; usually includes management

11. Employment Changes by Sector
Your textbook combines tertiary quaternary and even quintary
Fig. 9-3: Percentage employment in the primary, secondary, and tertiary sectors of MDCs has changed dramatically, but change has been slower in LDCs.

12. Structural Change in Economies
Division of Labor Varies by Level of Economic Development
Primary
Tertiary
Percentage of Work Force
Quaternary
Secondary
Pre-Industrial Industrial Post-Industrial
(LDCs) (NICs) (MDCs)

13. Calories per capita
Fig. 9-9: Daily available calories per capita as percent of requirements, In MDCs, the average person consumes one-third or more over the required average minimum, while in LDCs, the average person gets only the minimum requirement or less.

14. Where are the LDC and MDC?
Draw a line about 30 degrees North.
Majority of those countries above that line are MDC
Majority of those countries below that line are LDC
World categorized into 9 major regions based on level of development and cultural characteristics.

15. Earth's six less developed regions are Latin America, Southeast Asia, Middle East, East Asia, South Asia, and sub-Saharan Africa. The world's more developed regions are Anglo-America, Western Europe, and Eastern Europe, plus Japan and the South Pacific.

16. HDI of 9 regions Anglo – America 0.94 Western Europe 0.93
Eastern Europe 0.80
Japan 0.94
Latin America 0.80
East Asia 0.76
Middle East 0.68
Southeast Asia 0.58
South Asia 0.58
Sub-Saharan Africa 0.51

17. 1/5th of the world uses 5/6ths of the worlds goods

18. MDC SPENDS $$$ USA spends $8 billion a year on makeup
Cost of providing 2 Billion children schooling $6 Billion
European spent $11 Billion on ICE CREAM
Cost of providing toilets to 2 billion people without working toilets = $9 Billion

19. What paths do LDC use to become MDC
Development through Self-Sufficiency
Development Through International Trade
Financing Development
Fair Trade

20. Development through Self-Sufficiency
Improve income across the country to fight poverty instead of encouraging a few to become wealthy consumers
Country places barriers to limit imports.
Often in the form of Tariffs ( High Taxes on imports)
Impact is that these tariffs made some consumer goods to expensive for the average consumer

21. Development through Self-Sufficiency
Countries discourage exportation since the company is supposed to produce goods for consumption inside the country
Private companies unable to make profit would get government help in subsidies like
Cheap electricity or debt reduction

22. Development through Self-Sufficiency
Problems with this approach
Inefficiency: Lack of competition produced companies not driven to be effective
Large Bureaucracy : large government involvement leads to abuse and corruption

23. Development Through International Trade
Country Identifies a distinctive or unique economic assets
Once that is figured out concentrate on trading that assets
Example could be oil or vegetables or flowers

24. The Rostow Model The Rostow Model - The Stages of Economic Growth
W. W. Rostow was American.
He developed his model in 1960.
It was based upon the study of 15 mainly European countries.
He suggested that all countries had the potential to break the cycle of poverty and develop through 5 linear stages.

27. The Traditional Society
A subsistence economy based on farming.
Output is consumed by producers rather than traded. Trade is by barter
where goods are exchanged or 'swapped‘.
Agriculture is the most important industry and production is labor
intensive, using only limited quantities of capital.
There is very limited technology or capital to process raw materials or
develop industries and services.

28. Pre-conditions for Take Off
Surpluses for trading emerge supported by an emerging transport
infrastructure.
Agriculture becomes more commercialized and mechanized with
technological improvements.
Savings and investment grow.
Entrepreneurs emerge.
A single industry begins to dominate – often textiles.

29. Take Off
Industrialization increases, with workers switching form the land to
manufacturing. This may cause large scale rural-urban migration
Growth is concentrated in a few regions of the country and in one or two
industries.
New political and social institutions are evolve to support industrialization.
Airports, roads and railways are built.

30. The Drive to Maturity
Growth is now diverse supported by technological innovation. It should be
self sustaining.
Economic development spreads to all parts.
A more complex transport system develops.
Increase in number and types of industry.
Manufacturing expands as early industries decline.
Continued rapid urbanization.

31. High Mass Consumption Rapid expansion of tertiary industry.
Industry shifts to production of durable consumer goods.

32. 4 Asian Dragons South Korea Singapore Taiwan Hong Kong
These are the first countries to use this method

33. Problems with Development through international trade
Uneven resource distribution
Not all resources are equal
Market stagnation
World market slows
Increased dependence on MDC
If sales are good focus on just producing that which sells then nothing for the people in that country
If MDC economy slows so do their purchases

34. WTO World Trade Organization Formed in 1995
Countries negotiate reduction or elimination of international trade barriers
Created an agreement that creates cooperation among nations for trade

35. Financing Development
This is a process where MDC lend money to LDC
Often LDC are not able to repay the loans because their debt exceeds their income
MDC then refuse to lend further monies
Structural Adjustment program
Requires a plan with repayment options and dictation of how money spent and usually includes governmental actions to assist in repaying loan

36. Fair Trade
Products are made and traded according to standards that protect workers and small business
Fair trade standards are set internationally