Standard of Living

1. Standard of Living Developed Countries compared to Less Developed Countries

2. How can we measure standard of living?

3. Human Development Index • This is the United Nations ranking of countries to better understand economic and social development of the world. The HDI is calculated based on • Life Expectancy • Adult Literacy • GDP (gross Domestic Product) per capita Who are the 2012 top 10 countries? Who are the bottom 10 countries? Canada ranked #1 from 1994 – 2000. Where does Canada rank now? http://hdr.undp.org/en/content/table-1-human-development-index-and-its-components

4. Problems with Human Development index • Some countries may not have accurate records • GDP per Capita not accurate if wealth is in hands of a few billionaires • Government help / agencies can increase standard of living and not be reflected in the numbers • Doesn’t include info in nutrition, healthcare, status of women, quality of life, etc. that lower standard of living • Does not include calculation of poverty line in each country (money goes farther in some places) • What is the poverty line? • World Bank uses $1.25 per day • Canada: spending more than 56% of income on food/ shelter

5. Other Ways to Measure Poverty • U5MR: Under Five Mortality Rate • # of children who die before the age of 5 • Most deaths in LCDs are due to malnutrition • U5MR can be 50x greater in Less developed countries than in developed countries • UNICEF created the Progress of Nations Report on the Welfare of the child in 1998 • Measures the risk to children on a scale of 0-100 (1 being low risk, 100 is extremely high risk ) based on: • Infant mortality rate • % of underweight children • % not attending Primary school • Risk from armed conflict • Risk of contracting HIV/AIDS Result: Europe = 6 Africa = 61

6. Organizations that want to help • United Nations • Government Agencies (CIDA – Canadian International Development Agency) • Non-Government Agencies • Free the Children • Red Cross • Amnesty international

7. Why are some countries so wealthy while others are so poor?What defines a Less Developed Country? • History of Colonization Watch “Africa in the 21st Century” and “Latin America in the 21 century”

8. The gap between the Rich and the Poor widens • Gap between developed Countries and Less developed countries • Gap between regions in Canada • Gap between income levels in Canada (and other countries) – richest 10% and poorest 10% • The Gap between the rich and the poor is called “Economic Disparity” and that is the point of this chapter

9. World Economic Disparity

10. World economic disparity over 200 years

11. Economic Development • Economy: Sum of all economic activities that take place in a country (both money economy – ex. Companies, government, and crime – and non-money sector – ex. Education, environment, child-rearing) CHART p. 396 • Economic Activity: processes that help produce wealth and maintain quality of life

12. Primary, Secondary and Tertiary Industries • Economic Activities divide into Primary, Secondary, and Tertiary Industries • Primary Industry: Extract natural resources (ex Lumber, Oil, crops) • Secondary Industry: Manufacturing Industry: manufacturing and construction • Tertiary Industry: services to businesses and individuals (from McDonalds to hairdresser to banker to Computer programmer) Canada has been increasing in Tertiary and decreasing in Primary industry over the last century 1999: Primary 5.8% Secondary: 19.5% Tertiary: 74.5%

14. To think about . . . • What are the differences between less developed and developed countries? • What is in between? • How does a country increase its standard of living?

15. LDC vs. Developed countries • Traditional Economy: LDC (Less Developed Countries) • LDCs have significantly more primary industrythat Developed countries • LDCs live off sustenance agriculture( consume what produce), resulting in low productivity (and Low standard of living) • Description: Live off the Land, poor formal education (learn traditional skills from parents), technology relies on animals and human labour, many poor people United Nations tried to increase standard of living in LDCs through new technologies/ machines, and cash crops, but these methods have failed

16. LDC vs. Developed countries • Newly Industrialized Countries /Developing Economy: Technological development – animal and human power replaced by machines (industrial revolution) • Needinfrastructure in communications and transportationto complement industry • Description: people demand change and gov. puts in effort for change, public education system (basic educ. Seen as crucial), mechanization and industrialization (secondary overtaking primary industry), innovative people lead change

17. LDC vs. Developed countries 3. Developed Economy (DC) • diverseeconomy: some primary and secondary, mostly tertiary industries • Consumers expect a variety of goods and services and maintain a mass consumption of products and services\ • Description: stable democratic government, high and current technology, highly skilled workforce, high standard of living (ex. Canada)

18. LDC vs. Developed countries How does a country historically increase wealth and encourage development? • Natural resources • Stable Government • Literate/ Educated population • Open attitude to change and progress

19. LDC vs. Developed countries What are characteristics of countries with low economic development today? • Was a colony in the 20th century (stifled development) (what does that mean? A colony?) • High government debt(HIPC) • Ongoing domestic/ international conflict • Political and economic corruption

20. Economic hitmen

21. Uneven Consumption

22. Poverty Cycle / Trap • What is the poverty Cycle? • What are possible solutions to the poverty trap? Where and how should we intervene?

23. Debt • Highly indebted Poor Countries (HIPC) Where did the Debt come from? • International Monetary Fund (IMF) and World Bank created as branch of UN after WW2 to assist / loan money to developing nations to improve living standards • Tied aid – money given with conditions (must allow use of land, or resource, or restrict exports, etc.) ****Canada, and others, have now forgiven the loans to HIPC ***

24. What happened to the Money? Why did it fail? • Money used for Mega projects (dams, irrigation) that caused more environmental damage than economic good 2. Corrupt governments = not all money goes to places of need 3. Loans needed to be paid back • Developed Nations insist on Cash crops to export to pay debt = less food • Pay all / most profit to debt repayment, not improving economy 4. Resources controlled by Foreign Multinational Corporations = money not going to farmers or to less developed country 5. Natural disasters and civil war = increase poverty

25. Extra Vulnerable in Poverty:Lower status of Women • Male dominated societies • Treated as property (no legal rights, can be beaten or even killed) • Women suffer from Malnutrition (eat after men) • Work long hard hours to feed family – no time to improve life (see fig. 14-15 p. 351) • Lower education / literacy • Marry very young • Many children / births How to help? • Studies show educated women marry later and have less children, improving the quality of life for the entire family (children survive, better chance at being properly nourished, help break poverty trap)

26. Extra Vulnerable in Poverty:Children • Easy victims (disease, famine, war, death) • At risk for exploitation (child labour, sex trade, child soldiers) • 1999 – 540 million children lived near land mines, ethnic cleansing, civil war • 1996 – 250 million children between ages 5-14 were working

27. Disease – HIV/AIDS • 2000 - 35 million people had AIDS - 8 million orphans due to AIDS - 16,000 more are infected each day Of 14 million who have died due to AIDS by the year 2000, 11 million are from Africa, and ¼ were children Less developed countries have no resources to deal with the epidemic Ex. Zimbabwe had 26% of population infected = ½ their health care budget

28. Water https://www.youtube.com/watch?v=c9WEl6pQIPw • 1999 – 1.2 billion people lacked safe, clean drinking water (contaminated with human and industrial waste) • Water prioritized for agriculture and “cash crops” for export • Contaminated water = disease and death • 80% of world’s diseases caused by bad water, • ex. Parasites, cholera, malaria, typhoid, leprosy, bilharzia all breed in water

29. Suggest some possible solutions to World Poverty

30. Decrease Population Growth Decrease Infant Mortality Rate Improved sanitation and health care Improved access to nutrition and clean water Education for women Creating options for women Increase in Womens Rights Improve standard of living Washing Machines! Social Programs Family Planning Poverty Solutions – Decrease Population Growth

31. Decrease debt burden on developing countries Much of the debt old and based on IMF recommendations With more money available governments can focus on social programs and educatio The World Bank and the IMF (International Monetary Fund) can support developing countries with their debt However will only restructure debt if they have direct input into Governments’ budgets Poverty Solutions – Debt Forgiveness

32. Aid organizations like UNICEF (International Govt) NGO’s Nongovernmental Organizations Red Cross, Drs Without Borders, Focus on sustainable aid Building wells with local workers CIDA (Canadian International Development Agency) Tied Aid from Canada Money needs to be spent in Canada Microloans Personal Loans made to small business people directly Poverty Solutions – Direct Support

33. Globalization – The opening of world trade Markets for Developing World’s resources and products Employment in developing nations Availability of cheap labour Unsafe labour practices With the use of ‘Fair Trade’ Practices and the ILO (International Labour Org.) Globalization could be very positive for the developing world Poverty Solution? - Globalization