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Human Geography: Places and Regions in Global

Context, 5eChapter 7: The Geography of Economic

DevelopmentPaul L. Knox & Sallie A. MarstonPowerPoint Author: Keith M. Bell

OverviewEconomic development is a global concern affecting every region on Earth. The key aspect of economic development worldwide is its unevenness. Some countries are highly developed—in the sense of having greater economic prosperity, low unemployment, a high level of health and well-being, and so on—while others languish. What causes these differences, and why do some regions experience difficulties in becoming more developed? These are the basic questions asked by development scholars.This chapter begins by discussing what economic development means. Western economists and development scholars usually define development as a high level of economic prosperity, a high level of advanced technology in use, and a high level of productivity, along with high levels of health and well-being. Different explanations have been proposed as to how countries and regions are able to obtain these goals. After explaining the basic principles of economic location—why economic activities take place where they do—this chapter elaborates on each region’s participation in the world-system or global economy.

Chapter Objectives• The objectives of this chapter are to:• Examine the unevenness of economic development in

various parts of the world• Investigate the economic structure of countries and

regions, and explore the various stages of economic development

• Survey principles of commercial and industrial location and how they affect economic interdependence

• Examine core-periphery patterns and how they are created

• Explore the pleasure periphery

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Chapter Outline• Patterns of Economic Development (p. 250)

– Economic development is uneven– The role of resources in development– Economic structure and the division of labor– International trade, aid, and debt– Development theories and models

• Pathways to Development (p. 271)– How regional economic cores are created– How core-periphery patterns are modified

• Globalization and Economic Development (p. 276)– Foreign direct investment– Transnational corporations– Offshore financial centers– Tourism and economic development

• Conclusion (p. 293)

Geography Matters• 7.1 Window on the World—China’s Economic

Development (p. 262)– The rise of China as an economic power

• 7.2 Geography Matters—Fair Trade (p. 268)– The Fair Trade movement, which aims to build more equitable

relationships between producers and consumers and to alleviate poverty

• 7.3 Geography Matters—Changing Geography of the Clothing Industry (p. 280)– The global nature of the garment industry

• 7.4 Geography Matters—Wal-Mart’s Economic Landscape (p. 286)– The growth of the retail giant Wal-Mart and its local and global

impact

The Geography of Economic Development

Geographically, the single most important feature of economic development is that it is

highly uneven.

Geographical divisions of labor have evolved with the growth of the world-system of trade

and politics.

Regional cores of economic development are created cumulatively through the operation of

several basic principles of spatial organization.

Spirals of economic development can be arrested in various ways which follow major

shifts in technology systems and international geopolitics.

The globalization of the economy has meant that patterns and processes of local and

regional economic development are much more open to external influences than before.

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Patterns of Economic Development

• The term economic development refers to processes of change involving the nature and composition of the economy of a particular region, as well as to increases in the overall prosperity of a region.

• These processes can involve three types of changes:– Structure of the region’s economy– Forms of economic organization within the region– Availability and use of technology within the region

Gross National Income (GNI) per capita

Most of the highest levels of economic development are to be found in northern latitudes, which has given rise to a division between “North” (the core) and “South” (the periphery).

Persistent Poverty—Child LaborHaiti: handed into servitude India: making fireworks

Globally, an estimated 114 million children of primary school age are not enrolled in school, depriving one in five children of an education. They become exposed to exploitation and abuse, trapped in a cycle of poverty.

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Long-term Trends in Per Capita GNI

• This graphs shows the steady divergence in international economic prosperity between the richest and poorest of the world’s population.– 1960: the richest 20

percent of the world’s population accounted for over 70 percent of global income, a ratio of 30 to 1

– 1980: the ratio had increased to 45 to 1

– 2000: the ratio was 72 to 1

UNDP Human Development Index

• The UNDP HDI is based on measures of life expectancy, educational attainment, and personal income.

• A perfect score is 1.0, and most of the affluent core countries have index scores of 0.9 or more.

• The worst scores—those less than 0.4—are concentrated in Africa.

An Index of Human Development, 2005

Purchasing power parity (PPP) is the best way to compare economies across the globe because it calculates what the local currency can purchase, a “market basket” of goods.

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Human Development in the United States

Comparing congressional districts across the United States shows that even within countries that have a high level of income per capita, there are wide variations from place to place.

Agriculture—Women in Development

• Much more than half of Earth’s land surface is unsuitable for any productive form of arable farming.

• Cultivable land isn’t the same quality and it may be quite easy to exceed the carrying capacity of these marginal lands.

• In peripheral countries, women constitute the majority of workers in the formal sector.

• In these countries, women earn 40–50 percent less than men for the same work, but it is women who hold societies and families together.

Resources and Development• Most of the world’s core

economies are reasonably well off in terms of energy production, with the exception being Japan and parts of Europe.

• It is generally agreed that peak oil discovery was passed in the 1960s.

• Few peripheral countries can afford to consume energy on the scale of the developed economies, so patterns of commercial energy consumption tend to mirror the fundamental core–periphery cleavage of the world economy.

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EconomicStructure

• Primary activities are those concerned directly with natural resources of any kind.– Agriculture, mining, fishing, etc.

• Secondary activities are those that process, transform, fabricate, or assemble the raw materials from the primary sector.– Steelmaking, food processing,

textiles• Tertiary activities involve the

sale and exchange of personal services.– Warehousing, retail stores,

accounting• Quaternary activities deal with

the handling and processing of knowledge and information.– Education, research and

development, data processing

Emerging Growth Zones

The growth of manufacturing in Pacific Asia has generated agglomerations of economic activity at a scale that sometimes crosses national boundaries, as with the Southern China–Hong Kong–Taiwan triangle and the Singapore–Batam–Johor triangle.

China’s Economic DevelopmentNew affluence Real estate boom

Deng Xiaoping established a program of “Four Modernizations” (industry, agriculture, science, and defense) and an “open-door policy” that allowed China to be plugged in to the intermediate circuits of the global economy.

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International Trade, Aid, and Debt• The fundamental structure of

international trade is based on a few trading blocs—groups of countries with formalized systems of trading agreements—with most of the world’s trade taking place within four trading blocs:– Western Europe, together with

some former European colonies in Africa, South Asia, the Caribbean, and Australiasia

– North America, together with some Latin American states

– The countries of the former Soviet world-empire

– Japan, together with other East Asian states and the oil-exporting states of Saudi Arabia and Bahrain

Patterns of Aid & Fair Trade

For many countries, the only alternative to crippling debt, short of opting for self-sufficiency or opting out of the capitalist world economy altogether, is to raise the capital as loans.

Fair Trade• The Fair Trade movement is a

global network focused on building equitable trading relationships between consumers and the world’s most economically disadvantaged artisans and farmers. The key principles include:– Creating opportunities for

economically disadvantaged producers

– Capacity building– Ensuring that women’s work

is properly valued and rewarded

– Ensuring a safe and healthy working environment for producers

– Payment of a fair price for goods that is socially just and environmentally sound

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Stages for Economic

Development

Rostow’s model, now regarded as overly simplistic, perpetuates the myth of “developmentalism,” the idea that every country and region will eventually make economic progress toward “high mass consumption” provided that they compete to the best of their ability within the world economy.

Pathways to Regional Development

• Geographers are interested in geographical path dependence, the relationship between present-day activities in a place and the past experiences of that place.

• Initial advantage highlights the importance of an early start in economic development.

• New phases of economic development will take hold first in settings that offer external economies.

• The initial advantages will be consolidated by localization economies, those being clustered industries.

Regional Economic Decline

This derelict steel mill in New Jersey is testament to the downward economic spiral in what was once one of the world’s most important heavy manufacturing regions.

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The Global Assembly Line

Transnational corporations are companies that participate no only in international trade but also in production, manufacturing, and/or sales operations in several countries.

Flexible Production Systems

In neo-Fordism the logic of mass production coupled with mass consumption has been modified by the addition of more flexible production, distribution, and marketing systems.

Principal Maquiladora Centers

< Hyundai factory, Tijuana, Mexico

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Wal-Mart’s Economic Landscape

• Wal-Mart’s emphasis was on a business model that rests on high-volume turnover through low prices.

• The company’s rapid expansion and tremendous profitability “allowed it to become a market power unequalled by any of its large competitors.”

• “Far from being simply a store, Wal-Mart is also a moral universe external to the community.”

• Its greatest global impact is through its supply chain, and 50–60 percent of imports come from China.

Electronic Offices, Decentralization, and Outsourcing

Samsung: Cikarang, Indonesia

ITC Limited: Bangalore, India

Global outsourcing expenditures are expected to grow significantly as large transnational companies take advantage of low wages in non-core countries.

Ecotourism

Alternative tourism emphasizes self-determination, authenticity, social harmony, preservation of the existing environment, small-scale development, and greater use of local techniques, materials, and architectural styles.

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End of Chapter 7

Discussion Topics and Lecture Themes

• Consider your own state or region. Is the level of economic development even or uneven throughout the state or region? What are some examples of the unevenness of economic development? Why does this unevenness exist?

– Data on regional development can be obtained from state or local agencies. Some states may even have regional planning or development authorities charged with improving economic conditions in underdeveloped parts of the state. Core-periphery theories may also be useful at the regional level for explaining uneven regional development.

Discussion Topics and Lecture Themes

• Uneven economic development is a characteristic of the world-system. Consider two countries, for example, Switzerland and Bolivia. Both are landlocked countries with no access to the sea. Switzerland has few natural resources, while Bolivia has many. Yet Switzerland is a prosperous, developed, core country, while Bolivia is economically weak, underdeveloped, and part of the periphery. Why do these differences exist?

– World-systems theory argues that it is the relationship between statesthat helps establish their place in the core-semiperiphery-periphery hierarchy. Much of the difference derives from the effectiveness of a state in insuring the international competitiveness of its products. Switzerland, for example, produces high-value goods—such as watches—and important services—such as banking—while Bolivia relies on low-value exports that are not processed locally—such things as tin ore and fruit.

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• The status of women in a society is closely linked with the level of economic development in that society: the higher the level of economic development, the higher the status of women, and vice versa. What might be responsible for this connection? Discuss some efforts of women in less-developed societies to improve their position. What can women do to improve their position in less-developed societies?

– Reasons for the lower status of women include discrimination anddenial of access to resources and wage-employment. Increased development allows more women to enter the labor force by providing employment opportunities, increased access to affordable child care, and increased political recognition of women’s rights. There are numerous websites devoted to women and development—one of the most interesting is the Women in Development Network (WIDNET) athttp://www.focusintl.com/widnet.htm.

Discussion Topics and Lecture Themes

• Discuss the “Stages of Growth” model of economic development as developed by Walt Rostow in his book The Stages of Economic Growth: A Non-Communist Manifesto. Has this model successfully explained changes in economic development? What policies might be based on this model? Given the discussion of Postmodernity in Chapter 6 of the textbook, might there be a sixth stage in this model?

– Rostow’s “modernization” model has been much debated and critiqued and there is plenty of available academic literature about it. The “dependency” school of development emerged largely as a response to Rostow’s model. See page 270 in the textbook for a brief elaboration of the model. A sixth, Postmodern, stage might be distinguished by mass consumption of images (e.g., entertainment, tourism, and fashion) rather than material goods.

Discussion Topics and Lecture Themes

• What are the principal economic activities in the local area? Are they mainly primary, secondary, tertiary, or quaternary, or some combination of the above? Why did these activities develop in this particular area?

– Data on local economic activity can often be obtained from the local Chamber of Commerce and from municipal and county agencies.

Discussion Topics and Lecture Themes

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• What is meant by the term “global assembly line”? Is the local community linked to this assembly line? If so, how? How does this linkage affect the future of economic development in the local area?

– “Global assembly line” refers to a network of labor and production processes that produce a finished global product for a global market. Different components or stages of production are manufactured or outsourced in several different countries, taking advantage of labor costs and other kinds of savings. The local Chamber of Commerce, business council, or public relations office of locally-based industry may be able to provide information about the global activities of local businesses. The Geography Matters 7.3 boxed text on pages 280–281 also illustrates a global assembly line.

Discussion Topics and Lecture Themes

• What are some of the positive and negative features of tourism as an economic development strategy? Is there evidence of both positive and negative impacts on the local community?

– Tourism can provide jobs and inject new money into a local economy, and it is a relatively “clean” or non-polluting industry. On the other hand, tourism can lead to dependency, many tourism jobs are low paid, and tourists can disrupt the social and cultural values of communities. There is a large literature on tourism impacts and, in addition to books, many articles can be found in such journals as the Annals of Tourism Research and Tourism Management.

Discussion Topics and Lecture Themes

• Sustainable development is a popular though controversial issue. How can sustainable development be defined and applied in a practical sense?

– There is a vast literature on sustainable development but hardly any clear definitions. The following readings might provide a starting point: D. Pearce, E. Barbier, and A. Markandya, Sustainable Development: Economics and Environment in the Third World (Aldershot, England: Edward Elgar, 1990); Michael Redclift, Sustainable Development: Exploring the Contradictions (London: Routledge, 1987); Thomas Wilbanks, “Sustainable Development in Geographic Perspective,” Annals of the Association of American Geographers 84, pp. 541–556, 1994; and World Commission on Environment and Development, Our Common Future(Oxford: Oxford University Press, 1987).

Discussion Topics and Lecture Themes

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• To which countries does the United States donate aid, and why?

– See the United States Agency for International Development (USAID) website at http://www.usaid.gov for further information. Much foreign aid is tied to political issues.

Discussion Topics and Lecture Themes