Economic Choices in Emerging Economies: Challenges and Solutions

1. Emerging Economies • Key Terms • developing nations, newly developed nations, welfare state, nationalization • Find Out • • What are the important economic choices that developing and newly developed nations must make? • • How have economic choices affected the development of nations in Latin America and Africa? Section 2 Introduction-1

2. Emerging Economies • Understanding Concepts • Comparative GovernmentWhat are the differences and similarities of socialist governments and communist governments? • Section Objective • Discuss economic problems that have challenged developing nations and attempts to solve those problems. Section 2 Introduction-2

3. As many Latin American nations developed their economies, land reform turned some toward socialism. In Chile, a socialist government led by Salvador Allende began an ambitious program to break up large land holdings and redistribute land to the people. In 1973 the army overthrew Allende, established a military government, and ended land reform and socialism in Chile. Section 2-1

4. I. Developing and Newly Developed Nations (page 772) • A.Developing nations are states with little or no industry. • B.Newly developed nations are states that have had significant or rapid industrial growth in recent years. Section 2-2

5. I. Developing and Newly Developed Nations (page 772) Section 2-3

6. I. Developing and Newly Developed Nations (page 772) If you were the leader of a newly developing nation, what economic model would you want to follow? Explain. Answers will vary. Discuss capitalism, socialism, or a mixed system. Section 2-4

7. II. The Economic Choices (pages 722–724) • A. Some developing and newly developed nations rely on the free market, trade and contacts with the West to develop their economies; others rely on socialist economic models. • B. Under socialism the government only owns and controls some factors of production. • C. Socialists believe that wealth should be distributed as equally as possible. They try to achieve this goal by making basic goods and social services available to everyone. • D. Critics of socialism claim socialist policies create a welfare state. Section 2-5

8. II. The Economic Choices (pages 722–724) Do you think government should have a major role in the economy? Why or why not? Answers will vary. Discuss advantages of specific services and regulations of government. Section 2-6

9. III. Searching for Economic Answers (pages 724–726) • A. Socialist governments in developing and newly developed countries use more central planning than developed socialist countries do. • B. Socialist governments often take control of industries by nationalization. • C. Many developing nations, especially in Latin America, have a history of foreign-owned industries. • D. Nationalization in Latin America has been both an economic policy and a symbol of anti-colonialism. Section 2-7

10. III. Searching for Economic Answers (pages 724–726) • E. Until recent moves toward free enterprise, Israel had a moderate socialist economy. • F. After independence, many African nations tried to develop economies based on one cash crop or one resource for trade. • G. Economic difficulties forced African countries south of the Sahara to take on $130 billion worth of debt by the 1980s. Section 2-8

11. III. Searching for Economic Answers (pages 724–726) How do you think central planning by the government can be helpful in a developing nation? Answers will vary. See Searching for Economic Answers on text page 724. Section 2-9

12. IV. Socialism’s Practical Problems (page 726) • A. Socialist ideology remains a popular and widely held belief in the developing world. • B. Socialism often fails to live up to its promises because capital investment is a primary need for developing economies. Failure of large-scale economic planning in Eastern Europe has raised doubts that it can work. • C. Western governments have exercised influence and pressure in favor of a combination of free markets and democracy in developing nations. Section 2-10

13. IV. Socialism’s Practical Problems (page 726) How do you think the socialist model can be improved? Answers will vary. See Socialism’s Practical Problems on text page 726. Section 2-11

14. Checking for Understanding • 1. Main Idea Create a graphic organizer like the one below. In the left box, identify the economic issues facing developing countries. In the right box, list policies some have adopted to promote economic progress. • Answers might include: Issues—foreign ownership of industry, how to achieve rapid industrial growth, development of cash crops for export; Policies—nationalization of industry, centralized planning, agricultural communes, acceptance of foreign aid and loans Section 2 Assessment-1

15. Checking for Understanding • A. nations that have had significant or rapid industrial growth in recent years • B. the process by which a government takes control of industry • C. nations only beginning to develop industrially • D. a nation that has an economic system that provides many welfare programs Match the term with the correct definition. • ___ developing nations • ___ newly developed nations • ___ welfare state • ___ nationalization • C • A • D • B Section 2 Assessment-2

16. Checking for Understanding • 3. Identify centralized planning, kibbutzim. • Centralized planning is government control of the economy. • Kibbutzim are collective agricultural communes. Section 2 Assessment-3

17. Checking for Understanding • 4. Why have many Latin American industries been foreign-owned? • Many Latin American industries have been foreign-owned because of their colonial history or their reliance upon foreign investment. Section 2 Assessment-4

18. Checking for Understanding • 5. What factor contributes to socialism in Africa? • Some African leaders adopted socialism because they viewed Western capitalism as another form of colonialism. Section 2 Assessment-5

19. Critical Thinking • 6. Making Comparisons Analyze the economic choices that developing and newly developed nations must make in an increasingly interdependent global economy. • Developing nations may seek to industrialize as rapidly as possible, whereas newly developed nations may seek to sustain their rate of growth and influence the world economy. Section 2 Assessment-6

20. Comparative Government Review the characteristics of economies under socialist governments and under communist governments. Create an organizational chart that illustrates decision making under each of these types of government. Section 2 Concepts in Action