Chapter Nine - Development

Chapter IX - DevelopmentAP Human Geography Chapter Nine - DevelopmentSeth Adler

I. Why Does Development Vary Among Countries?a. Development Process of improving conditions through the diffusion of technology and knowledge.b. More Developed Country (MDC) Progress further along the development process.c. Less Developed Country (LDC) Earlier stage of development.d. Human Development Index (HDI) A measurement of a countrys level of development, created by the UN, and includes three factors, economic, social, and demographic.

A. Economic Indicators of Development The economic factor is based off of gross domestic product (GDP) per capita. The social factors are based off of literacy rate and amount of education. The demographic factor is life expectancy.

a. The highest HDI possible is 1.0(1) Since 1990s(2) Highest in Europe and Candai. Highest country is Norway (0.971)ii. Lowest is Niger (0.340)

1. Gross Domestic Product Per Capitaa. Gross Domestic Product (GDP) The value of the total output of goods and services in a year.(1) Divide by population(2) MDC > 30K; LDC > 3Ki. US - $45,600

2. Types of Jobsa. Primary Sector Workers directly extract materials from Earth.(1) Agricultural, mining, fishing, and forestryb. Secondary Sector Manufacturers that process, transform, and assembles the raw matericals into products.c. Tertiary Sector Provides goods in exchange for money.(1) Retailing, banking, law, education, and government Primary sector decreased in LDCs, but higher than MDCs Secondary sector decreased in MDCs, so less than in LDCs Tertiary sector large in MDCs

3. Productivitya. Productivity Value of a product compared to the amount of labor it took to make.(1) Higher in MDCsi. Access to more machinesb. Value Added Gross value of the product minus the costs of the raw matericals and energy.(1) High in US and japan; Low in China and India

4. Consumer Goodsa. Vihacles, telephones, and computers are important in MDCs.

B. Social Indicators of Developmenta. MDCs have better education, hospitals, and welfare.

1. Education and Literacya. Two measures of education are student/teacher ratio and literacy rate.(1) LDCs S/T Ratio in elementary is 30 rather than 20 in MDCsb. Literacy Rate Percentage of a population that can read and write.(1) MDCs Over 98%, rather than 60%c. Education receives higher GDP in LDCs.

2. Health and Welfarea. People in MDCs receive more caloric intake than needed, where as people in LDCs dont receive enough.b. MDCs spend a higher % of GDP on health (8%).c. In the US, individuals have to pay for 55% of medical expenses, whereas in Europe, individuals pay 30%d. In recent years, economic growth has slowed wheres people needing public assistance has increased.

C. Demographic Indicators of development

1. Life Expectancya. Better health in MDCs allow people to live longer.(1) MDC 70s; LDC 60s(2) Males live longer in LDCs and less in MDCsb. The number of young people in LDCs are 6x higher than the elderly.

2. Infant Mortality Ratea. Better health permits more babies to survive in MDCs(1) MDC 99.5% survive; LDC 94% survive

3. Natural Increase Ratea. Natural increase rate is higher in LDCs(1) MDC 0.2%; LDC 1.5%

4. Crude Birth Ratea. Higher crude birth rates in LDCs(1) MDC 12 per 1000; LDC 23 per 1000b. Crude death rate does not indicate development(1) Higher in LDCs because medicine is helping and in MDCs, the elderly are dying.

II. Where are MDCs and LDCs Distributed?a. 9 major regions are North America, Europe, Latin America, East Asia, Southwest Asia (With Northern Africa), Southeast Asia, Central Asia, South Asia, and Sub-Saharan Africa

A. More Developed Regionsa. 2 regions are considered more developed(1) North America and Europeb. North-South Split(1) Regions above 30o N latitude are MDCs

1. North America: HDI 0.95a. 13th place(1) Highest in GDP and literacy rate, but low in education and life expectancyb. Used to be one of the worlds major manufacturer in steel and cars, but now it is Japan and Europe.c. The large number of health-care providers is because of the private sector.d. The region also provides entertainment, mass media, sports, and other leisure activities.e. Subprime loans were made to buisnesses who cannot repay them.f. Worlds leading food exporter.

2. Europe: HDI 0.93a. During the Cold War Era (1940s-1990s), Europe was regarded as 2 regions, a West closely linked to the United States, and a Communist East. Since the fall of Communism, the 2 regions have become closer.b. The elimination of economic boundaries have made the European Union the richest market.c. Core area are: Germany, France, Italy, Switzerland, Netherlands, and Luxembourg.d. Because the Eastern countries lag in development, Europe is below North America.e. Dependent on trade, both within and international.(1) Make high-value goods and survaces, such as cars, banking, and insurancef. Unemployment rates are high and the government is fighting a recession

3. Russia: HDI 0.73a. Under communism, the Soviet Union had 5-year goals for the entire region to help build roadways, canals, goods, agriculture, and minerals.b. Before the Soviet Union, Russia was a rich country. Its HDI was above 0.9 and now it is below 0.8.c. Unemployement was high.

4. Japan: HDI 0.96a. Third area of high HDIb. Development is remarkable because of the unfavorable ratio of population to resources.c. Took advantage of people willing to work hard for low pay.d. More time on education and training.

5. Oceania: HDI 0.90a. Although the HDIs in Australia and New Zeland are high, the remaining islands are less developed.b. Learder in mining minerals and exporting food to the UK.c. Economies are tied with Japan and other Asian countries.

B. Less Developed Regions

1. Latin America: HDI 0.82a. Located mostly in Brazil, Argentina, and Buenos Aires.b. Level of development varies sharply(1) High level of development in large cities and high GDP in the costal cities, but low development in central Latin America and islands.i. Clearing forests for moneyc. Inadiquate income distribution(1) Wealthy families control most of the land(2) Tenent farmers give food away to developed countriesd. Economy is linked with the US so they are also hit hard by the recession.

2. East Asia: HDI 0.77a. The economy of East Asia and the world is being controlled by China.b. Used to be wealthy, but after civil wars and invadors, they dropped behind Europe.c. In 1949, when the Communist party won a civil war, they set up the Peoples Republic of China.(1) Priority in the new economy was given to people in rural areas and tenant farmers.d. Farmers rented land from the government, had to grow a certain amount of type of crop, they could then sell any above the minimum requirement. e. Manufacturing has been increasing in China. By paying workers low saleries, they produce 2/3rds of the worlds microwaves, DVD players, photocopiers, and shoes.f. By partering with Wal-Mart, they are pushing down prices for the products, but the workers are getting paid less. The recession has slowed economic growth because of declining global demand for manufactured goods.g. Weaknesses remain in Chinas economic performance.(1) Management is weak, no legal protection, bad banking.(2) Increasing amount of pollution.

3. Southwest Asia and North Africa: HDI 0.74a. Mostly desertb. Middle Eastc. There is a large gap of GDP between countries that have and do not have patrolium.(1) Saudi Arabia and the United Arab Emerities have petroleum(2) Border Persian Gulfd. Islam dominates the economy.(1) Workers stop several times a day to pray(2) Shopkeepers let people unwrap their payer rugs to pray(3) Women have low literacy ratee. Need to find a way to balance development and religion.f. Several internal conflicts like war and terrorism.4. Southeast Asia: HDI 0.73a. Most populous countries are Indonesia, Vietnam and Tailand and the Phillipenes.b. Tropical climate limits cultivation.(1) Intense heat(2) Rainfall(3) Volcanoes(4) Hurricanesc. People are concentrated on Java because the soil is rich from volcanic ash and the Dutch have their colonial headquarters there.d. Because of the distince vegetation, farmers harvest products that are used to make things like tin, rubber, coconut oil, and rice.e. This region has suffered from warfare.(1) France and the US fought to precent Communism on Vietnamf. Thailand, Singapor, Malaysia and the Philippeans have been developing.g. Economic growth has slowed(1) It was once achieved by cooperation between manufactures and government.(2) Lately, government officials invested unwisely and are corrupt.

5. Central Asia: HDI 0.70a. Most of the countries were once part of the Soviet Unionb. High in Kazakhstan and Iran(1) Leading producers in petroleum(2) The leader of Iran does not want to develop because he is a Shiite and that is a Western idea.c. Afghanistan has one of the worlds lowest but it has not been calculated because of the war.

6. South Asia: HDI 0.61a. Includes India, Pakistan, Bangladesh, Sri Lanka, Nepal, and Bhutan.b. 2nd highest population and 2nd lowest GDP(1) Population density is high and natural increase rate is high.c. The Green Revolution increased agriculture(1) Created miracle rice and wheat seeds(2) Rely on the monsoon seasons from May to Augustd. India is South Asias largest country(1) 4th largest economy(2) Produces wheat, rice and other products(3) Economy growth is right behind Chinas

7. Sub-Saharan Africa: HDI 0.51a. Lots of minerals(1) Bauzite in Guinea, Cobalt in the Congo, diamons in Botswana, and petroleum in Nigeria.b. Least-favoritable prospects of development(2) Highest % of people living in poverty(3) Economic growth has deteriorated(4) Landlocked states have difficulty shipping tradec. Highest natural increase rate, so the land is overworked

III. Where Does Level of Development Vary by Gender?a. Gender inequality exists in every country.b. Gender-Related Development Index (GDI) Compares the level of of womens development with that of both sexes.c. Gender Empowerment Measure (GEM) Compares the ability of women and men to participate in economic and political decision making.

A. Gender-Related Development Indexa. Just like the HDI Economic indictor of gender differnces: Per capita female income as a % compared to male income Social indicators of gender differences: # of females enrolled in school compared to # of males and % of literate females to males Demographic indicator of gender differences: Life expectancy of females compared to malesb. The GDI penalizes a country for having a large disparity between the well-being of man and women.(1) Hungary and Saudi Arabi have the same GDP, but Hungary has a higher GDI because men and women are more equal there.c. A country with complete equality would be 1.0(1) No country has achieved that.d. A high GDI means that both men and women are close to being equal, but women have a slightly lower level than men. A low GDI means that women have a low level of development and are below men.

B. Gender Empowermenta. The GEM measures the ability for women to participate in achieving the improvements in their status (To be a leader). Economic indicators of empowerment: Per capita female income at a % compared to men and % of professional jobs held by women. Political indicators of empowerment: % of administrative jobs held by women and % of members of the national parliament who are women.b. A country with complete equality of power between men and women would be a 1.0.c. Every country has a lower GEM than GDI.

IV. Why Do LDCs Face Obstacles to Development?a. LDCs have 2 problems:(1) Adopting policies that successfully promote development(2) Finding funds to pay for the development

A. Development Through Self-Sufficiencya. 2 approaches to becoming developed: international trade, or self-sufficiency.b. Self-sufficiency has been the most popular one(1) China and India

1. Elements of Self-Sufficiency Approacha. A country should spread investment as equally as possible across all regions and sectors.(1) System is fair because residents develop along with the countryside and along with cities.(2) Reducing poverty takes place over a few people becoming richerb. Helps local buisnesses.c. 3 Barriors:(1) Setting high taxes (tariffs) on imported goods(2) Fixing quotas to limit the amount of imported goods(3) Requires a license to restrict the number of legal importersi. Restricts local businesses from exporting goodsd. Example in India: To import into India, foreign countries have to get a license which is a longtask because they have to go through many agencies The government then restricts the number of imported goods The government then puts taxes on the goods to double or triple the value Indian buisnesses were discouraged from making products to export because Indian money could not be convertede. If companies could not make money selling inside of India, the government provided cheap electricity or no debt.

2. Problems with the Self-Sufficiency Alternative1. Protection of inefficient businesses.a. Businesses could sell all they made to people however they want.(1) There is not incentive to improve the quality, lower production costs, reduce prices, or increase production(2) There was also no competition.2. Need for a large bureaucracya. The complex administration leads to corruption and abuse(1) Entrepanuerors wanted to advise people how to make a business instead of doing it themselves.(2) People would smuggle in imported goods and sell them at high prices

B. Development Through International Tradea. A country must be distinct and unique.

1. Rostows Development Modela. W.W. Rostow proposed a 5-stage model in the 1950s1. The traditional society.a. Not started the process of developmentb. High % of people in agriculture and in military and religion2. The preconditions for takeoff.a. An elite group initiates economic activitiesb. Under the influence, the population invests in water supplies and transportation3. The takeoff.a. Rapid growth is started in litited economic activities (clothing, food)4. The drive to maturity.a. Modern technology diffuses to other industriesb. Workers become more skilled5. The age of mass consumption.a. The economy shifts from heavy goods like steel, to consumer goods like refrigeratorsb. Each country would be in one of these stages(1) MDCs are in stage 4 or 5; LDCs are in stages 1-3c. A country in international trade benefits from exposured. Based on 2 factors:(1) Why cant all countries be an MDC?(2) LDCs must contain raw materials for the MDCs.

2. Examples of the International Trade Approacha. Early 20th century

The Four Asian Dragons.a. The first countries to adopt this alternative were South Korea, Songapore, Taiwan, and Hong Kong.(1) No natural resourcesb. Influenced by Japan(1) Concentrated on production

Petroleum-Rich Arabian Peninsula States.c. Includes Saudi Arabia, Kuwait, Bahrain, Oman, and the United Arab Emirates.d. Used petroleum revenues to finance large-scale projects like roads and houses.

3. Problems with the International Trade Approacha. 3 Problems1. Uneven resource distribution.a. Arabian peninsula achieved success because of its petroleum.b. Zambia is a leader in copper reserves, but is not making money because the prices for copper has gone down.2. Increased dependence on MDCs.a. Building up takeoff industries will take money away from the production of food and clothing.b. Rather than finance new development, the funds are used to pay the workers.3. Market decline.a. Many products have declined sharply even before the recession.

C. International Trade Approach Triumphsa. In the late 20th century, most countries were using the international trade approach, including India. Foreign companies were allowed to set up factories and sell in India Tariffs and restrictions on imports were reduced or eliminated Monoplies were eliminated With increased competition, there were improvements in their productsb. During the self-sufficient era, Indias auto industry was controlled by Maruti-Udyog Ltd. In the international trade era, India sold it to Japan.c. Countries like India converted because international trade was better

1. World Trade Organizationa. WTO established in 1995.b. It reduces boundaries to internation trade in 2 ways:(1) Countries negotiate international trade restrictions such as quotas and tariffs.(2) Restrictions on the movement of money by banks are eliminated.(3) Settles claims and disputes against countries violationsc. Atacked by protestors saying that they control large amounts of money behind closed doors.

2. Foreign Direct Investmenta. Foreign Direct Investment (FDI) Investments made by foreign countries to help the economy of another country.b. Grew rapidly during the 1990s from $130 billion to $1.5 trillion.(1) The level declined in the middle because of 9/11c. Not flow equally(1) went from MDC to LDC, while went from MDC to another MDC(2) China got 1/3 from LDCs, all the other Asian countries got 1/3, 1/5 to Latin America, and 1/10 to African countriesd. Transnational Corporation Invests and interacts in countries other than the one that its headquarters are in.(1) Of the 500 largest TNCs, 140 have headquarters in the US, and 163 in Europe.

D. Financing Developmenta. LDCs get money from MDCs in 2 ways, loans and investments.

1. Loansa. The 2 major leaders are the World Bank and the International Monetary Fund (IMF). The World Bank:a. Includes the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).(1) The IBRD provides loans to reform public administrations and legal institutions, develop finatial institutions, and implement transportation services.(2) The IDA supports countries that are too risky to qualify for IBRD loans.i. The IBRD loans more money from private investors The IMF:a. Provides loans to countries that are experiencing balance-of-payment problems that affect tradeb. Designed to help stabilize and pay for imports.c. Based on size of the countrys economyb. Both banks were conceived at the 1944 United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire after WWII and to avoid having another Great Depression.c. They build new infrastructures to make it more favorable for businesses.d. The World Bank considers half of its projects to be failers Projects dont function because of faulty engineering Aid is stolen by the country New infrastructure does not attract other investmente. Many LDCs cannot pay back loans

2. Structural Adjustment Programsa. Before granting debt relief, an LDC must make a Policy Framework Paper (PFP)b. Structural Adjustment Program Includes economic goals, strategies, and external financial requirements.(1) Requirements of the plan are: Spend only what it can afford Direct benefits to the poor, not just the elite Direct investments from military to health and education Invest scarce resource where they will have the most impact Encourage a more productive private sector Reform the government and inform the public(2) By reducing government spendings, these programs may: Cuts in health, education, and social services that benefit the poor Higher unemployment Loss of jobs in state enterprise and civil service Less support for those who need it most (poor pregnant woman, children)

E. Fair Tradea. Fair Trade products are made and traded according to standards that protect workers in LDCs.(1) Standards are set by the Fairtrade Labelling Organisations International (FLO).(2) Transfair USA certifies the products sold in the US that are fair tradeb. In North America, fair trade products are normally household items such a jewelry, whereas fairtrade items in Europe are food like coffee and honey.c. Ten Thousand Villages is the largest fairtrade organization in North America.

1. Fair Trade Producer Standardsa. Fair Trade advocates work with small businesses that are unable to borrow money from banks.b. These cooperations help them instead of just trying to make money.c. Consumers pay more for items that are from fair trade.(1) Producers of fair trade items get more money back because they dont need a middleman.

2. Fair Trade Worker Standardsa. Fair trade returns an average of 1/3rd back to the producer in the LDCb. Fair trade requires employees to pay workers fair wages(1) Atleast the countrys minimum wage(2) Workers are sometimes paid for their necessities such as food and education