Define the term development gap
The development gap is the disparity of income and quality of life between the rich and poor countries
Different methods to measure the development gap:
- GDP (gross domestic product)
- HDI (human development index)
- MDG (millenium development goals)
- GNI (gross national income)
4 theories of development
1. Modernisation Theory- W. Rostow- 5 stage development path. Countries go up the tier. British empire were the first to go through the industrial era in 1945.
2. Dependency Theory- A. G. Frank- under developed periphery and developed core(superpower). The developed periphery exploits the core's raw materials and makes them into manufactured goods and keeps them in under development
3. World systems theory- Wallerstein- 3 tiered world and the country/nation can move up and down the tiers (unlike modernisation theory, it is more developed)
4. The role of debt theory- under developed countries trapped in a cycle of debt
Global Players Affecting the Gap
Those that aim to reduce the development gap: UN (through its various agencies such as the IMF and world bank), WTO & BINGO's e.g. oxfam
Those that aim to maintain the development gap:TNC's and superpowers (usually with 'strings attached')
- Key role in working economy
- at the moment countries that export manufactured goods are suffering from declining terms of trade- often in LEDC's.
- this is because it leads to an increase in poverty- likely to widen the gap as superior countries sustain superior wealth of developing countries.
AN EXAMPLE OF GLOBAL TRADE PATTERNS OF PRIMARY PRODUCTS:
- coffee is grown mainly in tropical areas of Latin America, Asia and Africa. its main markets are of high income e.g. Europe. the coffee industry supply chain involves growers, middlemen, exporters, importers and retailers before the product reaches the consumer.
traditionally global trade flows have been between North and the developing South exporting primary products.
Needs to be a trade balance, as a trade deficit (the country exceeds imports rather than exports) can lead into a debt trap that stops economic growth
Consequences of gap for people in LEDCs
- trapped in a cycle of poverty, in remote rural areas
- members of low castes e.g. the Dalits are trapped in a social system= discrimination stops them from having the best jobs, services and education.
- women in developing countries are discriminated against- so men are paid more and get the better jobs.
Increase of poverty in developing megacities
Megacities have a population of over 10 million
- rural to urban migration increasing
- early stages of their growth poverty is turned into urban slums and shanty towns.
- high levels of inequality between rich and poor.
demand for housing topples over supply- causes costs of housing to rise above the earning power of those.
classify the megacities of developing world:
- immature- Lagos, much informal trading, environmental pollution, poverty and hard to goven
- consolidating-Nairobi, some upgrading of slums, employment growing, still high levels of pollution
- maturing- Mumbai, upgrading of services, pollution is tackled.
Poverty in Lagos- Urban poor
- 2/3 of population live below poverty line
- The city was built to accommodate fewer than 100,000 residents but it is now home to about 14 million
- Young boys are often left to sell whatever they can find – toilet brushes, cutting shears, smoked fish, hankies and inflatable gloves
- 200 slums
- There are no official deeds or titles for many of these communities, instead they are run by a council of elders who decide who can build there and at what price
- The average Nigerian lives on less than $2 a day
Bangkok and Nairobi are both urban poor cities and in an immature developing stage
Consequences of gap for ethnic groups
- Women in subsaharan Africa rarely get to complete school, many work on subsitence jobs like walking miles barefoot for water. This leads to the disadvantages, early marriages and having children when young.
- Racial groups in South Africa under apartheid. Blacks and coloured had limited rights and political- apartheid became law in 1950 (whites weren't allowed to marry other races) finally ended in 1994 (Mandela released in 1990)
- Low castes and untouchables- in India the lowest caste have restricted access to services and education
- Religion- Tibetans in China have few rights to practice their religion as there a no political rights
BRICS make their way accross the development gap
- rising incomes
- new projects to extend infrastructure
- improved services & education
- improved technology
- increasing levels of pollution due to industrialisation
- increasing reliance on TNC's
- increasing pressure on resources
Theories attempt to reduce gap
- Modernisation- in time developing countries can follow the path of the industrialised ones.
- Neo-liberalism- focuses on gloablisation. Notices the bridge has already been crossed by NIC's and being bridged by the BRICS
- Marxism- only government action that can close the gap
- Populism- the opposite of ^^^^ its a bottom up approach
- Post-development- sustainable, small scale development
Aid strategies to reduce the gap
- Top down aid- the donor country transfers resources either to a multilateral aid organisation such as the UN or directly through the government of the receiving country. E.g. grants, loans, weapons and technology. HOWEVER this aid is often tied with 'strings attached' so the aid does not always meet the poorest people and most deserving areas. ALSO the IMF and World Bank can sometimes impede development (Uganda SAPS). E.G. PERGAU DAM IN 1994
- Bottom up aid- this is the route favoured by many NGO's such as red cross as it helps the most needy and usually small scale local projects. E.G. Kerala reading festival UNICEF wanted to develop language and learning skills for 198 schools in India.
a criticism of both forms of aid is that does it really help a country to stand on its own two feet?
Trade strategies to reduce the gap
Neo liberalism argues that it helps poor countries develop. An opposite view is that it widens the gap. This is because the terms of trade favour the more developed countries.
The fair trade movement started in the 1960's and stands as an example of the way global trade should be conducted.
E.G. THE GUMUTINDO COFFEE FAIR TRADE in Uganda
Unlike aid, investment expects financial return. TNC's are the main players in this. the countries in which they invest in benefit in small ways e.g. jobs but no where near the benefits of the investor. in conclusion investment is not contributing much to narrowing the development gap.
Future scenarios for development gap
Indicators such as MDG's by the UN weren't all met by 2015 so now are called the 'sustainable development goals' SDG's
following actions to be considered?
- debt cancellation-wiping poor countries slates clean
- tourism- many countries have the resources to attract tourists- scenery & biodiversity
- technology- spread of ICT, bottom up approach
- legal rights
- co-operation in the South
none of these provide an ultimate solution but together they bring about closure of the gap.
Trading in commodities
Uganda went independent from Britain in 1962, its economy was strong, it exported commodities (sugar, tea, coffee and bananas) to the developed world. BUT the rise of Idi Amin in 1970's saw it all collapse and led the country into severe debt. The IMF agreed to lend Uganda money but on structural adjustment (so cuts in Gov spending and privatisation)
The structural adjustment programme had several impacts on Uganda:
- cuts in gov spending hit education and health care badly- the Gov introduced charges for schooling and health care just as HIV/aids impacts were increasing
- problems for Uganda's farmers, individual farmers could not export at their own preference
- gov cut costs in workforce left Uganda with massive unemplyment levels
However the IMF holds this as a success story because the percentage of those living in poverty reduced from 56% to 31% over 10 years