Countries according to the Human Development Index (2010)
Poverty & Development
Today
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Developing countries & development
The debt crisis
Current issues
Developing countries
& development
Recognizing developing
countries: geography
Timeline
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1500s-1945: colonization
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1945-1970s: decolonization
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The Cold War context
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New countries as a “problem”
The choice of words
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Developing countries
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Third World countries
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Less developed countries
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The South
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The global South
Recognizing developing
countries: $ per day
1. Geography
2. GDP per capita (PPP*):
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$1/day or $365/year
$2/day or $730/year
See the World Resources
Institute search engine for
basic poverty figures
Proportion of population below $1/day (2008)
see data for the whole world
* PPP: purchasing power parity takes into account the fact
that the cost of the same products varies by country.
Recognizing developing
countries: economic sector size
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Size of economic sectors
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in total GDP
in total employment
“Development”: standard
definition vs. human development
Peasants Dancing, 1651
Johannes Lingelbach (Dutch, 1622–1674). Oil on
canvas; 26 1/2 x 29 1/2 in. (67.3 x 74.9 cm)
Standard definition
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the Cold War & the
invention of “development”
copying the US/European
model
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industrialization of
agriculture
from agriculture to industry
to mass consumption
measured by GDP growth
Human development
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GDP growth not enough
harder to measure
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nutrition
health
physical security
leisure
participation in community
creative life
Defining human development
“The basic purpose of development is to enlarge people’s choices. In principle,
these choices can be infinite and can change over time. People often value
achievements that do not show up at all, or not immediately, in income or growth
figures: greater access to knowledge, better nutrition and health services, more
secure livelihoods, security against crime and physical violence, satisfying leisure
hours, political and cultural freedoms and sense of participation in community
activities. The objective of development is to create an enabling environment for
people to enjoy long, healthy and creative lives.”
Mahbub ul-Haq, quoted in United Nations Development Program. (2008). “The Human
Development concept”. Retrieved 9 February 2010, from
http://hdr.undp.org/en/humandev/.
2011 Human Development Report
Measured by the Human
Development Index (HDI).
See how it’s calculated.
The debt crisis
Origins of
the debt crisis

OPEC* and oil prices

“Petrodollars” in Western banks
•Algeria
•Angola
•Ecuador
•Iran*
•Iraq*
•Kuwait*
•Libya
•Nigeria
•Qatar
•Saudi Arabia*
•United Arab
Emirates
•Venezuela*
* Founding members
Former: Gabon & Indonesia

Developing countries’ need for capital
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Loans from Western banks
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Interest rates rise
* Organization of Petroleum Exporting Countries
The International Monetary Fund (IMF)
& Structural Adjustment Programs (SAPs)
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Lender of last resort
Allowing debtor governments to
pay back debts
Conditionality
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conditions for IMF & World Bank
loans
“economic reforms”, “austerity
measures”, “Washington consensus”
Washington consensus
• Privatization of stateowned enterprises
• Reductions in gov.
spending (health, education
& social)
• Elimination of subsidies
(cooking oil, staple foods,
fuel)
• Deregulation of labour
markets (less protection)
• Adoption of free trade
• Allow foreign investors to
buy domestic companies
Debtors: those who have debts
Creditors: those to whom money is owed
Therefore debtors are supposed to reimburse creditors
SAPs’ objectives & results
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Impose good economic
policies to
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restore government budget
& guarantee loan repayment
restore credit rating

“good investment climate”
“conditions for economic
growth”
and “give investors
confidence”
What they did
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and create
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reduction in wealth
redistribution
increase in cost of living
increase in poverty, child
mortality, maternal
mortality
political instability
NB: since the late ’90s
restoration of social,
health & education
spending
Where did
investments go?
Same 12 developing countries 2005 to April 2011
43.3%
Source: International Labour Organization. (2004). A Fair Globalization: Creating Opportunities for All.
Geneva: ILO. pp. 28-29. http://www.ilo.org/public/english/wcsdg/docs/report.pdf
Benefits
Problems
 Developing countries do get investments from
 12 countries, 75% of investments
multinational/transnational corporations
 South-South competition
 Jobs are created
 Dubious labour practices
 Taxable income for developing countries’ governments  There are more workers than are needed(!)
 Ability to pay back loans
56.7%
Current issues
More issues will be raised in the documentary
Debt cancellation
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Jubilee 2000 (UK, US & Vatican campaigns)
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Impossibility of repayment generally acknowledged, but…
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the “odious debt”
human consequences
impossibility of repaying the debt
which LDCs should benefit?
“moral hazard”
G8 summit of Gleneagles, July 2005
debt cancellation for 36 poorest countries
Some strings attached
Group of 8 most industrialized countries
1. Canada
2. France
3. Germany
4. Italy
5. Japan
6. Russia
7. United Kingdom
8. United States
The Millennium Development
Goals (MDGs)
Summary of successes
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& failures available
here (red menu on the
right)
Officially a UN initiative
But dependent on developed countries
… and autonomous international organizations (IMF &
World Bank)
8 goals to be achieved by 2015
1.
2.
3.
4.
5.
6.
7.
8.
Eradicate extreme poverty & hunger
Requires governAchieve universal primary education
ment intervention
Promote gender equality & empower women with taxes, reguReduce child mortality
lations & targeted
policies
Improve maternal health
Combat HIV/AIDS, malaria, and other diseases
Ensure environmental sustainability
Develop a global partnership for development
Conclusion
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A global capitalist system
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An increasingly integrated economic system…
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with wide disparities in wealth
Numerous policies aimed at guaranteeing
development & improvement in well-being…
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with unclear results
Annex 1: International division
At the time of developing
of labour 1
countries’ independence
N
O
R
T
H
S
O
U
T
H
Developed
country 1
Trade
Developed
country 2
Trade
Developed
country n
Manufacturing of
finished goods
Manufacturing of
finished goods
Manufacturing of
finished goods
Exports
Exports
Exports
Raw material and
agricultural products
Raw material and
agricultural products
Raw material and
agricultural products
+ some manufacturing
+ some manufacturing
+ some manufacturing
Developing country 1
Developing country 2
Developing country n
Annex 2: International division
of labour 2 Since the 1980s
N
O
R
T
H
Developed
country 1
R&D, manufacturing of
hi-tech finished goods
Exports
incl.
manufactured
goods
S
O
U
T
H
Trade
Investments
and/or
subcontractors
Developed
country 2
Trade
R&D, manufacturing of
hi-tech finished goods
Exports
incl.
manufactured
goods
Investments
and/or
subcontractors
Developed
country n
R&D, manufacturing of
hi-tech finished goods
Exports
incl.
manufactured
goods
Investments
and/or
subcontractors
Raw material and
agricultural products
Raw material and
agricultural products
Raw material and
agricultural products
+
growing manufacturing
+ services
Developing country 1
+
growing manufacturing
+ services
Developing country 2
+
growing manufacturing
+ services
Developing country n
Different parts of the finished good made in different developing countries