AQA Geography A2 Development and Globalisation

Defining development

The term development refers to an improvement in a number of different characteristics of a population. Development can suggest economic, demographic, social, political and even cultural changes:

• Economic development - an increase in a country's level of wealth. could be accompanied by a decrease in numbers employed in agriculture and increase in those involved in manafacturing and services. greater access to, and use of, natural resources. Environment is exploited in an increasingly sustainable fashion
• Demographic development - an increase in life expectancy and an overall fall in the death rate combined with falling birth rates
• Social development - include a range of changes affecting the quality of life. For example, improved levels of education and literacy, access to medical facilities, improved levels of sanitation, better housing and increases in personal freedom
• Political development - ffreedom means that people have a greater say in who forms the government and therefore the impact that it can have on their lives

• Cultural development - greater equality for women and better race relations in multicultural societies

Mesuring development

The most commonly used measurement of development is a country's gross domestic product or gross national product

• GDP is the total value of all finished goods and services produced by a country in a year, usually expressed in amount per head of population
• GNP is the total value of all finished goos and services produced by a country in a year, plus all net income earned by that country and its population from overseas sources. Also expressed in amount per head of population.

Both usually given in US dollars so that comparisons can be made.

Using such measurements an early classification of development divided the world into three groups:

• First world - also known as the developed world, including Western Europe, North America, Japan, Australia, New Zealand
• Second world - covered the state controlled communist counrties such as the former USSR and the countires of Eastern Europe
• Third world - also known as the developing world, containing all the other countries in Africa, Asia and Latin America

Today this classification is too simple. It is now possible to recognise the following:

• Developed countries - most highly developed countries, whos populations enjoy high living standars
• Developing countires - countries at a lower stage of development
• Least developed countires - countries with very low living standards, low life expectancy, high infant mortality, low levels of education etc. Sub-Saharan Africa.

• Newly industrialised countries - countries that have begun to develop through industrialisation in the last 40 years. Some of these, such as Singapore, could be classified as developed countires. It is also possible to recognise a group that has only just started on this process, known as recently industrialising countries
• Centrally planned economies - communist countries still exist, but only a few. North Korea is a good example
• Oil-rich countries - these have a high GNP per head, although wealth may be concentrated in the hands of a few people. Without oil these countries would probably fall into the developing group. Saudi Arabia is a good example

As countries develop, they pass form one condition to another. The transition is gradual, with no abrupt points of change. The development process, with countires at various stages of development and developing in different ways, is referred to as the development continuum.

The more developed countires have high levels of economic growth and GNP per capita, but low levels of population growth, infant mortality and numbers of people per doctor. Less developed countries have the reverse of this. There is therefore a development gap between these groups of countries. Most developed countries are in the Northern hemisphere, while the poorer countires lie to the South. The North-South divide describes the difference in wealth between the developed and developing world. In 1980, a report by the German chancellor Willy Brandt proposed a line as a visual depiction of the North-South divide. This became known as the Brandt line. The Brandt report demanded that the countries of the south be integrated into the global economic system. Brandt argued that this would bring about improvements in conditions in disadvantaged countries. Richer industrial countires of the North were called upon to share their means and power with the countries of the south.

In recent years, falling commodity prices and rising interest rates have meant that many poorer countries are unable to repay international loans. This 'Third World Debt' has grown until the interest on the debt exceeds the amount that the country produces so the debt can never be repaid. There have been initiatives to resolve the situation, particularly the G8 summit of 2005 which proposed the cancellation of over $40 billion of debt from the poorest countries.

Using GNP or GDP to measure development is flawed. There may be differences in wealth between regions of a country and between various groups. These measures also fail to take into account the local cost of living and thus the purchasing power of peoples incomes. One widely used alternative measure of development is the HDI. This measures:

• life expectancy at birth
• adult literacy, and enrolment in education at primary, secondary and tertiary levels
• real GDP per capita ( based on the purchasing power of peoples incomes)

The HDI has been criticised because some countires traditionally placed in the developing world have the same HDI as some countries in Europe. This occurs because countries can promote human development even though their income is low.

• Many countries South of the Sahara would occupy the lowest places on any list of development.
• Their biggest challenges are poverty, hunger, disease and high birth rates that leave them vulnerable to many types of disaster
• lack of roads, healthcare, teaching provision and power sources all mean that countries are unable to provide basic needs for most of the population.
• Widespread occurence of HIV/AIDS and the frequent conflicts accross the region have not helped
• to move upward on the development ladder, these areas need foreign investment

• is the increasing interconnection in the worlds economic, cultural and political systems
• TNCs and nation-states are two of the major players in the global economy
• the growth of TNCs has been particularly rapid since the 1970s
• 1975, there were around 7,000 TNCs, today there are more than 60,000

There are three main forms of globalisation:

• economic - TNCs have been the major force in increasing economic interdependence and several generations of newly industrialised countries have emerged
• cultural - Western culture has diffused to all parts of the world through television, cinema, the internet, newspapers and magazines
• political - the influence of nation states has diminished in many areas as more and more countries organise themselves into trade blocs. The influence of Western democracies on developing countries has also been strong

Globalisation can be seen interms of:

• urban - a hierarchy of global cities has emerged to act as centres for the global economy
• demographic - the growth of international migration and the rise of multicultural societies
• linguistic - the emergence of English as the working language of the 'global village'
• environmental - the impact of activity in one country has a clear impact in others

History of globalisation

Some commentators believe that globalisation actually began in the late 19th century when:

• transport and communication networks expanded rapidly around the world
• world trade began to grow, with an increase in the level of interdependence between rich and poor nations
• capital flows began to expand as European companies started operations in other parts of the world

Events in the early 20th century, such as the Great Depression, caused countries to fall back on their own resources, with the production process being mainly organised within national economies. Since the 1950s, however, a new global division of labour has emerged, reflecting:

• the fragmentation of production processes across national boundaries which has changed the geographical pattern of specialisation at a global scale
• international trade becoming increasingly complex
• the emergence of an increasing number of NICs such as Singapore and Taiwan
• new generations of NICs
• the intergration of the Soviet Union and the countries of Eastern Europe into the capitalist system
• the opening up of large economies of China and India to the outside world

• defined as 'marketing on a worldwide scale, reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives'.
• when a company becomes a global marketeer, it views the world as one market and creates products that fit the various regional marketplaces
• the ultimate goal is to sell the same thing, the same way, everywhere
• Coca-Cola is an example of a company with a single product - only minor elements are tweeked for different markets

Patterns of production, distribution and consumption

Globalisation brought about a new international division of labour. It is possible to recognise two main groups:

• the highly skilled, highly paid decision-making, research and managerial occupations. On a global scale, these are largely concentrated in developed countries
• the unskilled, poorly paid assembly occupations. These tend to be located in developing countries that have low labour costs

This simple division has undergone radical changes in the last 40 years. Many countries that were classified as developing countries have become NICs, and even within this group it is possible to recognise at least 3 generations, all at verious stages of development

Manafacturing

• 1954, 95% of manafacturing was concentrated in industrialised economies
• since then, decentrialisation has occured largely as a result of FDI
• filtering down of manafacturing industry from developed countries to lower wage economies is known as global shift
• high technology is no longer associated with high productivity and high wages
• transfer of technology enables countries in the developing world to increase productivity without raising their wages to the same levels as developed countries
• this could widen the development gap, as workers in the developing world are paid less to make the same products as those in the developed countries
• by 21st century, more than 50% of manafacturing jobs were located in the developing world
• 60% of exports from those countries to the developed world were manafactured goods

Services

• provision of services has become increasingly detached from the production of goods
• e.g. financial sector has no direct relationship with manafacturing
• as manafacturing has become more dispersed worldwide, high level services have increasingly concentrated in places other than the old centres of manafacturing
• 1990s, growing number of transnational service conglomerates emerged, seeking to extend their influence on a global scale
• recent trend of decentrialisation of low level services from the developed to teh developing world
• globalisation of services is following the pattern seen in manafacturing over several decades
• consequence of global shift has been deindustrialisation in the richer countries
• global shift is not the only factor - outmoded production methods, products at the end of their life cycles and poor management have all contributed to the decline in manafacturing in those regions

First phase

• key element in globalisation is emergence of NICs
• when TNCs looked for areas where labour and other costs were lower, the countries of east Asia were targeted
• Japanese TNCs were among first to seek new areas for their operations and looked to their less developed neighbours, particularly South Korea and Taiwan
• These countries, along with Singapore and Hong Kong, became collectively known as the Asian Tigers

Advantages of these countries for the development of manafacturing industry were:

• reasonably well developed level of infrastructure such as roads, railways and ports
• relatively well educated populations with existing skills
• cultural traditions that revere education and achievement
• good geographical location
• government support

• less rigid laws and regulations on labour, taxation and pollution than in TNCs parent countries, allowing more profitable operations

As the economies of NICs grew, large indigenous firms began to grow, helped by the economic climate and government aid. The chaebols (huge business conglomerates) of South Korea, helped by the government, were able to expand.

Second phase

• as the economies of these NICs grew, wage levels and the cost of operating within those countries began to increase
• Japanese, US and European TNCs looked for a second generation of countries that could support their operations
• such areas had improvements in both physical and human infrastructures but wage levels that were still low
• companies that had grown in the original NICs also began to move routine manafacturing tasks to their neighbours, such as Malaysia and Thailand

Third phase

In recent years, both China and India have emerged as targets for FDI by TNCs. Since 1990, both countries have shown rapid and sustained economic growth. Chinas growth is the fastest experienced by any country, at one time averaging a real percapita growth of more than 10% per year

Countries at very low levels of economic development

• 1986, poorest countries in the world have been categorised as least developed countries
• UN described them as 'the poorest and most economically weak of the developing countries, with fromidable economic, institutional and human resource problems, which are often compounded by geographical handicaps and natural man-made disasters'
• beginning of 21st century, UN recognised 50 countries in this category
• 33 in Africa, all South of the Sahara
• Others in southeast Asia and a number of small island states in the pacific

LDCs are defined by the following features:

• low incomes, measured as less then $800 GDP per capita per year averaged over a 3 year period
• human resource weaknesses, based upon indicators of nutrition, health, education levels and literacy: specifically life expectancy at birth, per capita calorie intake, combined primary and secondary school enrolment, and adult literacy rates
• economic vulnerability, shown by the low level of economic diversification, which is based on the share of manafacturing in the GDP, the share of labour force in manafacturing, annual per capita energy consumption . population displaced by natural disasters

As well as extreme poverty, many LDCs also suffer from some of the following:

• ongoing and widespread conflict
• extensive political corruption
• a lack of political and social stability
• a form of government that is authoritarian in nature, such as a dictatorship

• people live in poverty in all LDCs
• large proportion of population has an income too small to meet their basic needs
• resources in the economy, even when evenly distributed, are not enough to provide the needs of the population on a sustainable basis
• economic freedom of majority of the population is therefore seriously constrained
• 2005, estimated 277 million within LDCs living on less than $1 per day
• incidence of poverty has been falling, but a high population growth rate means that the actual number living in poverty has increased over the long term
• Sharp contrast between poverty in Asia and Africa
• much higher in Africa, 374 million Africans have an income of less than $2 a day compared with 203 million Asians
• despite some economic growth in certain LDCs, they are still very much dependent on external finance
• 2006, net aid reached the record level of $28 billion, mostly funding social infrastructure and services
• share of aid going to education, health, population programmes, water supply and sanitation was higher than in previous years

• 1970s onwards, as a result of borrowing money from banks in the developed world, developing countries found themselves in a debt crisis
• attributed the problem to increasing oil prices, high interest rates, falling export prices and problems of domestic economic management
• no hope of debts being repaid and interest accumulating on them made the chances of repayment even more remote
• made it impossible to halt socioeconomic decline
• 1996, International Monetary Fund and the World Bank produced the Heavily Indebted Poor Countries programme
• provided debt relief and low interest loans to reduce external debt repayments to sustainable levels, on condition that countries met a range of economic management and performance targets
• 2005, G8 countries proposed to cancel the entire debt only if countries met certain conditions
  • satisfactory economic performance
  • satisfactory progress in implementing a poverty reduction strategy
  • an adequate public expenditure management system that meets minimum standards for governence and transparency in the use of public resources

It is clear that LDCs have many problems apart from lack of income. In september 2000 world leaders adopted UN Millenium Declaration, which targets a broader range of human development indicators. It commits countries to a new global partnership to reduce extreme poverty and sets a number of targets with a deadline of 2015. These goals are to:

• eradicate extreme hunger and poverty
• achieve universal primary education
• promote gender equality and empower women
• reduce child mortality
• improve maternal health
• combat HIV/AIDS, malaria and other diseases
• ensure environmental sustainability
• develop a global partnership for development

A number of specific targets have been set to meet these aims in LDCs. They are:

• halving, between 1990 and 2015, the proportion of people whose income is less than $1 per day
• halving, between 1990 and 2015, the proportion of people suffering from hunger
• ensuring that, by 2015, all children are able to complete a full course of primary schooling
• eliminating gender disparity in primary and secondary education as soon as possible, but certainly no later than 2015 at all levels of education
• reducing, by two thirds, between 1990 and 2015, the under 5 mortality rate
• halving, by 2015, the proportion of people without access to safe drinking water
• halving the proportion of people without access to sanitation