Disparities in Wealth and Development

Notes on unit 2, Disparities in Wealth and Development

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Measuring development/ inequality

HDI: composite measure of development. Includes longevity (life expectancy). Adult literacy and average number of years in school. Standard of living - income adjusted to local cost of living - purchasing power parity. Norway has a score of 0.971, Canada/ Ireland have scores of 0.965. Sierra Leone has the lowest score of 0.365. However, HDI doesn't give indication of the rich/ poor divide through the GNI. Doesn't include factors such as people living below poverty line - assessment criteria too narrow. Longevity doesn't include quality of life as in how healthy a person was during their lifetime. They only take averages of the entire country and doesn't illustrate the disparity within the country. High levels of development can exist without high incomes. 

CIS: Commonwealth of Independent States, made up of the former Soviet republics. The CIS has been going through a long, painful transition from communist to market economies.

Poor African countries whose development have been hindered or reversed for a variety of reasons. 

Case study: Over the past 25 years, the existing inequalities between black and white peoplehey have assets worth $100 000 vs assets of $5 000. The richest 1% of the population own 40% of its wealth.

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Measures of development

Gender-related index (GDI) - measures achievements in the same dimensions and using the same indicators as the HDI, but examines the inequalities between men and women. It is just the HDI adjusted for gender inequality.

Gender empowerment measure - reveals whether women can take active part in economic and political life. It exposes inequality in opportunities in selected areas. It focuses on participation, measuring gender inequality in key areas of economic and political decision-making. It tracks the percentages of women in parliament, among legislators, and professional workers. Norway is first and Yemen last. 

Education Index: the HD report in 2009 provides an index of education. This varies from a minimum of 0.0 to 1.0. This is based on adult literacy rate, and the combined enrolment for primary, secondary and tertiary schools. Adult literacy is defined as the proportion of the adult population (>15) who can reasde and write a short, simple statement on everyday life. 

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Definitions

Core and periphery: The concept of a developed core surrounded by an undeveloped periphery. The concept can be applied at various scales.

Gross national income: The total value of goods and services produced within a country, together with the balance of income and payments from or to other countries. 

Starvation: limited/ non-existent food intake.

Deficiency diseases: lack of specific vitamins/ minerals.

Kwashiorkor: Lack of protein

Marasmus: lack of calories/ energy food.

Goitre: lack of iodine.

Obesity: too much energy/ protein.

Malnutrition: poor nutrition. Can be over/ under-nutrition.

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Case study: Australian aborigines

Belonging to a race can disadvantage a person. Ninga Mia is an Aboriginal shanty town in the shadow of one of the world's biggest gold mines. A third of the houses lack bathrooms and toilet. Those that do have are overcrowded/ unsanitary. A house the size of a bedsit is a home for six/ seven people. Australia ranks between Sweden/ Iceland in HDI, there is internal disparity between Australians and aborigines. The aborigines life expectancy is between Cambodians and Sudanese. Aborigines can expect to die: 20 years earlier. Have an IMR x4 higher. Be x7 more likely to catch meningitis. Be x10 more likely to catch tuberculosis. 

Aboriginal child is twice as likely to be born underweight and x5 more likely to have a mother under 17. Poor housing exacerbates other problems - dustry/ unhygienic surroundings = deaths from respiratory diseases. Aborigines are x45 more likely to become victims of domestic violence and 40% more likely to commit suicide. 

Poverty, racism, dispossession are at the heart of the problem. The tragedy of the Aboriginal ill health is that its causes are well understood and are preventable, without the need for technological breakthroughs, but there is an apathy/ active discrimination on the part of the government. 

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Case study: Income inequality in Asia

Growth with equality was the philosophy of the Asian tiger economies. They combined economic growth with relatively low income inequality, spreading the economic gains. More recently, Asian economies have enjoyed the world's fastest growth, but the rich are now growing richer faster than the poor. According to the ADB, over the past decade or so, 15 of the 21 countries studed have seen income inequality. The biggest increases in inequality were China, Nepal and Cambodia. 

Asian tiger economies: four economies (Hong Kong, Singapore, South Korea and Taiwan) that were the first NICs and were associated with very high growth rates and industrialisation between the 60s and 90s. 

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The UN Millennium development goals

1) Eradicate extreme poverty and hunger

2) Achieve universal primary education.

3) Promote gender equality and empower women. 

4) Reduce child mortality rates

5) Improve maternal health.

6) Combat HIV/ AIDS and malaria. 

7) Ensure environmental sustainability.

The target to achieve these goals were by 2015. 

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Case study: Progress towards MDG in Mali/ India.

It is possible to accomplish the MDGs, even if not by 2015. Mali is landlocked, straddling the Sahel and the Sahara desert. Mali's government led by Amadou Touré, devotes most of its limited resources to the struggle against poverty. Mali has qualities for America's Millennium Challenge account, which will bring $450m to the country - compared to annual $1.5 bn budget. Mali's government made agriculture and infrastructure a priority. The government wants to raise growth to lift people out of poverty (rather than aid). With mechanisation, the country's 4 million farmers became self-supporting, growing much more than the traditional crop of cotton. Irrigation is most important due to being landlocked in a desert. Around Timbuktu, the villagers have been shown how to build irrigation canals. 

In 1980, the UN proclaimed to be the sanitation decade. The Indian government set about improving sanitation within villages where peopel still defacated in the rivers (Ganges). The solution was a toilet with a brick cubicle, squatting slap and 2 pits. The government set its budget and the building began. However, as the only concrete structure in many homes, the toilets were often used for storing grain, keeping hens or displaying deities. In the late 80s, the UN realised they needed to increase demand for this. 

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Definitions

Remittances: the transfer of money and/ or goods by foreign workers to their home countries.

Fair/ Ethical trade: trade that attempts to be socially, economically or environmentally responsible. It is trade in which companies take responsibility for the wider impact of their business. Ethical trading is an attempt to address failings of the global trading system. 

Export processing zones: labour-intensive manufacturing centres that involve the import of raw materials and the export of factory products.

Free trade zones: zones in which manufacturing does not have to take place in order to gain trading privileges, such zones have become more characterised by retailing. 

Trading bloc: An arrangement among a group of nations to allow free trade between member countries but to impose tariffs on other countries wishing to trade with them e.g. EU, NAFTA. 

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Incheon free economic zone, South Korea

South Korea's national government started the northeast Asian countries business hub in April 2002. Free economic zones were created to attract direct foreign investment. Incheon is one of these special economic zones with minimised regulation. 

The FES is the special area where compared to the rest of Korea exceptional measures such as tax breaks and other incentives exist to attract foreign-investment from firms and expand foreign exchange circulation. 

Incheon is located between China and Japan, thus acts as an "economic hub in northeast Asia". 

Advantages: Incheon is coastal with an internationally competitive seaport and airport that is the main entry point to Korea. 2 bn people and 61 cities, each with over 1m people live within 3.5 hours from Incheon. Incheon is adjacent to Seoul, so has a well-qualified workforce. 

Disadvantages: Some of the incentives offered in the free economic zones may lead to expensive foreign schools in the IFEZ, widening the gap between rich/ poor. Also, tension may be created between North and South Korea, and there may be threat of a second war, following North Korea's nuclear experimentation in 2006/ 9. 

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Comments

Sofia

awesome 

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