Everyone has the right to a standard of living adequate for the health and wellbeing of himherself and hisher family including food clothing housing and medical care and necessary social services Everyone has the right to education ID: 386778
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Universal Declaration of Human Rights
Everyone
has the right to a standard of living adequate for the health and well-being of him/(her)self and his/(her) family, including food, clothing, housing and medical care and necessary social services... Everyone has the right to education.
Slide2
Why study the Third World?Interdependence and globalizationIt is
most
of the world
population
area
It has
most of the natural resources
raw materials and energy resources
Organization of Petroleum Exporting CountriesSlide3
The Developing WorldThe macroeconomic problems of the world’sdeveloping countries affect the stability of the entire international economy
.
There
has been greater economic dependency
between developing
and industrial countries since WWII.Slide4
Growth versus DevelopmentEconomic growth:A measure of the value of output of goods and services within a time period
Economic Development:
A measure of the welfare of humans in a societySlide5
DevelopmentDevelopment is not purely an economic phenomenon but rather a multi-dimensional process involving reorganization and reorientation of entire economic AND social systemDevelopment is process of improving the quality of all human lives with three equally important aspects. These are:Slide6
Objectives of DevelopmentRaising peoples’ living levels, i.e. incomes and consumption, levels of food, medical services, education through relevant growth processes
Creating conditions conducive to the growth of peoples’
self-esteem
through the establishment of social, political and economic systems and institutions which promote human dignity and respect
Increasing peoples’ freedom to choose by enlarging the range of their choice variables, e.g. varieties of goods and servicesSlide7
Characteristics of Developing NationsGNP/capital less than $9,075Unequal distribution of incomeTechnological dualismRegional dualism
Majority of population working in agricultural sector
Disguised unemployment or underemployment
High population growth
High rate of illiteracy and insufficient educational facilities
Widespread malnutrition and health problems
Political instability
High dependence on a few products
Inhospitable topography
Low savings rates and inadequate banking facilitiesSlide8
Diversity of Developing EconomiesHistorical backgroundPhysical and human resourcesEthnic and religious compositionBalance of public and private sectorsExternal dependencePolitical structure, power, & interest groups
Industrial structureSlide9
Levels of Economic DevelopmentDeveloped
Classification for all industrialized nations, which are mostly technologically developed.
Developing
Classification for world’s lower income nations, which are less technically developed.
Newly
Industrialzing
Countries (NICs)
Fast-growing, middle-income or higher economies
Heavy concentration of foreign investment
Exported large quantities of manufactured goods, including high-tech productsSlide10
Levels of Economic DevelopmentEmerging Market EconomiesChile, Malaysia, China, Thailand, Indonesia
Transition
Countries or Eastern Europe
Former communist countriesSlide11
Levels of Economic DevelopmentNewly Industrialized Economies (NIEs)Primarily used to refer to the four tigersTaiwan, Hong Kong, Singapore, South Korea
IMF
combines NIEs with Industrialized Nations to form
“advanced
economies”Slide12
Classifications of Developing CountriesThe UN’s SystemWorld Bank’s SystemThe UNDP’s Human Development IndexSlide13
The World Bank Classification SystemBased on GNP/per capita/p.a.
Low income ($735 or less)
Lower middle income ($736 - $2935)
Upper middle income ($2,936 - $9,075)
High income ($9,076 or more)Slide14
GNP/Per Capita/p.a. as an IndicatorConcerns
GNP/Capital data does not include Underground Economy
Undeclared legal production
Production of illegal goods and services
Concealed income – barter
Underground Economy larger if
Higher level of taxation
Oppressive government red tape
Currency conversion
Local currency converted to the dollar by using exchange rate
Conversions do not reflect domestic purchasing powers of currencies, must use purchasing power parity (PPP)
World Bank uses Atlas methodologySlide15
Human Needs Approach to Economic DevelopmentDefines economic development as the reduction of poverty, unemployment, and inequality in the distribution of income.Less illiteracy, less malnutrition, less disease and early death, shift from agricultural to industrial production
Human
Development Index (HDI) based on
A long and healthy life
Ability to acquire knowledge
Access to resources for a decent standard of living
Measured by life expectancy, adult literacy, and GDP/capita adjusted for PPPSlide16
4.4 billion people live in developing countries
Of these …
Three-fifths lack basic sanitation
Almost one third have no access to clean water
A quarter do not have adequate housing
A fifth have no access to modern health services Slide17
Comparisons In 1997 the richest fifth of the world’s population had 74 times the income of the poorest fifth.
The top three billionaires have assets greater than the combined GNP of all least developed countries and their 600 million people.
Slide18
PovertyPoverty is the lack of basic necessities that all human beings must have: food and water, shelter, education, medical care, security, etc. A multi-dimensional issue, poverty exceeds all social, economic, and political boundaries. As such, efforts to alleviate poverty must be informed of a variety of different factors.Slide19
Percentage of people living below the poverty lineEurope and Central Asia 3.5%
Latin America and Caribbean 23.5%
Sub-Saharan Africa 38.5%
Middle East and North Africa 4.1%
South Asia 43.1% Slide20
Causes of third world poverty
Trade
Third world countries lose out through unfair trade agreements, lack of technology and investment, and rapidly changing prices for their goods.Slide21
Causes of third world poverty Work and globalisation
Better communications and transport have led to a “globalised” economy. Companies look for low-cost countries to invest in. This can mean that, though there are jobs, they are low-paid.
Slide22
Causes of third world poverty
War
or conflict
When a country is at war (including civil war) basic services like education are disrupted. People leave their homes as refugees. Crops are destroyed. Slide23
Causes of third world poverty Debt
Third world countries have to pay interest on their debts. This means they cannot afford to spend enough on basic services like health and education; nor on things like transport or communications that might attract investment. Slide24
Causes of third world poverty
Land
If you have land you can grow your own food. But many people in the Third World have had their land taken over by large businesses, often to grow crops for export. Slide25
Causes of third world poverty Health
Affordable or free health care is necessary for development. In poor countries the percentage of children who die under the age of five is much higher than in rich countries. HIV/AIDS is having a devastating effect on the Third World.
Slide26
Causes of third world poverty
Food and education
Affordable, secure food supplies are vital. Malnutrition causes severe health problems, and can also affect education. Without education it is difficult to escape from poverty. This becomes a vicious circle – people who live in poverty cannot afford to send their children to school. Slide27
Causes of third world poverty
Gender
When we measure poverty we find differences between the level experienced by men or boys, and women or girls. Women may be disadvantaged through lack of access to education; in some countries they are not allowed to own or inherit land; they are less well paid than men. Slide28
Causes of third world poverty
Environment
A child born in an industrialised country will add more to pollution over his or her lifetime than 30-50 children born in the Third World. However, the third world child is likely to experience the consequences of pollution in a much more devastating way. For example, annual carbon dioxide emissions have quadrupled in the last 50 years. This contributes to global warming, leading to devastating changes in weather patterns. Bangladesh could lose up to 17% of its land area as water levels rise. Slide29
Theories of Development1940-50s- Keynesian growth theory -process of capital of formation is determined by savings and investment
Domestic savings are channeled to productive investments such as manufacturing which result –usually-in high productivity
Growth is market driven as income levels rise, savings rises and frees capital for alternative investmentSlide30
Theories of DevelopmentModernization Theory -as noted previously this theory suggests that economic dimension alone is insufficient and adds theories on institutional and social change
Incorporates non-economic elements such as social practices, beliefs, values and customs (McClelland,
Achieving Society
)
Diffusion and speed of change is critical as is removal of various cultural and social barriers
Backward internal structures-rather than external factors-cause underdevelopmentSlide31
Theories of DevelopmentNeoLiberal Development Theory-
grew in the 1970s and designed to counteract impact of Keynesianism
New emphasis on supply side factors in development- private initiatives and market led growth
Move away from demand stimulation (interest rate manipulation), import substitution, state intervention and centralized planning
Gradual industrialization with ‘trickle down’ of benefits to all social classesSlide32
Sustainable DevelopmentDefined as development that is likely to achieve lasting satisfaction of human needs and improvement of the quality of life and encompasses:
Help for the very poorest who are left with no option but to destroy their environment to survive
Idea of self-reliant development with natural resource constraintsSlide33
Sustainable DevelopmentCost effective development using different economic criteria to the traditional –i.e. development should not degrade environment
Important issues of health control, appropriate technologies, food self-reliance, clean water and shelter for all
People centered activities are necessary- human beings are the resources in the concept