- Liberal theory, where capitalism is believed essential in creating wealth.
- Development occurs when preconditions are met - e.g. transport, infrastructure
- Industrialisation follows, creating jobs
- each country is in one of these five stages of development. With MDC’s in stage 4 or 5, whereas LDCs are in one of the three earlier stages
- Criticism - many countries have borrowed heavily and invested money into projects to meet preconditions - failed to develop - ending up in debt
In Southeast Asia, a group of countries, Singapore, Taiwan, South Korea, and the former British colony of Hong Kong came to be known as the “four dragons” after adopting the international trade approach. They were lacking in natural resources so they promoted development by concentrating on producing a handful of manufactured goods,especially clothing and electronics. Low labor costs enabled these countries to sell products inexpensively in MDCs.
The countries of the Arabian Peninsula, which includes Saudi Arabia, Kuwait, Bahrain, Oman, and the United Arab Emirates, went from LDC’s to some of the wealthiest countries almost overnight due to increased petroleum prices during the 1970’s. Arabian Peninsula countries have used petroleum revenues to finance large-scale projects, such as housing, highways, airports, universities, and telecommunications networks.
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