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APHG Ch. 9
Development
 Improving material conditions
 Diffusion of knowledge & technology
 Nations & regions clustered at high & low ends
 MDC v. LDC
 3 factors impact variation
 Economic = GDP per capita
 Social = literacy & amount of education
 Demographics = life expectancy
 Together = HDI ratio created by UN (1.0 = highest)
Economic Indicators
1. HDI only counts GDP per capita
 >$20,000 in MDC and <$1,000 in LDC
 Highest ones >$40,000, lowest <$500
 Gap widening
 Does NOT indicate distribution
 GDP per capita PPP = adjusted for purchasing power parity
2. Types of Jobs or Economic Structure
 Primary, Secondary & Tertiary
 % pop. Working in Ag. >75% in LDC, <5% in MDC
 Efficiency & global competition decrease primary &
secondary jobs and increase tertiary in MDCs
Economic Indicators
3. Productivity
 MDC produce more with less labor
 LDC use more human or animal labor, less machinery
 Measured by value added per worker
 U.S. avg $40,000 vs. LDC avg $2,500
4. Raw Materials
 Inputs & energy sources
 Europe had coal & iron ore to promote 19th century industrial
revolution
 Colonial period sustained Europe’s development & retarded
Africa & Asia’s
 Some nations develop w/o raw materials
Economic Indicators
5. Consumer Goods
 Nonessentials (beyond food, clothing, shelter)
 Production promotes expansion of manufacturing &
generates increase in GDP
 3 items = good indicators of society’s development level
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Vehicles, telephones, televisions
Accessible to almost all in MDC & vital to economy
1:1 ration in MDC over 100:1 ration common in LDC
Gaps in LDCs from urban to rural
 Increase exposure to diversity & impact social
characteristics
Economic Indicators
6. Gini Coefficient: measures income disparity
between wealthy & poor in a nation
 0=complete equality, 1=complete inequality
 MDCs may have higher # than LDCs
 Best nations ≈.2, Worst nations ≈.6
 Does not address wealth (only income)
Greece
U.K.
Merica!
Social Indicators
1. Education & Literacy
 Quantity = avg # years (10 in MDC vs. 2 0r 3 in LDC)
 Quality
 student/teacher ratio (LDC = 2x MDC)
 Literacy – MDC >95%, LDC < 1/3
 Gender gap in LDCs – avg 60F:100M
 MDCs publish more
 Textbooks predominantly in Eng, Germ, Russian, or
French even in LDCs
 LDC often focus on Education as key to development
but funds in short supply
Social Indicators
2. Health & Welfare
 MDC have lower ratios of people to doctors, hospitals
 Often health care = public service in MDC
 Access to utilities and sanitation = issues
 Diet impacts health
 Most MDCs = more calories & protein than needed
 Most LDCs = less calories & protein than needed
 MDCs = public assistance for sick, disabled, veterans,
orphaned, widows, unemployed etc.
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Highest levels in Scandinavian countries
Slower economic growth = program maintenance is a hardship
Social Indicators
3. Gender Inequality Index
 UN started calculating in 2010
 3 dimensions
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Reproductive health: MMR (Maternal mortality), AFR
(Adolescent fertility)
Empowerment: Share of parliamentary seats & higher
education attainment
Labor market: Participation in the workforce
 Range from .04 in best nations to .7 in worst
(Netherlands to Yemen)
Demographic Indicators
1. Life expectancy in HDI
 MDCs ≈ mid 70s, LDCs ≈ early 40s
 Gap larger for women
 MDCs have increasing elderly % & decreasing % <15
2. Infant Mortality
 MDCs ≈ 1%, LDCs ≈ 10%
3. NIR
 >2% in LDC, <1% in MDC
 LDCs need increased income to cover increased population vs.
improving development level
4. Crude Birth Rate
 Range from 8 per 1000 to 50 per 1000
 Economic & social factors decrease # babies in MDCs
 10 to 20 times more mothers die in childbirth in LDCs
Other Indices
 GPI – Genuine Progress Indicator
 Modifies GDP based on ‘quality of life’
 Considers environmental impact, social values, level of
equality etc.
 GNH – Gross National Happiness
 Origins in Bhutan
 Includes 9 domains of wellness, mostly measured via
survey data
 How was 2013?
Distribution of MDCs and LDCs
Distribution of MDCs vs. LDCs
 9 regions based on development
1. Anglo-America = MDC
2. Latin America = upper LDC
3. Western Europe = MDC
4. Eastern Europe = lower MDC
5. East Asia = Upper LDC
6. South Asia = Upper LDC
7. Southeast Asia = LDC
8. Southwest Asia & North Africa (Middle East) = LDC
9. Sub-Saharan Africa = Lower LDC
 Two other areas not part of 9 major regions = Japan and
South Pacific = MDC
Distribution of MDCs vs. LDCs
 North/South Split
 MDCs mainly north of 30
degree North latitude
 LDCs south of 30 degree
South latitude
 Core-Periphery – using
north polar projection p.
307
 MDCs = inner core =
dominant economic role
 LDCs = peripheral
locations = dependent on
MDC core
Anglo-America – HDI .93
 Less diverse language & religious patterns
 95% English & 95% Christian
 Tensions with diversity relatively small vs. other
regions
 Wealth of raw materials = important producer
 Main exporter of:
 Leisure services, entertainment, mass media, sports etc.
 Important food
 Information processing systems
Western Europe – HDI .91
 Strong national identities forged from language &
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religious differences (previous comp. led to wars)
Post WWII cooperation – eliminating economic
barriers
NIR ≤ 0, population growth mainly Muslim or Hindu
immigrants
Lacks raw materials: need to import food, energy,
minerals since end of colonies
Compensate by providing high-value goods/services
like luxury items, banking services etc.
Eastern Europe – HDI .75
 Abundant reserves of raw materials
 Historically = MDC but low HDI
 Rapid development in 50s & 60s under communism
 Soviet 5 year plans for heavy industry
 Moved manufacturing near raw materials vs. near markets
 Numbers inflated under communist government?
 1990s dismantled communist structures
 Uncontrolled pollution, closing inefficient factories, ending
subsidies, increased unemployment & inflation
 Czech Republic, Hungary & Slovenia convert rapidly to
market economy.
Japan – HDI .92
 Remarkable development considering ratio of
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population to resources—high physiological density
Land intensively farmed
Imports most meat & grain & raw materials
Lower labor & production costs gained global foothold
Switched to what they were best at:
 Abundant supply of skilled labor
 Specializing in high-quality, high-value items
 Educated/skilled labor force, R&D
South Pacific – HDI .92
 High HDI in Australia & New Zealand but rest = LDC
 Less central to global economy
 Smaller population & peripheral location
 Culturally tied to Britain
 Net exporters of food & resources
 Economic ties to Japan & Asia
Latin America – HDI .76
 Culturally, majority = Spanish or Portuguese &
Catholic
 Masks diversity of heritage from natives & Africa
 More urbanized than other LDC
 Population concentrated on Atlantic Coast
 Proximity to U.S. aids some development
 Brazil & Argentina export wheat & corn
 Development hindered by inequitable distribution of
land and wealth
East Asia – HDI .70
 China = largest size but low per capita GDP, on track to
become 2nd largest economy this year or next
 Communist control of production & distribution
loosening
 Intensive farming required to feed population
 Lack of farming risks starvation, famine
 Lower NIR than other LDC
 Growth can help improve standard of living vs. support
increased population
Southeast
Asia
–
HDI
.68
Indonesia = largest population w/one of highest arithmetic densities
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on Java
½ century of warfare in various areas
Tropical climate limits intensive grain production
Mountains, volcanoes & typhoons = natural limits
Rice = most important food
 Exported from Thailand & Vietnam
 Imported to Malaysia, Philippines etc.
 Harvest many products for manufacturing
 Palm oil, copra, natural rubber, kapok (insulation), abaca (fabric/rope),
tin & oil
 Rapid manufacturing development in Thailand, Singapore, Malaysia &
Philippines
 textiles etc. with cheap labor
 Auto center in Thailand
 Reforms in mid to late 1990s to restore international confidence =
reduced standard of living.
Middle East – HDI .63
 Mostly desert but oil = major asset (but not for ALL)
 Tension between nation with and nations without
 Must import most products
 Oil = only region out of main 9 with trade surplus
 Only region where lack of funds does not prevent
development
 Challenge to promote development w/o eroding traditional
Islamic values (95% of population)
 Internal cultural disputes & revolt against Anglo-Am or
European customs
 Israeli issue means more $ put toward military vs.
development
South Asia – HDI .54
 World’s 2nd highest population & 2nd lowest per capita
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income
High population density & NIR
Many resources but ratio of resources to population
unfavorable
Leads production of some products
Green Revolution
 Big help but monsoon rains still dictate productivity
Sub-Saharan Africa – HDI .46
 Lower population density than other LDCs
 Contains resources valuable to development
 Least favorable prospects
 Highest % of poverty, poor health & lack of education
 Colonial influence
 Mainly export raw materials
 Landlocked status and decreased prices for materials hurt
 Frequent wars
 Imbalance between population & capacity of land
 Can’t support large concentrations
 World’s highest NIR rates
How will everyone else get here?
Model of Devlopment
Rostow’s
Development Model
 5 stages of Development
(take off model)
 MDCs completed stage 1-3
earlier – now in 4 or 5
 LDCs in stages 1-3
 Money required to advance
 International Aid = $
 International Aid usually
means debt (not part of
model)
Rostow
Rostow countries
 2 groups chose Rostov model vs. self sufficiency in mid
20th century
 1. Persian Gulf Area
 Use petroleaum $ for housing, infrastructure, airports
 Leads to supranationalism--OPEC
 Started producing steel, aluminum, & chemicals for
world export
 Diffusion of goods changes landscape (globalization)
 Conflict between Islam & MDC business tactics
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Women’s restrictions
All business halting for prayer several times daily
Rostow countries
 2. East/SE Asia
 ‘Asian tigers’
 Singapore, Hong Kong, Taiwan, S. Korea
 Virtually no resources under imperialism
 Post WW2: Began focusing on handful of goods to
produce using lower cost advantage
 Exploits cheap labor
 Colonialism still lingers: wealth concentrated in handful
of ppl
 Move from periphery to semi-periphery or core
 Social mobility limited by caste system (Hindu)
Wallerstein’s World Systems Model
 Core (majority MDCs)
 Geographically advantaged,
exploit peripheral areas, mainly
N. America & Europe, also
Japan & Australia
 Periphery
 least developed; exploited for
cheap labor, raw materials, and
agricultural production.
 Semi-periphery
 exploited by the core and
exploiting the periphery areas
 Recent expansion into
manufacturing areas no longer
profitable in core
Obstacles to LDC Development
 Many making progress with key indicators
 But, MDC/LDC gap widening (1st World Problems)
 Last 20 years
 LDCs GDP per capita doubled and NIR down 5%
 MDCs GDP per capita tripled and NIR down 83%
 Am. Spend more on cosmetics than cost of building schools for
all children
 Eur. Spends more on ice cream than cost of providing working
indoor plumbing to all
 2 major obstacles to rapid development
 Adopting policies that promote development
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Self-sufficiency model vs. International trade model (Rostow)
 Finding funds to pay for development
Self Sufficiency/Balanced Growth Model
 Most common in 20th century
 Adopted by India, China, most of Africa & Eastern
Europe
 Invest equally across sectors of economy & regions of
nation
 Modest growth
 Fair to urban & rural
 Reducing poverty
 Protects infant-industries with tariffs, quotas, licenses
etc.
Self Sufficiency/Balanced Growth Model
 Example: India
 Effective trade barriers on imports & exports
 Did not allow converting rupees to other currencies
 Government subsidized some industries & controlled
others
 Problems
 Protection of inefficient industries
 Lack of competition keeps prices high & quality low
 Large bureaucracy = abuse & corruption easily develop
International Trade Model
 Identify distinctive assets (comparative advantage)
 Expand distinct local industries to world market
 Use to finance further development
 International competition forces continuing
improvement of processes & products
International Trade Model
 Problems
 Uneven resource distribution (ex. of oil in Middle East
won’t work for everyone etc.)
 Market Stagnation – world market expanding slower
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Limited population growth in MDCs
LDCs must capture sales from established competitors vs.
supply for expanded demand
Increased dependence on MDCs – must import basic needs
that are not part of the few goods being focused on (drains
profits)
 Gained popularity in 1990s after India converted and
doubled GDP growth rate
Financing Development
 Loans
 Borrow to build infrastructure
 Main lenders = World Bank &
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IMF = controlled by MDC
Theory = infrastructure brings
investors/businesses
Problems with expensive failures
– don’t work or don’t attract
investors = can’t repay debt
Lack of repayment stops loans =
stops building = damages
economic stability in MDCs
Canceling or refinancing debts =
MDCs require unpopular
structural adjustments =
political unrest
 Transnational Corporations
 Initially, most with headquarters in
U.S.; recent: Japan, Germany,
France, UK
 Private investment in LDCs
increased 10x in 1990s
 Transfers of manufacturing &/or
assembly within a corporation
common
 Most $ going from MDCs to MDCs
 11 nations in Asia & Latin America
top LDC recipients
 China gets about 20%
 Brazil about 15%
 Others include: Argentina, Chile,
Mexico, India, Indonesia,
Malaysia, South Korea, Thailand,
Turkey & Russia