Topic 5 – BRIDGING THE DEVELOPMENT GAP The causes of the ‘development gap’

1. Topic 5 – BRIDGING THE DEVELOPMENT GAPThe causes of the ‘development gap’ Understanding the development and the development gap Considering different measures of development Explain and contrast the different views of development Graph and analyse different development indicators to identify global variations

2. How is this unit examined? 2 ½ hour written exam, including pre-released synoptic resources (8 weeks in advance) Part 1 – 5 out of 6 topics Part 2 – 6th topic in a synoptic context (will pull together aspects of the other 5 topics) 30% of A level

3. Starter Discuss with the person sitting next to you: • What is the development gap? • How do we measure development?

4. Development What is the development gap? The social and economic difference or disparity between the wealthy and the poor both globally, between nations, and within countries (within cities or local regions) What is it measured by? GNP HDI – Human development Index 0-1, 1 being best – uses income per capita, adult literacy, life expectancy. And many other development indicators

5. Views on developmentThe RostowModel • A study of 15 countries mainly in Europe suggested that all countries had the potential to break the cycle of poverty and develop through 5 stages

6. Stage 1 – Traditional Society Subsistence economy based on farming with limited technology or capital to develop • Stage 2 – Preconditions to take-off Often an injection of external help – industries develop and growth of infrastructure. Often single industry will dominate • Stage 3 – Take off Manufacturing industries grow, airports and roads are built. Political and social changes. Farming will decline. Investment or borrowing increases • Stage 4 – Drive to maturity Growth should be self-sustaining. Often multiplier effects in similar industry types. Rapid urbanisation • Stage 5 – High mass consumption Rapid expansion of tertiary services, employment in service industries grow but decline in manufacturing

7. Is this model valid? • Model assumes that all countries start off at the same level • Although capital is needed to advance from a traditional society it often brings debt repayments which stop a country developing • Underestimates the extent and impact of colonialism • Predicts too short a timescale between the beginning of growth and becoming self-sustaining

8. Views on developmentFriedmann’s Core and Periphery Model • Shows how some areas become more economically developed than others and why some regions are more wealthier than others

9. Stages • Stage 1 (Pre-industrial). The agricultural society, with localized economies and a small scale settlement structure. Fairly isolated, dispersed and low mobility. • Stage 2 (Transitional). The concentration of the economy in the core begins due to capital and industrial growth. Trade and mobility increase • Stage 3 (Industrial). Due to economic growth other growth centres appear. The main reasons for this are increasing production costs (mainly labour and land) in the core area. • Stage 4 (Post-industrial). The urban system becomes fully integrated and inequalities are reduced significantly.

10. Development is like an electric cable – the power to drive countries from primitive to more advanced states. As the development cable model (right) shows, development is a multi-faceted process At its core is economic development, but to achieve real progress social, political, environmental and personaldevelopment is also needed. Views on Development The Development Cable

11. Development can also be seen as a pathway. Countries develop at different speeds and may cluster at different places What could hinder development? Views on Development The Development Pathway

12. How do we measure development? • Economic Wealth Measured as Gross Domestic Product (GDP) per capita = dividing the monetary value of all the goods and services provided in a country by its total population Gross National Income (GNI) – includes income from overseas investments GDP – preferred by the EU GNI by the UN and USA X Only useful in countries which have many economic transactions i.e. ‘market economies’ rather than the non-money economy e.g. barter and exchange X Hides extremes and uneven distribution of income between regions or socio-economic groupings X Not reflective of the local value of money 2) Purchasing Power Parity (PPI) GDP Shows what per capita income will purchase when the cost of living is taken into account. E.g. In China the cost of living is low so $100 will buy far more there than in the USA

13. This basket of goods costs 112 Indian Rupees in India, the equivalent of £1.50*. To buy the same basket of goods in the UK would cost around £6. The difference in how much goods and services really cost, is why PPP (purchasing power parity) GDP income is used rather than ‘raw’ GDP. Using raw GDP per capita average income in India is about $1000, but PPP GDP per capita income is $2800 *data for Dec 2009

14. Burgernomics • THE ECONOMIST's Big Mac index is based on the theory of purchasing-power parity: in the long run, exchange rates should adjust to equal the price of a basket of goods and services in different countries. This particular basket holds a McDonald's Big Mac, whose price around the world we compared with its American average of $4.20.

16. North South Divide Brandt Commission in 1981

17. Other criteria 2) Social, cultural and welfare criteria • Recognising the complex nature of development is why development is often measured using an index, which combines a range of data • Indices are considered more accurate than single data points such as GDP per capita. Human Development Index (HDI) gives a country a score between 0 and 1 • Enables anomalies to be spotted and identifies where poverty is greatest X No measure of human rights or freedom. There was a separate Human Freedom Index in 1991 but has not been done since. The Human Development Index (HDI) Life expectancy at birth + Literacy rate + Enrolment rate + GDP per capita PPP

18. The development gap • The geography of the development gap is more complex than a simple ‘North-South divide’ • Latin America has HDI levels similar to eastern Europe; China’s HDI and some others in SE Asia are relatively high • South Asia has a concentration of levels below 0.6 • Level in the Middle East are relatively high, although not in Yemen, Syria and Iraq • The picture for Africa is very complex, with the extreme north and south having decent HDI levels, but some regions with shockingly low numbers

19. Other Development Indicators?

20. Infant mortality • The number of children who die before they are five out of every 100 born. • Life expectancy • The average age people can expect to live to • World Freedom Statistics • This is an index which takes into account a range of measures to determine how free people are in a particular country. The index is complex but takes into levels of political and civil liberties, levels of corruption, and levels of political and religious conflict. It generates an index score from 1 (free) through to 7 (not free). • % GDP from Agriculture • The % of total GDP (the value of everything sold and made in a country) that comes from farming. • % GDP from Secondary Sector • The % of total GDP (the value of everything sold and made in a country) that comes from manufacturing and secondary industry. • Population • The total number of people living in a country. • % Population growth • The % change (up or down) in a country’s population – measured annually (every year). • % of population living on less than $1 a day • % of population living on less than $2 day

21. What is this map showing?

22. Life expectancy

23. Infant mortality

24. Under-nourishment

25. Oxford p183 • Over to you qs • On your own qs

26. Plenary Why is it hard to measure the development gap? Is the Brandt Line still valid?

27. Explaining development Do you remember the food crisis of 2008?

28. Explaining development Do you remember the food crisis of 2008? This is probably because you were well-sheltered from the worst because we live in a developed country. P179 Oxford

30. Global food crisis • Which of the following are real causes for the rise in food prices since 2006: Growth of biofuels Rising demand in NICs Climate change Rising demand for cattle feed Diseases wiping out crops Traders hoarding food Change in agricultural policies Rising oil prices Extreme weather Globalisation

31. Global food crisis • Which of the following are real causes for the rise in food prices since 2006: Growth of biofuels Rising demand in NICs Rising demand for cattle feed Traders hoarding food Rising oil prices Change in agricultural policies Extreme weather

33. The food price crisis shows how susceptible less-developed countries are to price rises. • What happened to food prices in 2008? • Why was this? • Using the Philippines as an example, explain how a development gap was shown by the way in which the food crisis affected its people. • What is the development gap?

34. HW Reading Oxford 178-183 • Note taking