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1) The Global North and South
a) A New Division
i) In the last half century, a growing global pattern has emerged, in which
the rich, industrialized nations are leaving the poor, underdeveloped
nations of the world behind- in general, this can be seen as an economic
split between the relatively developed countries of the northern
hemisphere versus the relatively undeveloped countries of the southern
hemisphere
b) Rich Nations
i) Obviously, the developed nations of the North include such nations as the
United States, Canada, the European Union, Japan, and Australia
ii)These nations, which are generally located in the northern temperate
zone, control the majority of the world's wealth and capital
iii) As a rule, people in these northern nations are literate, enjoy at least
basic health services, and make enough money to survive- although there
are exceptions
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iv) Also, as a rule, these nations are basically capitalist in their economies,
allowing the forces of the free market to dictate production and
consumption issues, as well as reward market success
v) Northern governments generally support and maintain communication
and trade infrastructures, as well as public education and social support
services
c) Poor Nations
i) The picture in the South is notably different, although there are many
exceptions here, as well
ii)The South is generally underdeveloped in terms of industry, and often
lacking in educational or economic opportunities or social services
iii) Nations in the South often have large populations and high rates of
population growth, and are plentiful in natural resources needed by
themselves and the nations of the North, and yet they have only rarely
been able to profit by this
iv) For many who live in the global South, survival is a serious issue faced
by many of the people
d) Migration
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i) The gap between the rich and the poor nations of the world is widening,
as the developed world leaves the less-developed one further and further
behind, and yet the people in these poor countries are often aware of this
gap, and many seek to migrate to the North, where they perceive more
opportunities and privileges
2) Economic Interdependence
a) The Role of Multinational Corporations (MNCs)
i) As the standards of living in the North and South grow farther apart,
there is a simultaneous increase in the economic interdependence of the
two regions
ii)While most of the wealth and capital reside in the North, many resources
lie in the South, including a vast source of cheap labor, a fact which has
not been overlooked by Northern businesses
iii) Many manufacturing jobs, which used to be plentiful in the
industrialized North, have moved to the South, taking advantage of the
lower costs of labor and production to be found there, as well as the
smaller number of regulations to be found regarding business practices
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iv) Many huge multinational corporations have invested in the developing
nations of the South, where they can set up and run factories for less, and
have more control than in the North, all while being closer to the
resources they need
v) Often, these MNCs will bring new technologies, aid, and jobs into a
region, but they always maintain control, so that the bulk of the profits
made return to the MNC investors, and the locals never gain a position to
make demands
b) The Oil Crisis
i) While most of the time the North retains general control over the South
and Southern resources, this is not always the case, as was demonstrated
twice in the 1970s
ii)By the late 20th century, much of the world ran on oil, which was
plentiful and cheap in the '50s, '60s, and early'70s, and was used not only
to run vehicles, but also run factories and to make plastics, fertilizers, and
other chemicals
iii) In 1973, the Arab nations of OPEC (Organization of Petroleum
Exporting Countries) that produced much of the world's oil decided to
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show the Western world that they were not to be taken lightly, and they
raised the price of oil while simultaneously halting production
iv) Prices skyrocketed and shortages were widespread, leading to serious
problems in the world economy and the realization that all nations were
at least somewhat interdependent
c) The Debt Crisis
i) A related problem was the debt crisis, which hurt all nations, but
especially those of the South
ii)As the less developed nations of the world tried to modernize their
economies, they borrowed heavily from the wealthier nations of the
North, planning to make payments based on their improved industrial
output
iii) Many had built factories designed to run on oil, and so the oil crisis hit
them especially hard, since it reduced their profits
iv) In the late 1970s and early 1980s, the world markets slumped, and
interest rates rose, producing lower profits for the fragile economies of
the South
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v) Demand fell while costs rose, and soon many nations were unable to pay
off their debts, and their economies stalled
vi) The drop in repayment hurt the wealthier nations, too, as their banks
lost money to unrecoverable debts, and the World Bank and the
International Monetary Fund (IMF) worked with the banks and the debtor
nations to reduce, reschedule, or even cancel debt, so that trade could
resume
vii) Conditions for rescheduling debt generally included free-market
policies in the debtor nations, which led to the privatization of the new
industries
d) The Asian Economic Crisis
i) The Asian Economic Crisis occurred in the late 1990s, and was yet
another example of the interdependence of world markets
ii)A growing recession in Japan (the world's second largest economy) led to
recessions with her major trading partners, particularly in the neighboring
Asian economies of South Korea, Taiwan, Singapore, and others
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iii) All of these nations experienced major economic setbacks, with rising
unemployment and increasing poverty among the lower and working
classes
iv) Russia and Brazil, both of which were reliant upon Japanese economic
aid, struggled to maintain their economies in the face of the decrease in
support
e) Economic Organizations
i) The two major organizations which deal with international economic and
exchange issues are the International Monetary Fund and the World Bank
ii)The International Monetary Fund (IMF) regulates currency exchange
rates and finances short-term loans throughout the world, in order to
facilitate trade and international commerce of all sorts
iii) The World Bank is a lending agency designed to lend money to less
developed countries trying to build significant economic assets, such as
the development of a region for industry, or the development of new
roads
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iv) While these agencies have given a great deal of aid to many countries,
such aid often comes with the requirement that locals do things according
to the banks' plan or schedule, and that has sometimes led to resistance
3) Obstacles to Development
a) Geography
i) One of the major obstacles to development, particularly in Africa, is the
haphazard arrangement of borders devised by the Europeans, with no
regard for resources, ethnic groupings, or history
ii)In addition, many impoverished areas just happen to lie in areas that
receive uncertain rains, are subject to disease or other natural disasters, or
cannot produce enough crops to sustain their populations
b) Population and Poverty
i) Another major problem in the developing world is the improvement of
health care and survival, which has led to extremely rapid population
growth in these areas
ii)Farmers in poor countries continue to have many children, and since they
might now all survive, they become a burden on the resources of the
country
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iii) The result is that many people face daily battles against starvation, and
the UN estimates that 35,000 children die each day from lack of food
c) Economic Dependence
i) A third problem is related to that of geography, in that the colonized
nations formerly controlled by the European powers are still often
dependent upon them
ii)European land owners of the 18th and 19th centuries set up economic
systems where they would have local populations supply raw materials
and resources for European factories, and encourage dependence upon
the colonial states in return
iii) Often, freed colonies have been unable to sufficiently alter their
economies to become truly independent, and thus remain dependent
iv) In the 1970s, when many former colonies took out loans to create their
own industrial bases, they entered deeply into debt, as noted before, and
when the world economy slumped they had to devote much of their
national production to simply paying off their debts
d) Economic Policies
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i) Many of the developing nations of the world pursued socialist economies
rather than capitalist ones, in the hopes of making rapid improvements
ii)Often, these economic systems have reduced economic growth rates over
the long run, despite early economic gains
e) Political Instability
i) A problem experienced by many of the developing nations of the world
has been war or civil strife
ii)Many nations have had power struggles between internal factions which
have led to generations of people being raised with little education and no
opportunities
iii) Dictatorships have often taken power in these nations, with the leaders
using what national wealth existed to purchase weapons that might ensure
their continued grasp on power rather than educational or economic
improvements
4) Development and the Environment
a) Growing Threats
i) One of the threats which affects both the rich and the poor is the
continuing abuse of the environment by all groups
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ii)Particularly since the Industrial Revolution, humans have had a hugely
detrimental effect upon the environment through such practices as strip
mining, over fishing, use of chemical pesticides and fertilizers, and
emissions of "greenhouse gasses" into the atmosphere
b) Protecting the Environment
i) Often, it is the wealthy nations that do the most damage to the
environment, and yet they are also generally the most vocal about
protecting it, and have enacted laws to do so in most advanced nations