Download Development Case Study: Jamaica

Development Case Study: Jamaica
Caribbean island - resorts, etc.
beyond paradise is another world
permanent residents in poverty / earn less money in a year than a night’s hotel bill
this is shielded from tourists
what would you think if a very expensive and exclusive resort were built in your neighborhood and you and
your family, who were economically disadvantaged were expected to work there to serve the needs of
vacationers? welcome the money? resent the wealthy tourists
world is divided between relatively rich and relatively poor
geographers try to understand the reasons for this division and what can be done about it
Development Case Study: Bangladesh
What is development?
development: The extent to which a society is
making effective use of its human and natural
resources.
developing: progress is being made in
technology, production, and socioeconomic
welfare
Continuum with huge global disparities.
MDCs and LDCs
MDC = More Developed Country
(“developed”)
has progressed further along continuum
economic challenge: maintain high level of
development at the new global scale of
economy
LDC = Less Developed Country
(“developing”)
economic challenge: find connections to the
global economy by taking advantage of local
diversity in skills and resources
What is development?
Manufacturing gravel in Trivandrum, India
Measuring Development
Economic Indicators:
GNP = Gross National Product
● created by economists to compare countries
● total value of officially recorded goods and
services produced in a year (inside and
outside state territory)
Measuring Development
Economic Indicators:
GDP = Gross Domestic Product
● goods and services produced within a
country during a given year
● GDP per capita = GDP divided by
population number
● Can mask variation / distribution of wealth
Measuring Development
US GDP = $12 trillion
■ GDP per capita - economic indicator used in HDI (in U.S. $40,000)
● used because per capita income is difficult to obtain
● annual per capita GDP in 2005 avg. $27,000 in all MDCs,
avg $4,000 in LDCs
● $60,000+ in Luxembourg
● $30,000+ in 9 other European countries and Canada and
Japan
● 18 countries per capital GDP below $1,000 (15 - Africa, 3 Asia)
■ GDP per capita can be misleading - doesn’t reflect variation
within a country / doesn’t reflect distribution of wealth
Measuring Development
Economic Indicators:
GNI = Gross National Income
● monetary worth of what is produced within a
country plus income received from
investments outside the country
● GNI per capita = GNI divided by population
● limitations:
○ What about informal economy?
○ Masks uneven distribution of wealth
○ Does not account for production costs
Measuring Development
Economic Indicators:
GNI clearly shows contrast between rich and
poor countries:
2008
Japan
USA
Luxembourg
Nigeria
Indonesia
$31,410
$41,950
$65,340
$ 1,040
$ 3,720
Measuring Development
Economic Indicators: technology and production
● types of jobs (primary, secondary, tertiary)
● productivity per worker (level of mechanization)
● transportation and communication services per
person
Measuring Development
● development in technology and production (part of economic indicators of
development)
○ measure Occupational Structure of the Workforce - percentage of workers employed
in various sectors (many in production of food staples = low development; many in
high-tech industries and services = high development)
■ types of jobs:
● primary - directly extract materials from Earth (agriculture, mining, fishing,
forestry)
● secondary - manufacturers that process, transform, and assemble raw
materials into useful products
● tertiary - provision of goods and services to people in exchange for
payment (retailing, banking, law, education, government). Also includes
former categories of quarternary-sector and quinary-sector.
○ measure Productivity per Worker - sum of production divided by total number of
people in labor force. More productive = higher mechanization
■ measured by value added per worker (gross value of product minus costs of
raw materials and energy) (around $80,000 in US, $70,000 in Japan, $1,000
China, $500 India)
■ MDC workers produce more with less effort - more machines, tools, equipment
■ LDCs - rely on human and animal power
Measuring Development
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requires access to raw materials and energy
■ 20th C - US and Russia - became powerful industrial states b/c wide variety of raw
materials and energy resources
■ UK - abundant coal and iron
■ colonialism - to ensure abundant supply of raw materials for European economic
development. Result: sustained econ. dev. in Europe; stunted econ. dev. in Africa and
Asia. Even after independent, former colonized states still export raw materials to MDCs
and import finished goods and services
■ petroleum - value has grown and financed development
■ cotton and copper - prices have fallen (excessive supply, declining demand) - LDCs with
these have had difficulty achieving development
■ some countries develop without abundant resources through trade (Japan, Singapore,
South Korea, Switzerland)
measure Transportation and Communications Facilities per Person - reflects infrastructure that
facilitates economic activity (motor vehicles, telephones, computers)
■ land line telephones: 500+ per 1,000 inhabitants in MDCs (fewer than 100 in LDCs)
■ motor vehicles: 400+ per 1,000 inhabitants in MDCs (fewer than 100 in LDCs)
■ internet users: 300+ per 1,000 inhabitants in MDCs (fewer than 100 in LDCs)
■ LDCs - gap between haves (usually urban) and have nots (usually rural)--can result in
political unrest
■ contribute to social and cultural elements of development - leisure activities, new ideas,
exposure to cultural diversity
■ cell phones - less costly / available to more - starting to close gap
Measuring Development
Demographic Indicators
● life expectancy at birth (60+ in LDC, 70+ in
MDC)
■ result for MDC??
● infant mortality rate (94% LDC, 99.5% MDC)
● natural increase rate (1.5% LDC, 0.1% MDC)
■ result for LDC??
● crude birth rate (24/1,000 LDC, 11/1,000 MDC)
Measuring Development
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life expectancy at birth = avg number of years a newborn infant can expect to live at current
mortality levels
■ 60+ in LDCs, 70+ in MDCs; gap is greater for females
■ result for MDCs - higher percentage of older people (retired, receive public support), lower
percentage of children under 15 (also must be supported) (about same number of older and
younger people)
■ LDCs - number of young people 6x higher than number of older people
infant mortality rate
■ LDCs - 94% of infants survive, MDCs - 99.5%+ of infants survive
■ reason - malnutrition, illness w/ lack of medicine, dehydration from diarrhea, poor medical
practices b/c lack of education (fatal tetanus - India - unsterilized knives to cut umbilical cord)
natural increase rate
■ 1.5% annually in LDCs, les than .1% in MDCs
■ greater rate = strain on hospitals, schools, jobs, services -- results in expansion, not
improvement
crude birth rate
■ LDCs - 24/1,000; MDCs - 11/1,000
■ crude death rate does not indicate development - b/c diffusion of medical technology from
MDCs, MDCs have higher percentage of older people
Can you imagine living in a country where 1 in 10 infants do not survive to celebrate their first birthday?
What are the leading causes of infant mortality in today’s world?
(malnutrition, illness w/ lack of medicine, dehydration from diarrhea, poor medical practices b/c lack of
education - ex: fatal tetanus in India because unsterilized knives used to cut umbilical cords)
Measuring Development
Social Indicators
● dependency ratio - number of dependents
(young and old) that each 100 employed people
must support)
Measuring Development
Social Indicators
● education and literacy
○ avg. # of school years attended (10 MDC, 2
LDC)
○ student/teacher ratio (twice as high in LDC)
○ literacy rate (98%+ in MDC, <60% LDC)
Why is female literacy rate so important in terms of development?
Measuring Development
Social Indicators
● health and welfare
○ expenditures on health care
○ influenced by diet (calories, protein)
○ health care as government service
Measuring Development
● health and welfare
○ expenditures on health care
○ influenced by diet (calories, protein)
○ many MDCs - health care is a public service
■ Europe - gov’t pays 70%+ of health care costs
■ USA exception - closer to LDC in this measure (private individuals pay 55% of
health care)
○ protection of those who can’t work (sick, elderly, disabled, veterans, widows, single
parents) - Norway, Denmark, Sweden give highest level
Measuring Development
United Nations Human Development Index (HDI)
Combination of factors:
1. per capita GDP (economic)
2. literacy rates (social)
3. school enrollment rates (social)
4. life expectancy at birth (demographic)
Range: 0 - 1
Average: .65
Measuring Development
United Nations Human Development Index (HDI)
Measuring Development
United Nations Human Development Index (HDI)
2000 United Nations Millenium Declaration
Goals by 2015:
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eradicate extreme poverty and hunger
achieve universal primary education
promote gender equality and empower women
reduce child mortality
improve maternal health
combat HIV/AIDS
ensure environmental sustainability
develop a global partnership for development
How can LDCs develop? Models of Development
What is the developed world?
● 40 years ago - places populated with people of
European ancestry; Japan
● Today - Distinctions between MDC and LDC is
blurred:
○ oil-rich Middle East
○ collapse of Soviet Union
○ newly industrializing East Asia
● General North/South pattern still exists
-
Map was the culmination of the Brant Report
Culmination of a study done in 1980
Data indicated that N hem. countries were wealthier than S hem. countries
How can LDCs develop? Models of Development
History of ideas:
Modernization (Rostow)
Dependency (includes World Systems Theory)
Neoliberal Counter-revolution
Sustainable Development
How can LDCs develop? Models of Development
Rostow’s Modernization Model / Stages of
Development
● 1940s-1960s (post WWII, decolonization)
● classic “developed - developing underdeveloped” ladder of development
● assumes that all countries follow a similar path
(European) and learn from each other
● Identified 5 stages
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 1: Traditional
Village in Lesotho. 86% of the resident workforce in
Lesotho is engaged in subsistence agriculture.
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 1: Traditional
Economy
subsistence:
● output not traded or recorded
● barter system
● limited production
● >75% in primary sector
Society
hierarchical
Political
Power
regionally based in the hands of landowners
Values
resistant to change; focus on old traditions
(U.S. before independence)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 2 - Preconditions for Takeoff
The use of some capital equipment can help increase
productivity and generate small surpluses which can be
traded.
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 2: Preconditions of takeoff
Economy
-- surplus of agriculture and capital
-- expansion of trade and manufacturing
-- necessity of external funding
-- some growth in savings and investment
Society
beginnings of a commercial class with some
urbanization
Political
Power
centralized national government
Values
rising spirit of progress and openness
(U.S. - early 1800s)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 3: Takeoff
At this stage, industrial growth may be linked to primary
industries. The level of technology required will be low.
(image: diamond mine in Lesotho)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 3: Takeoff
Economy
-- rapid expansion of industry
--surge of technology
--commercial agriculture
--number employed in agriculture declines
Society
--increasingly dominant entrepreneurial class
--some regional growth
Political
Power
powerful groups encourage modernization
Values
increased investment of capital for profit
(U.S. - 1850s)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 4: Drive to maturity
As the economy matures, technology plays an increasing
role in developing high value added products.
(Image: Automotive plant using industrial robotics
technology.)
Models of Development
Rostow’s Modernization Model / Stages of
Development Stage 4: Drive to maturity
Economy
-- technology extends to all sectors
--labor-saving devices are made
--growth becomes self-sustaining / wealth
generation enables further investment
Society
--urbanization
--increased in skilled and professional workers
Political
Power
industrial leaders are highly influential
Values
--emphasis on technology
--expectation of progress
(U.S. - late 1800s)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 5: Age of Mass Consumption
Service industry dominates the economy -- banking, insurance, finance, marketing,
entertainment, leisure and so on.
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 5: Age of Mass Consumption
Economy
--high output levels
--more use and production of durable goods
--service sector dominates (>50%)
Society
--new middle class
--shift to the suburbs
--population growth stabilizes
Political
Power
--social welfare
-more resources for military and security
Values
--increased acquisition of consumer goods
(U.S. early 1900s - present)
How can LDCs develop? Models of Development
Rostow’s Modernization Model / Stages of
Development
based on economic structural change:
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investment
substitution of capital for labor
technology transfer
large-scale industrialization projects
(LDCs should follow model of economically
powerful countries / European countries in order to
develop.)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Example: Four Asian Dragons
(South Korea, Singapore, Taiwan, Hong Kong)
● former colonies or occupied territories
● development by producing manufactured
goods with low labor costs
Models of Development
Rostow’s Modernization Model / Stages of
Development
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Four Asian Dragons: South Korea, Singapore, Taiwan, Hong Kong
■ Singapore and Hong Kong
● British colonies (until 1965 and 1997)
● virtually no natural resources
● large cities surrounded by small amount of rural land
■ South Korea and Taiwan
● occupied by Japan until post -WWII
● influenced by Japan’s success with international trade approach
■ all promoted development by concentrating on producing a handful of manufactured
goods, esp. clothing and electronics / low labor costs made possible to sell them
inexpensively
Models of Development
Rostow’s Modernization Model / Stages of
Development
Example: Petroleum-rich Arabian peninsula
(Saudi Arabia, Kuwait, Bahrain, Oman, UAE)
● 1970s - petroleum prices high
● overnight transformation
Models of Development
Rostow’s Modernization Model / Stages of
Development
used to be least developed - escalating petroleum prices in 1970s - now are some of the wealthiest
large scale project - housing, highways, etc. /
diffusion fo consumer goods
Islamic practices still dominate
images - Dubai - first pic is 1990, second is same street in 2007
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Petroleum-Rich Arabian Peninsula States
■ Arabian Peninsula: Saudi Arabia, Kuwait, Bahrain, Oman, UAE
■ escalating petroleum prices in 1970s transformed “overnight”
■ large-scale projects
■ factories
■ diffusion of consumer goods
■ some Islamic religious principles conflict with business practices of MDCs (exclusion of
women, womens’ clothing, prayers)
http://www.condohotelsdubai.com/articles/dubai-incredible.html
Models of Development
Rostow’s Modernization Model / Stages of
Development
Criticisms:
● does not consider geographic differences
● Western bias / assumptions of “progress”
● requires infrastructure
● does not consider global scale / effects of other
countries (global market, competition for
resources)
● increased dependence on MDCs
Models of Development
Dependency School of Thought
EXPLANATION:
● 1970s:
○ reality - few LDC’s progressing linearly from
stage to stage as Rostow predicted
○ concerns with human welfare
● LDCs are limited by economic and political
relationships with MDCs.
● International “division of labor”
● inevitable result of capitalist drive?
Models of Development
Dependency School of Thought
EXPLANATION:
● global economy creates structural
circumstances difficult for poorer regions to
overcome
○ ex: concentration of wealth in certain areas,
unequal relations between places
Poor countries face different obstacles than
Western states of Rostow’s model, will not
“modernize” in same way
Models of Development
Dependency School of Thought
Strategies to achieve development:
● small-scale and rural enterprises
● import substitution (manufacture own products)
● nationalization
Models of Development
Dependency School of Thought
colonial origins
Models of Development
Dependency School of Thought
colonial origins
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
core
periphery
semi-periphery
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
Immanuel Wallerstein, a leading advocate of the approach, uses the same terminology. He characterizes the
world system as a set of mechanisms which redistributes resources from the periphery to the core. In his
terminology, the core is the developed, industrialized, democratic part of the world, and the periphery is the
underdeveloped, raw materials-exporting, poor part of the world; the market being the means by which the core
exploits the periphery.
The core nations primarily own and control the major means of production in the world and perform the higherlevel production tasks. The periphery nations own very little of the world’s means of production (even when they
are located in periphery nations) and provide less-skilled labor. Like a class system with a nation, class positions
in the world economy result in an unequal distribution of rewards or resources. The core nations receive the
greatest share of surplus production, and periphery nations receive the least. Furthermore, core nations are
usually able to purchase raw materials and other goods from noncore nations at low prices, while demanding
higher prices for their exports to noncore nations.
1. World economy has one market and a global division of labor.
2. Almost everything takes place in context of world economy.
3. World economy has a three tier structure
three-tier structure - explains interconnections between places in the global economy; spatial framework for how
economies develop over time and space
core and periphery describe both processes and regions
semi-periphery - places where core and periphery processes are both occurring
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
core processes
● generate wealth in a place for people
within that place
○ require higher levels of education
○ sophisticated technology
○ higher wages, benefits
core regions
● high socioeconomic prosperity
● dominate world economy
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
peripheral processes
● generate little wealth for people within
that place
○ lower levels of education
○ lower salaries
○ less technology
peripheral regions
● poor
● dependent on core
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
role of the semiperiphery
● region which practices both
core and peripheral
processes
● buffer zone:
exploited by core, exploits
periphery
○ more power than
periphery
○ heavily influenced by
the core
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
Applicable at scales beyond the state (country)
● within a region
● within a state (country)
● in a local area
Models of Development
Dependency School of Thought
Neocolonialism
● Economy of LDCs controlled by MDCs.
● Global economy - this is difficult to overcome
○ unequal distribution of resources
○ unequal relations between places
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
Major differences from Modernization Model:
● sensitive to geographic context; does not
assume that socioeconomic change will
occur the same way in all places
● equal wealth not possible in capitalist global
economy
● makes power relations between places
explicit
Models of Development
Dependency School of Thought
Criticisms:
● Offers causes but no solutions
● Little hope for prosperity in LDCs
● Little attention to geographic differences
REVIEW
What is development?
How is it measured?
How did Rostow explain development?
How do Dependency Theorists explain
development?
How did Wallerstein explain development?
What are the key differences between the
Modernization and Dependency schools of
thought?
Models of Development
Neoliberalism
Origin
post WWII - Decolonization wave →
● International bank loans to new countries
● Formation of International Monetary Fund (IMF) and World Bank
1980s - End of Cold War →
● international community used loans to discourage state-owned industries,
encourage free trade
Reaction to bottom up strategy of dependency theorists - major goal is to improve
human welfare by directing resources towards traditionally poor sectors of society to
meet basic needs
Goal - more even distribution of wealth, grow middle class to buy import substitution
goods
Models of Development
Neoliberalism
Theory
● Government intervention into markets is inefficient and undesirable.
●
Protectionism* and state-owned industries perpetuate dependency.
*protectionism
imposing high tariffs on foreign goods to protect home grown industries
•
protected, state-owned industries not forced by markets to be
competitive in price and quality - keeps states dependent on MDC’s
•
Championed by free market capitalists with end of Cold War:
Reagan, Margaret Thatcher
Models of Development
Neoliberalism
• Strategies to achieve development
• Loans → better infrastructure → more businesses → more
taxes to repay loan
• Structural adjustment loans have conditions attached to guide
how the money should be used.
• Origin: 1980’s - end of Cold War?
• Reaction to bottom up strategy of dependency theorists major goal is to improve human welfare by directing
resources towards traditionally poor sectors of society to
meet basic needs
• Goal - more even distribution of wealth, grow middle class
to buy import substitution goods
Models of Development
Neoliberalism
Strategies to achieve development
Two major lenders for international loans:
● International Monetary Fund (IMF)
● World Bank
○ International Bank for Reconstruction and
Development (IBRD)
○ International Development Association
(IDA)
Models of Development
Neoliberalism
Strategies to achieve development
Structural Adjustment Loan Examples:
(“strings” / conditions attached to loans)
● sell government-owned industries to the private
sector
● free trade
● allow own currency to devalue to make exports
attractive
● health and education investment
● government reforms
● require better fiscal management
● the type of projects allowed
Models of Development
Neoliberalism
Results ● Private ownership of services and
businesses
● Economic globalization
● Corporations control regions and states
Models of Development
Neoliberalism
Example: China
Mao Zedong
● leader of 1949
Communist Revolution
● “Great Leap Forward” (1958)
● agricultural communes
● state owned factories (“backyard” industry)
Result: 20 million starve by 1962
Result of Great Leap Forward:
9 million starve in 1959 alone - 20 million by 1962
poor quality industrial goods due to “backyard industry” - production of
steel and manufacturing farming equipment within communes
Models of Development
Neoliberalism
Example: China
● Mao’s successor:
Deng Xiaoping
Capitalist reforms:
● farmers can sell surplus
● encourages foreign investment
● competition between state-owned factories
Result: 2nd highest GDP in world after US,
GDP per capita = $5,400
Models of Development
Neoliberalism
Criticisms:
● Infrastructure projects that are expensive
failures.
● Large debts that can’t be repaid.
Models of Development
Sustainable Development
Theory: Progress should not come at the expense of future
generations.
Concerned with:
● climate
● biodiversity
● forests
● pollution
● resources
How to address these concerns / policies in line with
sustainable development?
efficient renewable fuels
ecotourism
drugs from rainforest plants
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China - economic development at cost of environmental
pollution
Models of Development
Sustainable Development
Requires New
Indicators??
Ideas?
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potential ideas:
air and water quality
percentage of land
in nature preserves
deforestation rate
energy efficiency
number of
threatened species
Models of Development
Sustainable Development
Strategies to achieve development
Appropriate Technology Not Appropriate
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looms
efficient stoves
clay-pot water filters
composting systems
bicycle rickshaws
paper strips for
disease testing
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oil-fired power plants
infant formula
chain saws
combine harvesters
Models of Development
Sustainable Development
Strategies to achieve development
Fair Trade
● protect workers - rights, safety, wages
● protect producers - cooperatives for loans
● international standards
largest organization in
North America:
Ten Thousand Villages