Lecture 7 - Countries according to the Human Development...

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Unformatted text preview: Countries according to the Human Development Index (2007) Poverty & Development This week Global trade & finance (from last class) Poverty & development Developing countries & development The debt crisis Current issues Developing countries & development Where developing countries come from The choice of words Developing countries Third World countries Less developed countries The South The global South Timeline 1500s-1945: colonization 1945-1970s: decolonization The Cold War context New countries as a "problem" How to recognize developing countries World Resources Institute search engine for basic poverty figures Geography GDP per capita: $1/day or $365/yr see data for the whole world Proportion of population below $1/day (2008) Size of economic sectors in total GDP in total employment The international division of labour 1 At the time of independence N O R T H Developed country 1 Manufacturing of finished goods Trade Developed country 2 Manufacturing of finished goods Trade Developed country n Manufacturing of finished goods Exports Exports Exports S O U T H Raw material and agricultural products + some manufacturing Raw material and agricultural products + some manufacturing Raw material and agricultural products + some manufacturing Developing country 1 Developing country 2 Developing country n Three categories (more or less) of developing countries 1. Agriculture & raw materials producers Light industry, manufacturing Oil producing countries * In reality: a more complicated picture 2. 3. What it means to develop... the capitalist way The Cold War and the invention of "development" Peasants Dancing, 1651 Johannes Lingelbach (Dutch, 16221674). Oil on canvas; 26 1/2 x 29 1/2 in. (67.3 x 74.9 cm) Industrialization & economic growth 1950s to early 1980s Traditional mass consumption society A role for the state What it means to develop the human development way "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 knowledge secure livelihoods, security against crime and physical violence, satisfying livelihoods violence leisure hours, political and cultural freedoms and sense of participation in community activities. The objective of development is to create an enabling activities environment for people to enjoy long, healthy and creative lives." long 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/. Measured by the Human Development Index (HDI)* 2010 Human Development Report The debt crisis The first Oil Shock (1973) Who When Why How Algeria Angola Ecuador Gabon (fmr.) Indonesia (frmr) Iran* Iraq* Kuwait* Libya Nigeria Qatar Saudi Arabia* United Arab Emirates Venezuela* http://www.opec.org/opec_web/e * Founding members Loans, interest rates and the mechanism of debt "Petrodollars" & Western banks Developing countries' wager Interest rates One loan, two loans, three loans... Mexican government's default (1982) The role of the International Monetary Fund (IMF) Lender of last resort to developing countries Allowing debtor governments to function Allowing debtor governments to pay back creditors Debtors: those who have debts Creditors: those who are owed money Therefore debtors are supposed to reimburse creditors Structural adjustment programmes (SAPs) Conditionality: conditions to get loans privatization of state-owned enterprises reductions in gov spending (health, education & social) elimination of subsidies (cooking oil, staple foods, fuel) deregulation of labour markets adoption of free trade allow foreign investors to invest freely Former IMF Managing Director Michel Camdessus and former Indonesian president Suharto in Complete opening up of the economy What SAPs were supposed to do Impose sound policies What they did Restore government budget & guarantee loan repayment Restore credit rating Give foreign investors confidence Reduction in wealth redistribution Reduction in social, health & education spending Increase in cost of living Political instability Create "good investment climate", "conditions for economic growth" & "give investors confidence" NB: since the late '90s restoration of social, health & education spending Where did investments go? Source: International Labour Organization. (2004). A Fair Globalization: Creating Opportunities for All. Geneva: ILO. pp. 28-29. h ttp://www.ilo.org/public/english/wcsdg/docs/report.pdf Benefits Developing countries get investments (multinational/transnational corporations) Jobs are created Taxable income for developing countries' govt Ability to pay back loans Problems 12 countries, 75% of investments South-South competition Dubious labour practices Worse manufacturing jobs than pre-debt crisis There are more workers than are needed(!) Foreign direct investment` Mergers & acquisitions: merger two companies become one; acquisition one company buying out another Source: United Nations Conference on Trade and Development. (2009). Press release: Global Foreign Direct Investment now in decline. Retrieved 9 February 2010, from http://www.unctad.org/Templates/webflyer.asp?docid=10930&intItemID=1528&lang=1. N O R T H The international division of labour 2 Since the 1980s Developed country 1 R&D, manufacturing of hi-tech finished goods Trade Developed country 2 R&D, manufacturing of hi-tech finished goods Trade Developed country n R&D, manufacturing of hi-tech finished goods Exports incl. manufactured goods Investments and/or subcontractors Exports incl. manufactured goods Investments and/or subcontractors Exports incl. manufactured goods Investments and/or subcontractors S O U T H + growing manufacturing + services Developing country 1 Raw material and agricultural products + growing manufacturing + services Developing country 2 Raw material and agricultural products + growing manufacturing + services Developing country n Raw material and agricultural products Different parts of the finished good made in different developing countries Current issues Debt cancellation Jubilee 2000 (UK , US & Vatican campaigns) the "odious debt" human consequences impossibility of repaying the debt Impossibility of repayment generally acknowledged, but... Group of 8 most indus which LDCs should benefit? "moral hazard" G8 summit of Gleneagles, July 2005 debt cancellation for 34 poorest countries* trialized countries 1. Canada 2. France 3. Germany 4. Italy 5. Japan 6. Russia 7. United Kingdom 8. United States Conditionality The Millennium Development Goals Summary of successes Summary of successes (MDGs) & failures available & failures available Officially a UN initiative But reliant on developed countries ... and autonomous international organizations (IMF & World Bank) 8 goals 1. 2. 3. 4. 5. 6. 7. 8. here (see red menu here (see red menu on the right) on the right) Successes & failures by Successes & failures by the numbers here the numbers here Eradicate extreme poverty & hunger Achieve universal primary education Promote gender equality & empower women Reduce child mortality Improve maternal health Combat HIV/AIDS, malaria, and other diseases Ensure environmental sustainability Develop a global partnership for development Conclusion A global capitalist system An increasingly integrated economic system... With wide disparities in wealth Numerous policies aimed at guaranteeing development... With unclear results ...
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This note was uploaded on 01/31/2012 for the course POL 2107 taught by Professor Bourgault during the Spring '08 term at University of Ottawa.

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