Development Case Studies

• Steadily increasing population (from 1.6 million in 1960 to 5.4 million in 2013)
• High population density
• Urbanisation economy
• Population has become far more educated (Confucion values)
• Independent from Malaysia in 1965 (disaster as it had no industry or infrastructure, and a British military base closed which employed 1/6th of the population)
• Chinese revolution scared TNCs away from China, Taiwan and Hong Kong
• Singapore welcomed TNCs with low taxes, cheap wages, a large skilled workforce and vocationally-focused education
• 1968 laws restriced employees right to strike, and the government encouraged companies to sack their entire workforce, and then reemploy everyone but troublemakers
• Lee Kuan Yew was president, and introduced new policies to grow singapore economically
• Gave people a crash course in business and put them in charge of companies set up by the government, and threatened them with closure if they didn't succeed e.g. Singapore Airlines
• Mixture between Eastern and Western culture

• Nearly 10 million km2
• Capital city = Beijing
• Mao created People's Republic of China in 1949
• Deng initiated modernisation of China in 1977
• GDP per capita = $7,000
• Literacy rate = 95%

REASONS FOR RISE:

• One child policy
• Rural household responsibility (farmers allowed to sell surplus goods)
• Tourism (more accessible, Olympics, famous landmarks)
• SEZs (5, special tax incentives for foreign investors & independence on international trade activities)

BENEFITS OF RISE:

• Decrease in poverty
• Increase in standard of living and quality of life
• Better infrastructure (e.g. 3 Gorges Dam)
• Increased globalisation

DRAWBACKS OF RISE:

• Split into two political systems (modernist and socialist) causes internal conflict
• Huge disparity between rich and poor
• Increased dependency ration (1-2-4 family)
• Gender imbalance (60% male)

• 3 million km2
• Capital city = New Delhi
• Became independent from UK in 1947

WHY COMPANIES OUTSOURCE TO INDIA:

• Low cost, high quality (40% of what it would cost in USA)
• 2nd largest English-speaking manpower resource in the world
• World class infrastructure
• Stable democratic environment

BANGALORE:

• Many TNCs (IBM, Accenture etc. )
• Rural-urban migration (population has risen to 10 million people)
• Government struggling to keep up with growing demand for infrastructure (new airport with 2-3x the capacity of old one built in 2008, new billion dollar metro system will carry 1 million passengers per day)
• Globally competitive wage ($10,000-20,000)
• Multiplier effect (for every outsourcing job, 4 more are created)
• Government tried to decrease influence of caste system (more power to land workers vs land owners)
• Competition between cities trying to become specialist
• New privately funded toll road
• Developments may benefit TNCs more than locals
• 13,000 millionaires
• New middle class
• Rising house prices ($300,000 for 2 bedroom apartment in city centre)

CHARACTERISTICS:

• Lowest HDI in world (0.337)
• 0.02 physicians per 1,000 population (2.77 in Uk)
• Literacy = 28.7%
• Agriculture provides 1/3rd GDP and livlihoods for 9/10ths of population
• 63% live below poverty line
• $1.556 billion external debt

CAUSES OF POVERTY:

• Food insecurity and drought
• Landlocked location
• 80% of land is the Sahara desert
• Political instability (coup in 2010)
• Dependent on external factors (uranium market, rainfall, donor financing - 1/2 the governements budget comes from aid)
• Poor infrastructure
• Inadequate health and education systems

• 23,000 locations in 65 countries
• CEO, President and Chairman = Howard Schultz (sold to him in 1987)
• Annual revenue = $15 billion
• Employees = 160,000
• 1st shop opened in Seattle in 1971
• Share price has risen steadily over past 20 years, except for in 2008 (global financial crash, 771 shops closed)
• Sources coffe beans from Latin America, Africa and Asia
• Most manufacturing in USA (one roasting plant in Netherlands) as it requires a skilled workforce
• Fordism has been implemented as the roasting process is highly automated and segemented
• Customer care outsourced to company called Sitel in New Mexico

POSITIVES:

• FairTrade (biggest buyer of FairTrade coffee in the world, with 95% ethically sourced overall)
• Reusable tumblers reduce waste
• Partners and customers contributed over 600,000 hours of volunteering in 2013
• Starbucks Foundation distributes grants to non-profit organisations ($8.7 million in 2013)
• Creates jobs with a low turnover rate of 9%

NEGATIVES:

• Out-competes local stores
• Use 2.3 billion paper cups per year
• Doesn't always benefit host countries - tax avoidance schemes (hasn't paid corporation tax since 2009)

• Mexico - Fordism
• USA - Post-Fordism
• Established in 1945
• Controls 30% of US guitar market (worth $700 million a year)
• Uses Maquiladoras

MAQUILADORAS:

• 2,700 in Mexico - up 15% from last year, and emplyees up 26%
• 810 employees at Fender factory
• Low 5% turnover rate compared to 70-100% at others such as Sony and Hyundai
• $60 per week salary, high for a maquiladora, plus free medical and day care, an athletic programme, subsidised housing and low-cost loans