Notions of “Development”

1. Notions of “Development” Work with a partner to come up with your own definition. UNDP (2008): “Human Development is the process of enlarging people’s choices – choices that are created by expanding human capabilities and functionings – what people do and can do in in their lives. At all levels of development a few capabilities are essential for human development, without which many choices in life would not be available. These capabilities are to lead long and healthy lives, to be knowledgeable and to have access to the resources needed for a decent standard of living. But many additional choices are valued by people. These include political, social, economic and cultural freedom, a sense of community, opportunies for being creative and productive and self-respect and human rights. Yet is more .. It is also the process of pursuing them in a way that is equitable, participatory, productive and sustainable”

2. World Commission on Environment and Development (1987) "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs". It contains two key concepts: • the concept of "needs", in particular the essential needs of the world's poor, to which overriding priority should be given • the idea of limitations imposed by the state of technology and government organization on the environment's ability to meet present and future needs.

3. Limitations to Measuring Development with statistics Lack of clarity as to what “progress” and “development” really are. Should booming military production be considered an increase in development? How can we measure “happiness” or “satisfaction” ? much human activity is NOT counted in UN stats; a subsistence farmer earns little or no cash, therefore generates no GDP. If they switch to cash crops, GDP goes up, but food security goes down. Development? Stats refer to the “average” citizen, but the average is often a poor indicator of real living conditions. If many/most citizens don’t benefit from an increase in GDP, should that be considered development? Some countries have limited ability to collect accurate statistics Preoccupation with GNI or GNP per capity ignores the issue of “purchasing power” (basic commodities cost different amounts in different countries). That’s why “PPP” (purchasing power parity) is sometimes used as a measure

4. Development Nomenclature • 1st, 2nd 3rd world (politically unpalatable) • UN: (Most Developed), Developed, Developing, Least Developed • North-South (politically neutral but no geographically accurate (eg. Australia, NZ) • MEDC/LEDC (most and least economically-developed countries)

5. Purchasing Power Parity (PPP) This measure is designed to get past the challenge of GDP per cap not taking into consideration real purchasing power It is defined as “the number of units of a country’s currency needed to buy the same amounts of goods and services in a country as $US1 would buy in the USA”. It includes such things as food, transport, clothing and housing. A more common use of this concept is in the “corrected” PPP GNI per capita. For example, Norway goes from $76,000 to $54,000 and Sierra Leone goes from $260 to $660

6. Patterns in Economic DevelopmentGDP Growth rates 2010 Which countries’ economies are growing the fastest? Fast: SE Asia (esp China, India), South America, Russia, parts of Africa Moderate to low: parts of Africa, N. America, much of Europe Shrinking or stagnant: Haiti, some Carribean, Greece, Spain

7. Micro Credit Commercial banks (MEDC and LEDC) are hesitant to loan to the poor. Why? • they lack collateral (something valuable and “ownable” that bank can repossess upon default) • they have little credit history – they represent unknown risk Enter “Micro-credit” – whose target market is the poor. Goal: empower poor entrepreneurs through provision of “start-up” capital, to be paid back in realistic time frame. Grameen Bank of Bangladesh is world leader, with remarkable success in #s of loans and repayment of loans. http://www.youtube.com/watch?v=MgYes4bA7oM