Development
Chapter 10
Economic Geography
• The study of the flow of goods and services
through space, as well as how people
provide for themselves in different places.
places
Key Question:
How do you Define and
Measure Development?
What does Development Mean?
• Development implies “progress”
progress
– Progress
P
iin what?
h t?
– Do all cultures view development the same
way?
– Do all cultures “value” the same kinds of
development?
Development
• Implies Progress.
Progress
• Early ideas of progress are Industrial
Revolution
Classification
• Underdeveloped,
Underdeveloped Developed,
Developed and
Developing Nations:
– To say a country is underdeveloped would be
politically incorrect, in light of the fact that the
word underdeveloped
p had a negative
g
connotations geographers developed a new way
to groups nations in the core-periphery model.
• This model characterized nations into either: core,
semi-periphery, and periphery nations.
Classification
• Characteristics of a Core
Nation:
– Have achieved high levels of
socioeconomic prosperity
and high standards of living
– Contain world cities such as
London, Tokyo, and New
York which serve as global
centers of economic activity.
– These state include the U.S.,
Germany, Great Britain.
• Characteristics of a SemiPeriphery Nation:
– Newly industrialized
countries with diverse
economic opportunities but
have extreme gaps between
rich and poor.
– These nations are usual in a
transition stage to
becoming a core nation.
– Examples: Chile, brazil,
India, China, and Indonesia
Classification
• Characteristics of a
Periphery Nations:
– Usually poor regions that
are very dependent upon
core nations.
– Low levels of economic
productivity and lack
infrastructure and have
rapidly growing populations.
– These place have benefited
little from globalization.
• Keep in mind that the
core-periphery model
focus on the economic
relationships
p among
g
places.
• The “slow world” of the
periphery is often
compared to the “fast
world” of the core because
of the lack of technology
and communication in
periphery nations.
Advantages of Production in
Periphery Nations
1)
2)
3)
4)
5)
Cheap Labor
Loose Labor Laws
Loose Environmental
Regulations
Low Taxes
The distribution of natural
resources by locating
different aspects of
production in different
countries.
–
Note: Most MNC’s are
conglomerate
gl
t corporations:
ti
composed of many smaller
firms that serve different
functions. (i.e. distance to
natural resources)
Issues with Measuring
Economic Development
• All measurements count the:
– Formal Economy – the legal economy that
governments tax and monitor.
monitor
• All measurements do not count the:
– Informal Economy – the illegal or uncounted
economy that governments do not tax or keep
track of.
Measuring Development
Gross National
P d
Product
(GNP)
Measure of the total
value of the officiallyy
recorded goods and
services produced by the
citizens and
corporations of a
country in a given year.
Includes things
produced
d
d inside
i id and
d
outside a country’s
territory.
Gross Domestic
Product (GDP)
Measure of the total
value of the officially
recorded goods and
services
i
produced
d
d by
b the
th
citizens and
corporations of a
country in a given year.
year
WITHIN A COUNTRY
Gross National
I
Income
(GNI)
Measure of the
monetaryy worth of what
is produced within a
country plus income
received from
investments outside the
country.
** Most common
measurement used
today.
Shortcomings of GNP/GDP
• Fails to show distribution of wealth.
Wallerstein’s three tier structure
Capitalist theory of Peter Taylor’s? EXPLOITATION
Other Ways of
Measuring Development
• Occupational Structure of the Labor Force
p Worker
• Productivityy per
• Transportation and Communications
per Person
Facilities p
• Dependency Ratio (#young + elderly per 100 workers
• Shortcomings of each?
Technology
gy
Differences in
Communications
Connectivity
Around the World
Dependency Ratio by Country, 2005
A measure of the number of people under the age of 15 and
over the age of 65 that depends on each working-age adult.
Development Models
Modernization Model
Walt Rostow’s model assumes all countries follow a similar path to
development or modernization, advancing through five stages of
development climbing a ladder of development
development,
development.
- Traditional- Subsistence farming
g
- Preconditions of takeoff - Progressive leadership “open-minded”
- Takeoff – Sustained growth similar to Ind. Rev.
- Drive
D i to
t maturity
t it – Ind.
I d spec. occurs, Int’l
I t’l trade.
t d
- High mass consumption – high incomes, widespread prod.,
service sector.
Models of Development
~Liberal Model ~
ƒ Assume that all countries
are at the same stage
~Structural Model~
ƒ general term for models
of economic development
ƒ All countries
t i are capable
bl
of development
ƒ A result of historically
derived power relations
within the global economic
system
y
ƒ Optimistic viewpoint
ƒ Only certain countries can
become developed
ƒ The structure is already in
place (maquiladoras)
Structuralist Theory
-Economic
Economic disparities are built into the
system.
-Economic
Economic hierarchy is planned.
planned
– Makes it hard for countries to move up ladder.
World-System
World
System Theory
• When p
political and economic relations
strengthened the areas connected (core nations)
begin to thrive but the nation not connected
(periphery nations) did not get these new
technological advancements and innovations. This
was Wallerstein’s theoryy as to whyy there are core,,
periphery, and semi-periphery nations.
• Recognizes difference in the world.
Struggling Countries
• Argentina suffered due to devalued dollar in
Brazil
• Drought,
Drought corrupt gov’t,
gov’t religios strife,
strife and
drop in oil cause economic struggles in
Malawi and Zimbabwe
• Natural disasters (Sri Lanka)
Dependency Theory
• The structuralist believe that development
does not happen everywhere due to
dependence on a core nation for money
-- Economic structures make poorer countries
dependent on wealthier countries.
-- Little hope for economic prosperity in poorer
countries.
• EX: Dollarization -El Salvador
Dollarization –
Abandoning the local currency of a country and adopting
the dollar as the local currency.
El Salvador went through dollarization in 2001
Impact of
Industrialization/Development
• Neocolonialism: Major
j world powers
p
control economies of
poor countries even though independent.
• Tourism usually places a negative affect on periphery
nations because even though it may support an economy
itt may
ay take
ta e away
a ay from
o the
t e local
oca culture.
cu tu e Itt also
a so takes
ta es away
a ay
from the local entrepreneurs.
– Tourism may promote awareness about a
particular culture but can take a harsh turn on
the cultural landscape.
Financial Organizations
• International Monetary Fund: goal to
stabilize exchange rates and supervise the
reconstruction of the world's
world s international
payment system. Countries could take out
small loans to help.
help
• World Bank: Goal is to combat poverty in
peripheral countries (bridges,
(bridges roads,
roads
schools). Head is US citizen in DC.
Commodity Chain
Series of links
connecting the
many places of
production and
distribution and
resulting in a
commodity that
is then
exchanged on
the world
market.
How processes operated at each step in the commodity
chain that produced the dolomite stone for this fireplace?
Three Tier Structure
Core
Periphery
Processes that incorporate higher
levels of education, higher
salaries, and more technology
* Generate more wealth in the world
economy
Processes that incorporate lower
levels of education, lower
salaries, and less technology
* Generate less wealth in the world
economy
Semi-periphery
Places where core and periphery
processes
p
ocesses a
are
e bot
both occu
occurring.
g
Places that are exploited by the
core but then exploit the
periphery.
* Serves as a buffer between core
and periphery
Compare and contrast Rostow’s ladder of
development with Wallerstein’s three-tier
structure of the world economy.
Key Question:
What are the Barriers
to and the Costs of
Economic Development?
De elopment?
Preventions of Econ. Development
• Desertification (Africa 2/3 arid/semi
arid/semi-arid)
arid)
• Quotas has lead to shifting of production
from country to country in the periph.
periph and
semi-periph.
• Post-colonial
P
l i l capitals
i l move inland.
i l d (Forward
(F
d
Capital)
• Competition of foreign developers
(European oil in Gabon)
NGO s
NGO’s
• Non
Non-Governmental
Governmental Organizations
-Attempt to improve plight of the people
-Guise
G
is to make money.
-”Parallel States”-have many NGO’s working
at any given time and are accountable to no
one. (Bangladesh 20,000)
Micro Credit Programs
• Offer small loans at high interest rates
• Encourage development in poor regions
• Give women fiscal power
• Alter social fabric (men’s social status,
alleviate malnourishment)
• Places with high mortality rates (AIDS) are
not so successful b/c daily survival more
important than development (default on
loan)
Barriers to Economic Development
• Low Levels of Social Welfare
– Trafficking
• Foreign Debt
– Structural adjustment loans
• Political Instability
• Widespread Disease
– Malaria
Foreign Debt Obligations
Total interest payments compared to the export of
goods and services.
Foreign Debt Obligations
Foreign Debt and Economic Collapse
in Buenos Aires, Argentina, 2001
Widespread Disease
• Malaria kills 150,000 children in the global
periphery each month.
Tamolo, India
This babyy sleeps
p
under a mosquito
net distributed to
villagers by
UNICEF workers.
Global Distribution of
Malaria Transmission Risk
Costs of Economic Development
• Industrialization
– Export Processing Zones (EPZs), maquiladoras,
and special economic zones (SEZs).
(SEZs)
• Agriculture
– desertification
• Tourism
Export Processing Zones
Areas Threatened by Desertification
Think of a trip you have made to a poorer
area of the country or a poorer region of
the world.
world Describe how your experience in
the place as a tourist was fundamentally
different from the everyday lives of the
people who live in the place.
Key Question:
Why do Countries
experience Uneven
Development within the State?
How Government Policies
Affect Development
• Governments
– get involved in world markets
– price commodities
– affect whether core processes produce wealth
– shape
h
llaws to
t affect
ff t production
d ti
– enter international organizations that affect trade
– focus
f
fforeign
i investment
i
in
i certain
i places
l
– support large-scale projects
Governments
and
Corporations
can create
Islands of
Development
Places within a
region or country
where foreign
investment, jobs,
and infrastructure
are concentrated.
Government-created
Government
created Island of Development
Malaysian government built a new, ultramodern capital at
Putrjaya to symbolize the country’s rapid economic growth.
Corporate-created Island of Development
The global oil industry has created the entire city of
Port Gentile, Gabon to extract Gabon’s oil resources.
Nongovernmental
Organizations (NGOs)
entities that operate independent of state and local
governments,, typically,
g
yp
y, NGOs are non-profit
p
organizations. Each NGO has its own focus/set of goals.
Microcredit program:
loans given to poor
people, particularly
women, to
encourage
g
development of
small businesses.
How do actors in nongovernmental organizations (NGOs)
mobilize political change?
An IIndonesian
A
d
i woman (on
( left)
l ft) who
h migrated
ig t d to
t Saudi
S di Arabia
A bi as a
guest worker talks with an Indonesian activist (on right) who works to
defend migrant workers’ rights.
Take an item of clothing out of your closet, and
using the Internet, try to trace the commodity
chain of production. What steps did the item go
th gh before
through
b f
reaching
hi g you?? Consider
C
id whether
h th
core or peripheral processes were operating at
each step and consider the roles governments
and international political regimes played along
each step.
p
Industry and Services
• Production of a
finished product no
longer needs to be in
the same region of
sale.
Shoe factory Ex: Nike
today, vs. Boston 1925
Industrial Revolution
• Spurs ideas of mass industrial growth,
growth
production, and consumption.
• Hand looms originally used for textiles
• Colonial expansion possible b/c of
commercial
i l companies
i (British
(B i i h East
E
India
I di
Company)
• First power source were
Foot p
pedals and H20
Industrial Revolution Cont.
Cont
• Smelting,
Smelting or burning coal in a hot vaccum
created coke (purer form of carbon).
• Railroad in England (1825) aids production
• England held monopoly over products made
and
d skills
kill to maintain
i i infrast.
i f
• Why Britain? Proximity to coal fields, iron
ore, coastal ports.
New York acts as
A “break
bulk”
Industry
in of
N.A.
P i tinttocolonial
Point
transfer
t
f
Began
CargoEra.
from and to
Other containers
For shipment
S. Ontartio links
T parts
Two
t off
U.S. Manufact.
Belt, Buffalo
And Detroit.
Montreal’s us
of
Hydroelectric
Makes
energy
Cheaper.
Britain Industry Factoids
• Many emerge b/c of
raw materials
(exception is London)
• Industrial cities move
b/c of railroads
(London & Paris)
Rhur
industrial
50%
of g
goods
Saxony
moved to
I
Industrial
d
t i l strip
ti
area
Through
Europe
Light industry
along
is Come
connected
to its France,
through
(fiber optics)/used
Germany,
y and
port
p
by
y
the
2 ports
in the
In auto
industry
Poland due to
Rhine River
Netherlands
Location of
(Europe's greatest
coalfields
Indust Complex)
Indust.
St. Petersburg
Russia’s oldest
M
Manufacturing
f t i center
t
After WWI, Ukraine
P d
Produced
d 90% off coall
Needed for S.U. to
industrialize
Industrialized country that
Does NOT lie near many
1/25thSources
the landof
ofraw
the materials.
U.S. and
Has the worlds 2nd largest
Kanto economy
region is countries
Most industrious (region is most
Developed and urbanized)