Disparities in Wealth and Development Flashcards
elements of Quality of Life:
Economic: income, job security, standard of living, unemployment rate
Physical: diet (not connected with economic/income), nutrition, water supply, climate, hazards
Social: family, friends, health, education, (e.g. gender gap)
Psychological: happiness, security, freedom
Indicators of Wealth
Measurements of regional and global inequalities
GDP - Gross Domestic Product: value of goods and service produced by a country in a year
- Challenges with this indicator: high GDP ≠ Good Quality of Life, big countries like India with a high GDP look good on paper, while Norway is not. The scale differences distorts the view of Quality of Life, which is much better in Norway compared to India.
GNI - Gross national income: GDP + income received from other countries
GNI per capita: takes into account different population of countries (allows for better comparisons when the populations are vastly different)
PPP - Purchasing power parity: takes in consideration the way in which the cost of living can vary between countries
- A dollar buys much more in China than the US (“Big Mac Index”)
HDI - Human Development Index: best measure of development
- Longevity (life expectancy —> how healthy is your country)
- Adult literacy and average number of years’ schooling (social)
- Standard of living-income adjusted to local cost of living (PPP)
- Doesn’t include the Psychological and Physical aspect (but it does take Social and Economic aspect in consideration)
High levels of human development can be achieved without high incomes!
- Vietnam and Pakistan has relatively the same income levels, but Vietnam ranks higher for HDI (since Pakistan has huge gender gap in education)
- That is because Vietnam and other similar poor countries with a high HDI (Cuba, Costa Rica, Sri Lanka) deliberately devote scare resources to human development.
Gross National Happiness
- Dragon King Jigme Wangchuk of Bhutan first used the term in 1972
- Meant to be an alternative to the GDP and looks at quality of life, and social progress in light of Buddhist influences
- 9 domains (see website above) and 4 pillars: the promotion of sustainable development, preservation and promotion of cultural values, conservation of the natural environment, and establishment of good governance. (wikipedia)
Social Progress Indicator
Other indicators of Development
IMR - Infant Mortality Rate: indicates level of health care, water supply, housing, nutrition and sanitation as most fatalities are preventable - LEDCs
GDI - Gender-related development index: uses same indicators as HDI but adjusted for gender
GEM - Gender Empowerment Measure: basically same as the Gender Gap Index in terms of political participation and economic (disparity in income)
HPI: Human Poverty Index
The UNDP has calculated that the cost of eradicating poverty across the world is relatively small compared to global income — not more than 0.3% of world GDP — and that the political commitment, not financial resources, is the real obstacle to poverty eradication.
nutrition
- 815 million hungry people in developing countries
- 10 million die every year of hunger and hunger-related diseases
- ¾ of all hungry people live in rural areas, dependent on agriculture for their food
- Even though woman are the world’s primary food producers, 7/10 of the world’s hungry are women and girls
stages of development
North-South Divide (Brandt Report) (static)
1st, 2nd, 3rd World (static)
MEDC’s vs. LEDC’s (flux)
Developed and Developing (flux) + least/most developed
- NIC’s (—> the biggest NICs: Asian Tigers—BRIC (they have the biggest economies of NICs), other examples Malaysia, Chile, Taiwan, Singapore, Hong Kong, South Korea (the older the generation of Koreans, the smaller the height because of poor nutrition in the past, etc.) These countries had FDI from America, for example McDonalds, Ford etc.
development gap
Why have some countries developed faster than others?
Physical geography: landlocked, small island states, tropical countries, natural resources, hazards
Economic policies: open economies developed faster than closed, fast growing economies have high rates of saving and low relative to GDP, lack of corruption
Demography: Highest rates of growth occur where the birth rate has fallen the most
History: relationship between colonial powers and treatment of colonies (Portugal vs UK) dependency theory
marginalisation measurement
+ case study of marginalisation
Gini Coefficient: technique used to measure income inequality within a country
- Defined as a ratio with values between 0 and 1
- 0 is perfect equality whereas 1 means that one person has all the money in one country
- The common thing with countries with a high Gini coefficient is the apartheid
Denmark: 0.232 <— the closest to 0
Namibia: 0.707 <— the closest to 1
______________
Indiginous Australians
Whereas Australia as a whole ranks between Sweden and Iceland as ninth in the world for life expectancy, indigenous Australians come between the Cambodians and Sudanese at 178th. Those born Aboriginal can expect to:
- die 20 years earlier than their non-indigenous compatriots
- have IMR nearly four times higher than that of the general population
- be seven times more likely to catch meningitis
- be 10 times more likely to catch tuberculosis
An Aboriginal child is twice as likely to be born with a low birth weight and five times more likely to have a mother younger than 17. Poor housing exacerbates other problems; dusty and unhygienic surroundings mean than deaths from respiratory disease are four times more common; and deaths from heart disease and strokes are three times more common. Aborigines are 45 times more likely to become victims of domestic violence and 40% more Lillie to commit suicide.
Poverty, racism and dispossession are at the heart of the problem. This problem is well understood and could be prevented without the need of dramatic technological help.
visualisation of inequality
Lorenz Curve: shows the degree of inequality that exists between two variables
Income Disparities Within Countries
and social mobility
The gap between rich and poor has grown in most countries, though this doesn’t mean that poor people have become poorer, the opposite, poverty has been decreasing but the richer have been getting richer faster.
Social mobility tends to be higher in countries where income is distributed more evenly (it’s easier to move from poor to rich, when the equality is high) (Germany in contrast to India, where people are still born into a certain status, whereas in Germany this doesn’t happen).
While a certain degree of income inequality is useful in rewarding effort, talent and innovation, huge differences can be counter-productive and damaging for most economies.
causes of increased inequality in China
In China it is the difference between urban and rural (regional differences)
- Urban workers earn much more than rural
- Productivity is much slower in agriculture
- Widening gap between those with and without skills
- Widening gap between those with education and those without
positive and negative aspects of slums
Negative Aspects
- High concentrations of poverty, broken families, unemployment and social exclusion
- Limited access to credit and formal jobs (informal: selling drugs, prostitution etc.)
- Often an area of pollutants and noxious waste
- Poor water and increase in water bourn diseases such as cholera and typhoid
- Unsafe housing, insecure land tenure, fragile land
- Overcrowding
- Little police presence
Postive Aspects
- the first stopping point for low-income employees immigrants; low-cost and affordable housing that will enable the immigrants to save for their eventual absorption into urban society.
- 32% of the world’s urban population (1 billion) live in slums
- Most growth is occurring in slums (more in LEDC’s)
- Have a vibrant mix of different cultures frequently resulting in new forms of artistic expression. They are points of assimilation for immigrants.
- Informal entrepreneurs can work here and have clienteles extended to the rest of the city
- Informal employment, based at home, avoids commuting.
- There is a strong sense of kinship and family support.
- Crime rates are relatively low.
Case Study: Regional Contrast in Brazil
The South-East region in the economic core region of Brazil. Over time the South-East has benefited from spatial flows of labour, raw materials and capital. The region grew rapidly through the process of cumulative causation (upward spiral / positive feedback).
This process resulted significantly widened regional disparity between core and periphery.
However, more recently some regions of the periphery benefited from the tickle-down effect, though inequality remains.
The South-East’s primary, secondary, territory and quaternary industries generate large amounts of money for Brazil. The natural environment offers advantages for the development of primary industries.
- Good Climate: warm temperature, adequate rainfall and rich terra roxa soils (weathered from lava) have provided many opportunities for farming. The region is important for coffee, beef, rice, cocoa, sugarcane, rubber and fruit.
- Large deposits of iron ore, manganese and bauxite have made mining a significant industry. Gold is still mined.
- The region is energy rich, with large deposits of oil and gas offshore. Hydro-electricity power is generated from flowing over steep slopes.
- The rainforest’s temperature provides the raw material for forest.
- Fishing is important of many of the coastal settlements.
Historical Context:
The South-East had many coastal settlements.
In the 1950s and 1960s the government wanted Brazil to become a newly industrialised country. Because the South-east had the best potential of all Brazil’s five regions, investment was concentrated here. The region is the focus of the country’s road and rail networks.
However, Brazil’s government created the new capital “Brasilia” to shift the disparity of wealth, since Brasilia is located more in the middle of the country. The South-East region contains the main airports and seaports. It also has a significant pipeline network for oil and gas. More transnational corporations (TNCs) are located in the South-East than in the rest of Brazil. With the highest population density in Brazil, the labor supply is plentiful. The region also has the highest educational and skill levels in the country.
According Clark Fisher Model, Brasil cannot be generalised as one country, as the regional differences are too big. Hence, one can state that only the South-East of Brasil has reached the tertiary level, while the rest of Brasil is in the post-industrials state, being active in the primary and secondary level, and only rarely in tertiary.
common origins of disparities
Education may affect poverty in two ways:
- It may raise the incomes of those with education
- By promoting growth in the economy it may raise the incomes of those with given levels of education
- Also, those with higher education tend to have fewer children.
- Electricity is a must-have for sufficient education (light, internet, etc.)
Land ownership (tenure)
- The distribution of land ownership
- In Brazil, 44% of all arable land is owned by just 1% of the nation’s farmers
- Land reform is the process of breaking up the large estates and redistributing it so that the endless poor can benefit as well.
Case Study: Brazil Tenure Issue
The demonstrations in the capital is an effort by the MST (Landless Rural Workers Movement) to put pressure on the government to distribute land within the next six months to at least 90,000 families who have been quoting in different parts of the country since 2003, many of them camping by the roadside. People in the Terra Libre settlement are all too familiar with this situation.
The State has not legalised their ownership of the land where they have lived “on a temporary basis” for over a decade with endless battles over inheritance and compensation for expropriation in the courts.
Terra Libre occupies 460 hectares of an old state, which was deemed unproductive according to official criteria set out in the law on agrarian reform. The problem is that until they have legal title to the land, the settlers do not have access to credits and tools from INCRA.
The distribution of land in terms of ownership has been a divisive issue since the colonial era. Then the moronity rewarded those in special favour with huge tracts of land, leaving a legacy of highly concentrated ownership. 44% if all arable land in Brazil is owned by just 1% of the nation’s farmers, while 15 million peasants own little or no land. Land reform is a partial solution, which involves breaking up large estates and redistributing land to the rural landless. Although successive governments have vowed to tackle the problem, progress has been limited due to the economic and political power of the big fazenda or farm-owners.
In the mid-1990s land reform clearly emerged as Brazil’s leading social problem, highlighted by a number of widely publicised squatter invasion. Such land occupations have occurred in both remote regions and established, prosperous farmlands in the South and South-East. Each year, the MTS organises a series of land invasions, takeovers of buildings and other protests. The purpose is to A. keep the issue high on the national political agenda, and B. to commemorate the killing eleven years ago of 19 landless protestors by police in the state of Para.
While the MTS does make process, the success is little because they only invaded “bad” land. Farmers cannot grow a lot on this land.
trends in education
Since 1999 the number of children not attending school has fallen by 33 million.
Sub-Sahara Africa has increased enrolment at five times the rate achieved in the 1990s, with countries such as Benin and Mozambique registering rapid advances. In developing countries and western Asia the number of children out of school has more than halved, partly through policies aimed at getting more girls into school. In India, the number of children not in school fell by almost 15 million in just two years, from 2001 to 2003. The gender gap, in that aspect, has also narrowed. However, it varies strongly between countries:
Being born into a poor household significantly raises the risk of deprivation. In the Philippines there is a four-year education gap between the richest and poorest households. The gap in India is seven years.
Disparities within countries are often bigger than disparities between countries.
theories of development
Modernisation Theory — Rostow’s Model of Development
Uses the economic history of a number of developed countries to explain a countries current level of development
Recognises five stages of development that all countries go through
Capitalism is fundamental to economic development
Distinct economic and social changes are required for a country to move from one stage to another
‘take off’ stage is the most crucial, characterized by:
- A rise in the rate of productive investment to over 10% of national income
- Development of one or more substantial manufacturing sectors
- Administrative systems that encourage growth
