Module 2:
Caribbean Studies
Date Jan 19 -20
Duration: 4 hrs
Topic: Conceptualizing Development
Expected Learning Outcomes
1. Analysis of the concepts of development
2. Grasp of the interrelationships among the different approaches to development (human,
economic, sustainable)
3. Grasp of the different indicators of development
4. Grasp of the different factors that promote and hinder development
5. Evaluation of how development has been influenced by political, social, cultural,
environmental and technological factors
Content
Concepts of Development
• Development has been understood to have 3 different interpretations:
1. Development as an enactment of human values: This concept essentially says for anything
to develop, improvement must be based on some values which are being implemented. For
example one may argue that for an economy to develop there must be an implementation of
values which raise the standard of living
2. Development as increasing differentiation or complexity: This concept essentially means
that for anything to develop it must become more complex and differentiated where the
component parts will interrelate with deeper linkages.
3. Development as liberation or human freedom: This states that for people to be developed
there must be an accompanied growth in autonomy, the options they can pursue and the selfefficacy (the significance of their actions). For example people see education and its ability to
empower people to rise in their societies
Approaches to development
• There are three main approaches to development:
1. Economic Development
2. Human Development
3. Sustainable Development
Economic Development
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The specific goal of development in the decolonization era was economic development
through economic growth
This referred to ‘an increase in the value of goods and services produced by a country
within a specific time period’
It was expected that the problems of poverty and backwardness would be solved once
Caribbean countries experienced improvements in economic growth.
The traditional emphasis was to implement measures which solely increased production
while limiting population growth
This formed the basis of economic policies in the Caribbean from the 60’s to the 80’s
and these ethnocentric approaches modelled in a uniform way not addressing the
problems faced by citizens.
While production did increase to some extent the citizens have by large part not
benefitted from this growth.
Economic development has evolved since then to focus not only on economic growth on
welfare of the people and poverty reduction
The economic and non economic indicators of development are collectively used to
assess the level of development among countries.
Some Economic Indicators of Development include:
• There were various indicators measure this ‘development’ however they only measured
accurately economic growth.
• These included:
1. Gross National Product (GNP): Value of goods and services from a country plus any foreign
revenue. GNP per capita is = GNP ÷ population.
2. Gross Domestic Product (GDP): The total market value of the goods and services of a country
in a given year. GDP per capita = GDP ÷ population
3. Population Growth Rate: calculated by considering birth and death rates and migration
statistics therefore if one has a smaller population then GDP & GNP per Capita should rise
4. Age dependency ratio: the ratio of people under 15 and over 65 (dependents) to the working
age population (those between 15-64). The theory is if there are more working aged people to
take care of dependents the government would spend less taking care of them.
• Levels of Industrialization
• Employment Levels
• Economic structures (Primary, Secondary, Tertiary Industries)
• The Levels of local and foreign debt
• Levels of foreign aid receipts
• National Resource Accounting – How natural resources are depleted to drive productivity
• Purchasing Power Parity (PPP): – Assesses the impacts of inflation, shortages and dislocation
of the economy
Human Development
The Human Development Paradigm (HDP)/Human development Index (HDI) in the 90’s brought
together ideas from economic development and sustainable development to find a more
holistic way of describing development but putting humans at the centre.
• The HDP/ HDI has three basic views
1. That people are the end means of development: so if our quality of life increases we
observe development
2. That development is largely about broadening people’s choices so they’ll have more
opportunities to improve themselves in ways that’ll make them happy and bring income
3. That poverty and income inequality are the major problems in human societies which
prevent good quality of life
• Therefore human development as envisaged by the HDP includes improving the quality of life
of people through the four areas of: empowerment, equity, productivity and sustainability
• The notion comes not from ethnocentric views as empowerment i.e. broadening human
choices differs considerably among countries. In one country it may be through education,
another may be through opening crown lands
Sustainable Development
• A concept of advancing a people’s quality of life, through both economic growth and
development and human without compromising future generations and their capacity to meet
their own needs.
• In this type of development if human development needs are compromised improvements
will be unsustainable
• (So yeah all types of development are connected here)
• If equity is compromised so will the environment be. In severely unequal places like Haiti
where daily survival is more of priority than the well being of future generations the
environment will be exploited i.e. cutting of forests which lead to soil erosion
• Hence measures must be implemented to reduce inequality and poverty.
• Big companies often exploit the environments to make a profit like destroying forests,
overfishing and polluting.
• Therefore measures to increase the empowerment of citizens to raise issues against the
interests of big business is critical to ensue sustainability.
• Equity: – Refers to the commitment on the part of the people and government of a country to
enable all social groups to access the opportunities that the country offers and be fair to all
groups as they grasp these opportunities
• Productivity (Based on equity) – Refers to an understanding that if people have equal access
to educational and job opportunities then their productivity will probably increase. So if one
has adequate job qualifications they probably won’t be in a dead end job where there is no
challenge.
• Empowerment (Based on equity and productivity) – Refers to the degree to which individuals
have a feeling of self-efficacy, meaning that they have a knowledge that they are capable of
doing things to improve their lives. If people have equal opportunities to be productive citizens
they’ll probably be happy and will have a high esteem making them make broad decisions in
their best interest
Non Economic indicators of Development
• Life Expectancy
• Levels of Education
• Ratio of Doctors to the Population
• Labour Productivity
• Distribution of Income
• Improved institutions and attitudes
• Urbanization
• Birth and Death Rates
• A nationally coordinated system of policy measures
Indicators and examples of them associated with the paradigm
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National Sustainability coordinated system
Development Plan of policy measures
Increase in Literacy Levels
Empowerment institutions and Gender Equity and attitudes at the workplace
GDP per Capita
Energy efficiency
Productivity GNP per Capita
Internet penetration /Usage
Increase in modern technology knowledge
Levels of income
Child malnutrition eradicated
Equity
Social and Economic Equalization
Factors that influence development:
Political Ideologies
These are systems of belief about governance and power that reflect the needs and aspirations
of particular social groups ex. Capitalism, communism and socialism. Capitalism is the prevailing
ideology in the Caribbean.
• During the post colonial era since the emphasis was economic growth under Capitalism and
yet poverty was still a problem some believed to increase the way of life of the people
alternative ideologies should be implemented.
• These people were influenced by the Dependency theorists of Latin America who stated that
the colonial condition encouraged dependency, underdevelopment and poverty through an
imbalance in the trading relationships and the indoctrination of the superiority of the mother
country.
• So the attempt was to focus on decreasing poverty rather than on economic growth which
came into direct contravention with the moneyed classes which ruled at the time.
• Ideologies can foster fragmentation and makes countries vulnerable to external interference
in domestic affairs of the countries e.g. Cuba and also limits the extent to which countries is
able to forge a coordinated foreign policy. On the other hand the region has been able to
maintain stable and democratic governments, which have provided opportunities for economic
stability and favourable investment climate
• The Marxist type revolutions which took place in Cuba (1959) and Grenada (1979) and the
attempts to establish such principles in Guyana (1960’s & 1970’s) were focused on increasing
human development through increasing Equality.
• Cuba’s economy became centrally planned, with the state owning all productive enterprises
and property. The population gained in exchange goods and services at cheap prices, free
health care and housing. However productivity decreased due to corruption.
Social Factors
• These include poverty and inequality (distribution of wealth and stagnant mobility)
• Distribution of wealth and resources can either hinder or promote development.
• Caribbean society has always been one characterized by social stratification where the elites
owned the capital; the middle owned some property while the lower classes only had their
labour to sell.
• If wealth is unevenly distributed then this can hinder development.
When concentrated in the hands of a few it can lead to low level of investment, high
unemployment, high level of unskilled labour force as there is low expenditure on education. It
can also result in corruption.
As a consequence there is low productivity among high-income earners, capital flight and brain
drain. It leaves government with a high borrowing from international sources, which results in
higher taxation rate and rising inflation.
To solve this, incentives for production have to be offered to attract investors and government
has to increase its involvement in areas such as infrastructure, development, education,
minimum wage, high tax on luxury items, harsh penalties for offenders, better auditing and
accountability.
• Most countries of the Caribbean especially Jamaica display an inequitable distribution of
wealth.
In Jamaica it is skewed in favour of the ruling class, which consists of large landowning families,
local capitalists, international capitalist and a small number of strategically placed professional
managers. These classes of people in Jamaica control the commanding heights of the economy
(in 1970s less than 1% of the population controlled 70% of the wealth in the economy. Majority
of the wealth concentrated in the hands of 21 families :
There is no official rich list for Jamaica, but in Essays on Power & Change in Jamaica (edited by
Carl Stone), Stanley Reid identified the famous '21 family' groupings as the major centres of
power in the early 1970s. According to his findings, 125 of the 219 existing directorships and 70
per cent of the chairman in Jamaica's corporate economy were drawn from the 21 families.
The supergroup
A 'supergroup', including the Ashenheims, Desnoes-Geddes, Harts, Henriques and Matalons,
were the key families, occupying one of every three directorships. Their span of control and
influence covered finance, construction, manufacturing and distributive trades.
The Issas and McConnells were important elements of the corporate landscape in the
distributive trade, tourism and agriculture. Attorneys-at-law and legal firms in 1972
represented the second-largest source of mortgage finance, and this grouping was dominated
by the Ashenheims, Harts, and others who were connected to the 21 families.
The construction sector in those days, in terms of building supplies, was in the hands of the
Ashenheims, Matalons, Mahfoods, DaCostas, and Henriques through their ownership in Carib
Cement, ICD, Lascelles, Pan Jam, etc.
New names have emerged and corporate wealth and power have shifted somewhat in the last
30 years with the entry of some important new players, the decline of others, and increased
foreign ownership in a number of areas.
Jamaica's corporate economy has, however, been lacking in dynamism, which partly accounts
for our under-performance in economic development. Traditional key groups still control the
levers of economic power, although the faces are less prominent.
Changing class boundaries
• If within society there are no avenues or scope for social mobility then this can lead to
antagonism as people will see themselves as inferior as or less important than those who
occupy higher status. A rigid class structure breeds insecurity/ mistrust and this can have a
negative impact on development. Some avenue for upward social mobility must exist to
reward people who are industrious, visionary and productive
Economic Factors
• These factors dictate how limited resources are used to satisfy needs and unlimited wants
• Since resources are limited it is essential to allocate them in the most efficient way possible
for the benefit of most people.
• Resources can be divided into Land, Labour, Capital and visionary Leadership.
• Leadership ensures stability and is what will envision for the future what’s needed and have
that available when the time comes.
• So factors are: –
The maximum use of resources
– Efficient usage of time, money and energy
– Reducing the effects of external events (war, crime)
• A country can increase resources through:
– Discovery of natural resources
– Increasing foreign investments
– Expanding the skilled labour force
– Technological Advances
• When these resources are properly allocated:
– Goods and services in the local market will become more competitive
– Economic benefits will accrue, facilitating higher employment
– Social benefits will accrue increasing employment also and when this increased revenue is
well spent human development will increase
Gini index measures the extent to which the distribution of income or consumption
expenditure among individuals or households within an economy deviates from a perfectly
equal distribution. A Lorenz curve plots the cumulative percentages of total income received
against the cumulative number of recipients, starting with the poorest individual or household.
The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute
equality, expressed as a percentage of the maximum area under the line. Thus a Gini index of 0
represents perfect equality, while an index of 100 implies perfect inequality.
Technological Factors:
• These relate to the use of mechanical and electric instruments to solve practical problem of
production
• When used properly there can be increases in:
– Management Effectiveness and Performance Efficiency
– Organized functions and intelligent workforce
– New products and services
• However competition from outside forces can reduce the demand in traditional goods and
actually reduce development and growth
Environmental Factors
• These relate directly to nature but indirectly to economics because we need raw materials as
well as land to dump our waste.
• If the environment is sustainably taken care of the carrying capacity of the land can increase
leading to boosts in the productive sectors (primary, secondary and tertiary industries) as well
as through tourism.
Activity
1. Outline FOUR indicators of development and describe their relevance as indicators of
development (20 marks)
2. Explain how the distribution of wealth in a Caribbean country impacts on its development.
(20 marks)