Development

1. Development Chapter 10

2. Economic Geography • The study of the flow of goods and services through space, as well as how people provide for themselves in different places.

3. How do you Define and Measure Development? Key Question:

4. What does Development Mean? • Development implies “progress” • Progress in what? • Do all cultures view development the same way? • Do all cultures “value” the same kinds of development?

5. Development • Implies Progress. • Early ideas of progress are Industrial Revolution

6. Classification • Underdeveloped, Developed, and Developing Nations: • To say a country is underdeveloped would be politically incorrect, in light of the fact that the word underdeveloped had a negative connotations geographers developed a new way to groups nations in the core-periphery model. • This model characterized nations into either: core, semi-periphery, and periphery nations.

7. Characteristics of a Core Nation: Have achieved high levels of socioeconomic prosperity and high standards of living Contain world cities such as London, Tokyo, and New York which serve as global centers of economic activity. These nations include the U.S., Germany, Great Britain. Characteristics of a Semi-Periphery Nation: Newly industrialized countries with diverse economic opportunities but have extreme gaps between rich and poor. These nations are usual in a transition stage to becoming a core nation. Examples: Chile, brazil, India, China, and Indonesia Classification

8. Characteristics of a Periphery Nations: Usually poor regions that are very dependent upon core nations. Low levels of economic productivity and lack infrastructure and have rapidly growing populations. These place have benefited little from globalization. Keep in mind that the core-periphery model focus on the economic relationships among places. The “slow world” of the periphery is often compared to the “fast world” of the core because of the lack of technology and communication in periphery nations. Classification

9. Advantages of Production in Periphery Nations • Cheap Labor • Loose Labor Laws • Loose Environmental Regulations • Low Taxes • The distribution of natural resources by locating different aspects of production in different countries. • Note: Most MNC’s are conglomerate corporations: composed of many smaller firms that serve different functions. (i.e. distance to natural resources)

10. Classification • Underdeveloped, Developed, and Developing Nations: • To say a country is underdeveloped would be politically incorrect, in light of the fact that the word underdeveloped had a negative connotations geographers developed a new way to groups nations in the core-periphery model. • This model characterized nations into either: core, semi-periphery, and periphery nations.

11. Issues with Measuring Economic Development • All measurements count the: • Formal Economy – the legal economy that governments tax and monitor. • All measurements do not count the: • Informal Economy – the illegal or uncounted economy that governments do not tax or keep track of.

12. 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. WITHIN A COUNTRY 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.

13. Shortcomings of GNP/GDP • Fails to show distribution of wealth.

14. Wallerstein’s three tier structure Capitalist theory of Peter Taylor’s? EXPLOITATION

15. Other Ways of Measuring Development • Occupational Structure of the Labor Force • Productivity per Worker • Transportation and Communications Facilities per Person • Dependency Ratio (#young + elderly per 100 workers • Shortcomings of each?

16. Differences in Communications Connectivity Around the World Technology

17. Dependency Ratio by Country, 2005 A measure of the number of people under the age of 15 and over the age of 65 that depends on each working-age adult.

18. Development Models Modernization Model Walt Rostow’s model assumes all countries follow a similar path to development or modernization, advancing through five stages of development, climbing a ladder of development. - Traditional- Subsistence farming - Preconditions of takeoff - Progressive leadership “open-minded” - Takeoff – Sustained growth similar to Ind. Rev. - Drive to maturity – Ind. spec. occurs, Int’l trade. - High mass consumption – high incomes, widespread prod., service sector.

19. ~Liberal Model ~ Assume that all countries are at the same stage All countries are capable of development Optimistic viewpoint ~Structural Model~ general term for models of economic development A result of historically derived power relations within the global economic system Only certain countries can become developed The structure is already in place (maquiladoras) Models of Development

20. Structuralist Theory -Economic disparities are built into the system. -Economic hierarchy is planned. • Makes it hard for countries to move up ladder.

21. World-System Theory • When political and economic relations strengthened the areas connected (core nations) begin to thrive but the nation not connected (periphery nations) did not get these new technological advancements and innovations. This was Wallerstein’s theory as to why there are core, periphery, and semi-periphery nations. • Recognizes difference in the world.

22. Struggling Countries • Argentina suffered due to devalued dollar in Brazil • Drought, corrupt gov’t, religios strife, and drop in oil cause economic struggles in Malawi and Zimbabwe • Natural disasters (Sri Lanka)

23. Dependency Theory • The structuralist believe that development does not happen everywhere due to dependence on a core nation for money • EX: Dollarization -El Salvador • -- Economic structures make poorer countries dependent on wealthier countries. • - Little hope for economic prosperity in poorer countries.

24. Dollarization – Abandoning the local currency of a country and adopting the dollar as the local currency. El Salvador went through dollarization in 2001

25. Impact of Industrialization/Development • Neocolonialism: Major world powers control economies of poor countries even though independent. • Tourism usually places a negative affect on periphery nations because even though it may support an economy it may take away from the local culture. It also takes away from the local entrepreneurs. • Tourism may promote awareness about a particular culture but can take a harsh turn on the cultural landscape.

26. Financial Organizations • International Monetary Fund: goal to stabilize exchange rates and supervise the reconstruction of the world's international payment system. Countries could take out small loans to help. • World Bank: Goal is to combat poverty in peripheral countries. Head is US citizen in DC.

27. Commodity Chain Series of links connecting the many places of production and distribution and resulting in a commodity that is then exchanged on the world market. How processes operated at each step in the commodity chain that produced the dolomite stone for this fireplace?

28. Three Tier Structure Core Processes that incorporate higher levels of education, higher salaries, and more technology * Generate more wealth in the world economy Periphery Processes that incorporate lower levels of education, lower salaries, and less technology * Generate less wealth in the world economy Semi-periphery Places where core and periphery processes are both occurring. Places that are exploited by the core but then exploit the periphery. * Serves as a buffer between core and periphery

29. Compare and contrast Rostow’s ladder of development with Wallerstein’s three-tier structure of the world economy.

30. What are the Barriers to and the Costs of Economic Development? Key Question:

31. Preventions of Econ. Development • Desertification (Africa 2/3 arid/semi-arid) • Quotas has lead to shifting of production from country to country in the periph. and semi-periph. • Post-colonial capitals move inland. (Forward Capital) • Competition of foreign developers (European oil in Gabon)

32. NGO’s • Non-Governmental Organizations -Attempt to improve plight of the people -Guise is to make money. -”Parallel States”-have many NGO’s working at any given time and are accountable to no one. (Bangladesh 20,000)

33. Micro Credit Programs • Offer small loans at high interest rates • Encourage development in poor regions • Give women fiscal power • Alter social fabric (men’s social status, alleviate malnourishment) • Places with high mortality rates (AIDS) are not so successful b/c daily survival more important than development (default on loan)

34. Barriers to Economic Development • Low Levels of Social Welfare • Trafficking • Foreign Debt • Structural adjustment loans • Political Instability • Widespread Disease • Malaria

35. Foreign Debt Obligations Total interest payments compared to the export of goods and services.

36. Foreign Debt Obligations Foreign Debt and Economic Collapse in Buenos Aires, Argentina, 2001

37. Widespread Disease • Malaria kills 150,000 children in the global periphery each month. Tamolo, India This baby sleeps under a mosquito net distributed to villagers by UNICEF workers.

38. Global Distribution of Malaria Transmission Risk

39. Costs of Economic Development • Industrialization • Export Processing Zones (EPZs), maquiladoras, and special economic zones (SEZs). • Agriculture • desertification • Tourism

40. Export Processing Zones

41. Areas Threatened by Desertification

42. Think of a trip you have made to a poorer area of the country or a poorer region of the world. Describe how your experience in the place as a tourist was fundamentally different from the everyday lives of the people who live in the place.

43. Why do Countries experience Uneven Development within the State? Key Question:

44. How Government Policies Affect Development • Governments • get involved in world markets • price commodities • affect whether core processes produce wealth • shape laws to affect production • enter international organizations that affect trade • focus foreign investment in certain places • support large-scale projects

45. Governments and Corporations can create Islands of Development Places within a region or country where foreign investment, jobs, and infrastructure are concentrated.

46. Government-created Island of Development Malaysian government built a new, ultramodern capital at Putrjaya to symbolize the country’s rapid economic growth.

47. Corporate-created Island of Development The global oil industry has created the entire city of Port Gentile, Gabon to extract Gabon’s oil resources.

48. Nongovernmental Organizations (NGOs)entities that operate independent of state and local governments, typically, NGOs are non-profit organizations. Each NGO has its own focus/set of goals. Microcredit program: loans given to poor people, particularly women, to encourage development of small businesses.

49. How do actors in nongovernmental organizations (NGOs) mobilize political change? An Indonesian woman (on left) who migrated to Saudi Arabia as a guest worker talks with an Indonesian activist (on right) who works to defend migrant workers’ rights.

50. Take an item of clothing out of your closet, and using the Internet, try to trace the commodity chain of production. What steps did the item go through before reaching you? Consider whether core or peripheral processes were operating at each step and consider the roles governments and international political regimes played along each step.