Development

1. Development Chapter 9

2. 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.

3. Concepts & Approaches • Gross National Product-all goods & services produced by the economy per year both inside & outside the nation • Gross Domestic Product-all goods & services produced by the economy per year with in the nation • GNP or GDP does not reflect regional variations-it also doesn’t count the informal economy-black market, illegal drug trade & underground economy • Developed Countries-(DCs) have high levels of industrialization, urbanization & standard of living • Underdeveloped (UDCs) or Developing Countries are moving toward developed status-not as highly industrialized or urbanized with a lower standard of living

4. Measures of Development • National Product per person-the total income divided by total population-Core (developed) about $25,000 while Periphery (developing) as low as $100. • Occupational Structure of the LaborForce-% of workers in each section-high number in agriculture signals low development • Consumption of Energy per Person-the greater the use of electricity-the higher the development • Productivity per Worker-production of all goods divided by the total labor force

5. Measures of Development • Transportation & Communication per person-railroad, road miles and airline connections per person as well as telephone, radio, television or computers per person. • Consumption of Manufactured Metal per Person-the greater the amount of steel, iron, copper, aluminum etc. used per person • Other Rates- • Literacy • Caloric intake • % of income spent on food • Amount of savings per person

6. 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.

7. Core-Periphery Model • Immanuel Wallerstein proposed the World Systems Theory with promoted the Core-Periphery concept. • Unlike the term-developed and developing, the Core-Periphery Model does not imply that change will occur. • Core-Periphery regionalism got its start during the period of colonialism was re-enforced by the Industrial Rev. and continues in the age of globalization.

8. Core-Periphery Model • New approach to developed or underdeveloped idea • Core-Periphery also used in a political context • Core-the nations with a high level of prosperity with dominant economies globally • Periphery-poor nations that are dependent on the core as markets for raw materials and sources of technology • Semi-Periphery-better off than periphery, but still dominated by the core to some degree

9. Global Economic Disparities • Much of the disparity existed as Colonialism was established by European nations. • The Industrial Revolution increased the need for raw materials and markets for finished goods. • Neo-colonialism refers to the economic dominance of the core over the former colonial nations-economic rather than political control

10. Conditions in the Periphery • High birth rates, moderate death rates and low life expectancy • High infant mortality rates-large population under age 15 yrs. • Poor health care & shortage of doctors-disease is common • Poor sanitation and lack of fresh, clean water • Poor nutrition and protein deficiency • Low per capita income with many women & children doing hard manual labor • High illiteracy rate with low levels of education • Great disparity between rich & poor, small middle class • Urban areas overcrowded, lack of services, rapid urban migration • Subsistence farming on small landholdings

11. Conditions That Hamper Development • Political instability and corruption • Exploitation of natural resources and workers regardless of consequences • Dependence of agricultural products or primary products such as mineral resources • Misuse of foreign assistance • Misguided priorities • Cultural resistance to modernization

12. Costs of Economic Development • Industrialization • Export Processing Zones (EPZs), maquiladoras, and special economic zones (SEZs). • Agriculture • Subsistence and agricultural conglomerates • Desertification-especially in Africa • Soil erosion • Tourism-may have serious negative consequences • Use of scarce commodities • Foreign investors make the profit

13. Tourism: Boom or Bust • Tourism contributes little to a country’s development & may have serious negative effects on the culture • Hotels & other facilities are often owned by transnational corporations which take the profits out of the country • Tourism jobs can be demeaning & dehumanizing or even insulting • Tourism jobs pay minimal wages for menial tasks

14. Tourism: Boom or Bust • Profits are reinvested in airports, cruise ship ports & other infrastructure to serve tourists • Tourists use up valuable resources such as food & fresh water • Tourism can debase or change a local culture • An invasion by wealthy foreigners can breed hostility and resentment • Harsh contrast between gleaming modern tourist hotels and poor workers housing

15. Levels of Industrialization • Some countries like the Soviet Union industrialized quickly with central planning-Stalin’s Five Year Plans • All decisions were made in Moscow-no local control • Focus on heavy industry-steel, electrical, chemical, military hardware • Little emphasis on consumer goods • Little concern for worker safety or environmental problems