Development and Globalisation Development A process of social and economic advancement in terms of the quality of human life. Development can involve can involve economic, demographic, social political and cultural changes. Development is a term that can be used in many different contexts whether it is social, economical, political etc. However generally development refers to an improvement in certain areas: • Economic o An increase in the country’s economy with a shift from secondary to tertiary industry which becomes less dependent on FDI.
• Demographic An increase in population and a more ageing population as standard of living increases. Birth rates and death rates drop as life expectancy increases. • Social o An increase in the range of services, increased land prices and a more multicultural society. Greater access to education, health care and communication • Political o More democratic and more influence on the ‘global stage’. Stable government, no dictatorship. • Cultural development o Greater equality for women and better race relations in multicultural societies.
GDP- Gross Domestic Product – the value of all the goods and services produced in a country in a year, in $US, usually expressed as “per capita” (per person). PPP (purchasing power parity)* figures are more useful. *Adjusted for loss of living GNP- The total value of goods and services produced by one country in a year, plus all net income earned from overseas sources, in $US. HDI- Human Development Index: It is a summary composite index that measures a country’s average achievements in three basic aspects of human development: health, knowledge, and a decent standard of living.
Life Expectancy • Literacy Rate • Standard of Living (measured in GDP per capita) It gives a more complete picture of development of a country than GDP alone as it considers social factors and not just economic factors. Development Continuum Originally there were three groupings that made up the development continuum, they were: • First World (those developed countries that had a democratic government and a strong economy) • Second World (communist countries) • Third World (UN developed countries)
However as time has gone on newer economies have started to develop caused by different development patterns and speeds. The Development gap • The gap between rich and poor countries • Most commonly, the gap is thought of in terms of income/economics • It also social, environmental and even political aspects There was a suggested North/South divide originating from the Brandt report in 1980, where the north accounted for 80% of GDP but only 20% of the population; however this too requires some artistic licence and is a very general way of dividing countries.
There are more accurate ways of grouping countries as listed below and as countries move through the development continuum countries pass from one category to another: • Developed (MDC’s – the most well developed countries eg. UK) • Developing (Countries which are undergoing development – arguably they all are. Eg. Malaysia) • LDC’s (Least Developed Countries – eg. Ethiopia) • NIC’s (Newly Industrialised Countries – Have just finished development (10 years or so) Eg. China) • RIC’s (Recently Industrialised Countries – Further behind than the NIC’s eg. Dubai) Centrally Planned Economies (The few remaining communist countries eg. North Korea) • Oil Rich Countries (Countries rich in oil eg. Saudi Arabia) Causes for the Development Gap • Colonialisation – colonial powers took resources from poorer countries • Price of commodities is often controlled by TNCs ensuring high profits for MEDC firms and low prices paid to LEDC producers – Fair trade set up in reaction to this. • LEDCs are now primary producers – producing low cost commodities, e. g. bananas • Primary commodities have fallen in price, or stayed steady, while commodities they need has increased, e. . oil What is preventing the Development gap from closing? • Many LEDCs main industry is as primary producers – generally low profit • Internatnioal trade dominated by TNCs • Rapid The Asian Tigers Who or what are the Asian Tigers? Asian economies that have progressed economically at such substantial rates that have come to rival the earning capacity and quality of living of those being first-world countries – Taiwan, Hong Kong, Singapore and South Korea. Globalisation Globalisation: The increased inter-connection in the world’s economic, cultural and political systems. Positives |Negatives | |Allowed the movement of people more easily |Uncontrolled migration | |Increased foreign trade |Inequality in wealth | |More access to food, services, healthcare etc. ll over the world |Heavy environmental cost | | |Loss of countries individual cultures, global cutters | • Globalisation began in the 19th century as there was the beginning of movement of people and goods; • Increase in independence • Increase in trade as well as the spread of industry • Beginning of Trans National Corporations. Globalisation continued in the 20th century and was shaped by a number of factors including: 1.
Emergence of free markets (capitalist economy) 2. Deregulation of world financial markets 3. The establishment of the General Agreements of Tariffs and Trade (GATT) –the WTO which sought to lower trade barriers. 4. The emergence of trade blocs 5. The establishment of the IMF and the World Bank 6. Development of global marketing and the continuing rise of TNCs. Flows • Capital o ICT allows cheap, reliable and almost instantaneous communication o Allows sharing information o Allows transfer of capital o Allows Marketing around the world • Labour o Improved transport for people Size of air craft o Low cost airlines o High speed rail links o Specialised workers- doctors, ICT etc. o Unskilled workers • Products and services o Integrated networks o Goods handling o Computing logistics o Container revolution o Improved transport for goods o Global marketing, the world as one market and create products that fit various regional market places e. g. coca-cola and McDonalds Patterns of production, distribution and consumption Manufacturing has gone from developed countries to lower wage economies. This is known as the GLOBAL SHIFT, which is brought about by FDI by TNCs.
Many LEDC’S have benefited from the transfer of technology which has meant these countries can raise their productivity without raising their wages to the level of the developed countries. This has lead to the de-industrialisation of richer countries and the focus on tertiary and quaternary industry. There has also been outsourcing of service operations, such as call centres, Mumbai, this extends the influence on a global scale also the employment costs are a lot lower even though there is a highly educated workforce. Positive and negatives of the global shift Positives for MEDCs |Negatives for MEDCs | |Movement of polluting industries away from their country |Could lead to wide spread unemployment | |Growth in LEDC’s may lead to demand for exports from MEDCs |Loss of skills | |Cheaper imports can keep the cost of living down benefiting the retail |Negative multiplier effect | |sector |Large gap between skilled and unskilled workers who may experience | |Labour market flexibility and efficiency |extreme redeployment differences | |Development of new technologies leading to investment |deindustrialisation of some areas, such as the North | |Help to reduce inflation | | |Positives for LEDC’s and NIC’s |Negatives for LEDC’s | |Development of new industries Rapid urbanisation and rural-urban migration | |Increased employment |Westernised approach to economy | |Helps to reduce development gap |Increased environmental damage die to polluting industries | |Increased FDI and investment which can lead to improved services such as |Exploitation of labour | |infrastructure, health care and education |Disruptive social impacts | |Increased exports helps BoPs, and increases income and GDP |Over-dependant on one industry | |New technologies |Destabilises food supplies, less agriculture | | |Health and safety issues because of tax legislation | Patterns of production and processes In manufacturing there has been a global shift of marketing from MDC’s to LDC’s.
Guests are encouraged to participate in low impact activities – o guided nature/bird walks, o cycling, fishing o Day or night game drives are conducted in open-sided 4×4 vehicles • Lodges work closely with the local community and support several enterprises, schools and an orphanage. • Guests can visit a group of widows that craft sisal baskets, a group that makes jewellery from recycled paper and a rug weaving factory. • The lodges only sell what is made by the community and pay a fair price. • A large percentage of the price is donated to the community fund. • Every year, children from the local community and schools are invited to participate in ecotourism workshops • To protect and improve their environment.