Development

Chapter 10

Economic Geography

• The study of the flow of goods and services through space, as well as

how people provide for themselves in different places.

How do you Define and Measure Development?

Key Question:

What does Development Mean?

• Development implies “progress”

– Progress in what?– Do all cultures view development the

same way?– Do all cultures “value” the same kinds of

development?

Development

• Implies Progress. • Early ideas of progress are Industrial

Revolution

Classification

• Underdeveloped, Developed, and Developing Nations:– To say a country is underdeveloped

would be politically incorrect, in light of the fact that the word underdeveloped had a negative connotations geographers developed a new way to groups nations in the core-periphery model.

• This model characterized nations into either: core, semi-periphery, and periphery nations.

Classification

• Characteristics of a Core Nation: – Have achieved high

levels of socioeconomic prosperity and high standards of living

– Contain world cities such as London, Tokyo, and New York which serve as global centers of economic activity.

– These nations include the U.S., Germany, Great Britain.

• Characteristics of a Semi-Periphery Nation:– Newly industrialized

countries with diverse economic opportunities but have extreme gaps between rich and poor.

– These nations are usual in a transition stage to becoming a core nation.

– Examples: Chile, brazil, India, China, and Indonesia

Classification

• Characteristics of a Periphery Nations: – Usually poor regions

that are very dependent upon core nations.

– Low levels of economic productivity and lack infrastructure and have rapidly growing populations.

– These place have benefited little from globalization.

• Keep in mind that the core-periphery model focus on the economic relationships among places.

• The “slow world” of the periphery is often compared to the “fast world” of the core because of the lack of technology and communication in periphery nations.

Advantages of Production in Periphery Nations

1) Cheap Labor2) Loose Labor Laws3) Loose Environmental

Regulations4) Low Taxes5) The distribution of

natural resources by locating different aspects of production in different countries.

– Note: Most MNC’s are conglomerate corporations: composed of many smaller firms that serve different functions. (i.e. distance to natural resources)

Classification

• Underdeveloped, Developed, and Developing Nations:– To say a country is underdeveloped

would be politically incorrect, in light of the fact that the word underdeveloped had a negative connotations geographers developed a new way to groups nations in the core-periphery model.

• This model characterized nations into either: core, semi-periphery, and periphery nations.

Issues with Measuring Economic Development

• All measurements count the:– Formal Economy – the legal economy

that governments tax and monitor.

• All measurements do not count the:– Informal Economy – the illegal or

uncounted economy that governments do not tax or keep track of.

Measuring DevelopmentGross National Product (GNP)

Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year. Includes things produced inside and outside a country’s territory.

Gross Domestic Product (GDP)

Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year.

WITHIN A COUNTRY

Gross National Income (GNI)

Measure of the monetary worth of what is produced within a country plus income received from investments outside the country.

** Most common measurement used today.

Shortcomings of GNP/GDP

• Fails to show distribution of wealth.

Wallerstein’s three tier structure

Capitalist theory of Peter Taylor’s? EXPLOITATION

Other Ways of Measuring Development

• Occupational Structure of the Labor Force• Productivity per Worker• Transportation and Communications

Facilities per Person• Dependency Ratio (#young + elderly per 100

workers

• Shortcomings of each?

Differences in Communications Connectivity

Around the World

Technology

Dependency Ratio by Country, 2005A measure of the number of people under the age of 15 and over the age of 65 that depends on each working-age adult.

Development Models

Modernization ModelWalt Rostow’s model assumes all countries follow a similar

path to development or modernization, advancing through five stages of development, climbing a ladder of development.

- Traditional- Subsistence farming- Preconditions of takeoff - Progressive leadership “open-minded”- Takeoff – Sustained growth similar to Ind. Rev.- Drive to maturity – Ind. spec. occurs, Int’l trade.- High mass consumption – high incomes, widespread prod., service sector.

Models of Development~Liberal Model ~

Assume that all countries are at the same stage

All countries are capable of development

Optimistic viewpoint

~Structural Model~ general term for

models of economic development

A result of historically derived power relations within the global economic system

Only certain countries can become developed

The structure is already in place (maquiladoras)

Structuralist Theory

-Economic disparities are built into the system. -Economic hierarchy is planned.

– Makes it hard for countries to move up ladder.

World-System Theory

• When political and economic relations strengthened the areas connected (core nations) begin to thrive but the nation not connected (periphery nations) did not get these new technological advancements and innovations. This was Wallerstein’s theory as to why there are core, periphery, and semi-periphery nations.

• Recognizes difference in the world.

Struggling Countries

• Argentina suffered due to devalued dollar in Brazil

• Drought, corrupt gov’t, religios strife, and drop in oil cause economic struggles in Malawi and Zimbabwe

• Natural disasters (Sri Lanka)

Dependency Theory

• The structuralist believe that development does not happen everywhere due to dependence on a core nation for money

• EX: Dollarization -El Salvador

-- Economic structures make poorer countries dependent on wealthier countries.

-- Little hope for economic prosperity in poorer countries.

Dollarization – Abandoning the local currency of a country and adopting the dollar as the local currency.

El Salvador went through dollarization in 2001

Impact of Industrialization/Development

• Neocolonialism: Major world powers control economies of poor countries even though independent.

• Tourism usually places a negative affect on periphery nations because even though it may support an economy it may take away from the local culture. It also takes away from the local entrepreneurs.

– Tourism may promote awareness about a particular culture but can take a harsh turn on the cultural landscape.

Financial Organizations

• International Monetary Fund: goal to stabilize exchange rates and supervise the reconstruction of the world's international payment system. Countries could take out small loans to help.

• World Bank: Goal is to combat poverty in peripheral countries. Head is US citizen in DC.

Commodity Chain

How processes operated at each step in the commodity chain that produced the dolomite stone for this fireplace?

Series of links connecting the many places of production and distribution and resulting in a commodity that is then exchanged on the world market.

Three Tier StructureCore Processes that incorporate higher

levels of education, higher salaries, and more technology

* Generate more wealth in the world economy

Semi-periphery Places where core and

periphery processes are both occurring. Places that are exploited by the core but then exploit the periphery.

* Serves as a buffer between core and periphery

Periphery Processes that incorporate lower

levels of education, lower salaries, and less technology

* Generate less wealth in the world economy

Compare and contrast Rostow’s ladder of development with Wallerstein’s three-tier structure of the world economy.

What are the Barriers to and the Costs of

Economic Development?

Key Question:

Preventions of Econ. Development

• Desertification (Africa 2/3 arid/semi-arid)

• Quotas has lead to shifting of production from country to country in the periph. and semi-periph.

• Post-colonial capitals move inland. (Forward Capital)

• Competition of foreign developers (European oil in Gabon)

NGO’s

• Non-Governmental Organizations-Attempt to improve plight of the

people-Guise is to make money.-”Parallel States”-have many NGO’s

working at any given time and are accountable to no one. (Bangladesh 20,000)

Micro Credit Programs

• Offer small loans at high interest rates• Encourage development in poor

regions• Give women fiscal power• Alter social fabric (men’s social status,

alleviate malnourishment)• Places with high mortality rates (AIDS)

are not so successful b/c daily survival more important than development (default on loan)

Barriers to Economic Development

• Low Levels of Social Welfare– Trafficking

• Foreign Debt– Structural adjustment loans

• Political Instability• Widespread Disease

– Malaria

Foreign Debt Obligations Total interest payments compared to the export of goods and services.

Foreign Debt and Economic Collapse in Buenos Aires, Argentina, 2001

Foreign Debt Obligations

Widespread Disease

• Malaria kills 150,000 children in the global periphery each month.

Tamolo, India

This baby sleeps under a mosquito net distributed to villagers by UNICEF workers.

Global Distribution of Malaria Transmission Risk

Costs of Economic Development

• Industrialization– Export Processing Zones (EPZs),

maquiladoras, and special economic zones (SEZs).

• Agriculture– desertification

• Tourism

Export Processing Zones

Areas Threatened by Desertification

Think of a trip you have made to a poorer area of the country or a poorer region of the world. Describe how your experience in the place as a tourist was fundamentally different from the everyday lives of the people who live in the place.

Why do Countries experience Uneven

Development within the State?

Key Question:

How Government Policies Affect Development

• Governments – get involved in world markets– price commodities– affect whether core processes produce wealth– shape laws to affect production– enter international organizations that affect

trade– focus foreign investment in certain places– support large-scale projects

Governments and Corporations can create Islands of DevelopmentPlaces within a region or country where foreign investment, jobs, and infrastructure are concentrated.

Government-created Island of Development

Malaysian government built a new, ultramodern capital at Putrjaya to symbolize the country’s rapid economic growth.

Corporate-created Island of Development

The global oil industry has created the entire city of Port Gentile, Gabon to extract Gabon’s oil resources.

Nongovernmental Organizations (NGOs)entities that operate independent of state and local governments, typically, NGOs are non-profit organizations. Each NGO has its own focus/set of goals.

Microcredit program:

loans given to poor people, particularly women, to encourage development of small businesses.

How do actors in nongovernmental organizations (NGOs) mobilize political change?

An Indonesian woman (on left) who migrated to Saudi Arabia as a guest worker talks with an Indonesian activist (on right) who works to defend migrant workers’ rights.

Take an item of clothing out of your closet, and using the Internet, try to trace the commodity chain of production. What steps did the item go through before reaching you? Consider whether core or peripheral processes were operating at each step and consider the roles governments and international political regimes played along each step.

Industry and Services

• Production of a finished product no longer needs to be in the same region of sale.Shoe factory Ex: Nike today, vs. Boston 1925

Industrial Revolution

• Spurs ideas of mass industrial growth, production, and consumption.

• Hand looms originally used for textiles• Colonial expansion possible b/c of

commercial companies (British East India Company)

• First power source were Foot pedals and H20

Industrial Revolution Cont.

• Smelting, or burning coal in a hot vaccum created coke (purer form of carbon).

• Railroad in England (1825) aids production

• England held monopoly over products made and skills to maintain infrast.

• Why Britain? Proximity to coal fields, iron ore, coastal ports.

Industry in N.A. Began in colonial

Era.Facilitated ports

For shipments of

Iron ore.

New York acts asA “break of bulk”Point to transfer

Cargo from and toOther containers

For shipment

Montreal’s use of

HydroelectricityMakes energy

Cheaper.

S. Ontartio linksTwo parts of

U.S. Manufact.Belt, Buffalo And Detroit.

Britain Industry Factoids

• Many emerge b/c of raw materials (exception is London)

• Industrial cities move b/c of railroads (London & Paris)

Rhur industrial area

is connected to its port by the Rhine River

(Europe's greatestIndust. Complex)

Industrial strip along France,Germany, and Poland due to

Location of coalfields

Saxony moved to Light industry

(fiber optics)/usedIn auto industry

50% of goodsThrough EuropeCome through2 ports in theNetherlands

St. PetersburgRussia’s oldest

Manufacturing center

After WWI, Ukraine Produced 90% of coal

Needed for S.U. to industrialize

Industrialized country that Does NOT lie near manySources of raw materials.1/25th the land of the U.S. and

Has the worlds 2nd largesteconomyKanto region is countries

Most industrious (region is mostDeveloped and urbanized)