Issues in Caribbean Development Flashcards
Concepts and Indicators of Development
Concepts of Development- the definition of development is complex, but is generally accepted to mean improving the standard of living and quality of life of a country’s people. It is related to economic, political, environmental and social factors and there are many variables that affect a country’s level of development. Government development policies aim to increase prosperity, lower the level of poverty and improve the economic and social situation of its people. It is a reflection of how a country’s resources can be used to meet basic needs. There is a wide difference in levels of development in different regions of the world, and within regions. Less economically developed countries (LEDCs) have a lower standard of living and their people have a lower life expectancy, less education and lower incomes.
Economic Development
Economic development focuses on the economic growth of a country. An economy is healthy when there is an increase in the value of goods and services produced by that country. The focus is on capital investment with jobs and technology improving production and productivity. This leads to wealth and savings. The main measure of economic health is the GDP earned from goods and services produced by a country in one year divided by the total population for that country in that year. It can be used to compare the wealth of countries and to give an idea of the average income of its inhabitants.
The Caribbean’s Place in the World Market Economy
There is an argument that industrial development by MEDCs, such as the USA, Japan and those in Europe, has led to LEDCs, such as countries in the Caribbean, becoming weaker members of the world market economy. This is because over time the Caribbean has been able to purchase fewer manufactured goods due to the lower relative value of its exports compared to those of the developed world. In response to this, there has been the relatively successful establishment of import substitution industries by small local and regional markets within the Caribbean- for example, salad vegetable farming, chicken processing, ice cream manufacturing etc.
A Growth Sector: Tourism
Since 2009 the Caribbean region tourism sector has been recording measurable growth (flights increasing to Dom Rep and Jam). Outstanding quality in tourism products, as well as health and hygiene improvements, a good safety and security record, a favourable business environment, quality human resources and tourism-related infrastructure, have attracted growth. The expansion of seaports and increases in tourist flights and hotel room countries. However, overdependence on tourism is also a weakness. Much of the profit from Caribbean tourism is earned by corporations outside the Caribbean. As a consequence, researchers describe this phenomenon as neo-colonialism.
The Impact of Recession
The most recent worldwide recession was 2008-09 and this has a big effect on most Caribbean countries as a result of close ties with, especially, the US and UK for tourism, investment and remittances.
Recession is characterized by the following:
- a rise in unemployment rates as companies try to cut costs
-anti-competitive mergers and bankruptcies
-a credit crunch, or a shortage of money for banks to lend people
This the results in low investment, business profits and sales. Workers have a wage freeze and there is no new hiring or promotions. With lay-offs, there is a reduction in household income and savings and extravagant spending is limited.
Possible Causes of a Recession in the Caribbean
-Problems that have impacted on tourism, business services and wholesaling: in the 1980s the Barbados dollar was strong and this reduced the number of tourists from the UK. In 2000 The Bahamas was blacklisted in order to combat money laundering, hampering affected everyone.
-Inflation: this occurs when there is a gradual increase in the price of goods and services due to increased production costs, higher energy costs or national dept. Consumers may seek government control on the increase of food prices.
-Disastrous floods or other natural disasters: an example is the flood in Guyana in 2005.
Ways to stimulate Growth and Economic Recovery
-Examine the sources of reduction in output and implement counter measures. Examples of this would be to identify which sector is involved, such as tourism, and explore remedies, such as alternative tourists markets, or to diversify from the main exports to the higher value goods.
-Implement lower interest rates to increase the money supply so that consumers can have money to spend on goods and services.
-Increase government spending on poverty reduction, thus creating a multiplier effect and reducing extreme poverty.
Sustainable Development
Is the planned and balanced development of a society’s resources to provide for itself without compromising the ability of future generations to meet their needs. This is important because as resource consumption increases it puts pressure on the Earth’s environment. Healthy air quality and safe drinking water are essential resources, but if accelerated production contaminates a country’s water, erodes the soil or destroys the coral ecosystem then the future economic prosperity of that country may be damaged.
Sustainable development means not doing anything today which will adversely affect the future (Energy sources, education, global warming, health)
Human Development
From the 1990s there was a shift away from thinking about development purely in terms of economic growth, and towards new ways of describing development. The Human Development Paradigm was a new approach that looked at economic and sustainable development together and, importantly, put people at the centre of the discussion. It drew on ideas of social justice and identified four essential components, or pillars, required for human development, Equity, Productivity, Empowerment and Sustainability. By adopting these principles, economic growth would be reflected in improved living conditions, education and healthcare.
What is Poverty
Poverty is when individual do not have the basic requirements necessary for a good quality of life. Combating poverty is therefore necessary for human development to be achieved. These requirements would include food, clothing, water, shelter, employment, health, education, social services. In Barbados, for example, the government housing areas and some rural communities are isolated communities of poverty. The ‘poverty line’ is the minimum level of income deemed adequate for a person to live on in a particular country.
Ways of Combating Poverty
-creating more licensed venders in the tourism sector, allowing them to sell directly to tourists in order to earn income. This also enables more people to share in the direct profits of one of the main economic. activities of the region
-obtaining aid from aid agencies.
-positive government action, such as providing subsidesed housing and reducing taxation on low-income earners.
Poverty as a Global Issue
The United Nation’s Human Development Report of 2014 speaks of the progress towards alleviating poverty as limited. It can be argued that this is mainly because local leaders have not redirected enough funds to address the issues surrounding poverty and lack the will to do so. In addition, the richer MEDCs, who can afford to, are not willing to share enough of their wealth with the poorer nations, including the Caribbean. The proponents of this point of view would argue that, rather than place tariffs on imports from the Caribbean to protect their own industries, the MEDCs could help by buying more Caribbean products.
Other Factors Affecting Human Development
Education and Adult literacy- the adult literacy rate is the percentage of adults who can read and write. Literacy affects a person’s independence and therefore their empowerment. A well-educated population tends to result in higher entrepreneurship activity. High rates of illiteracy reflect a shortage of schools and trained teachers. Uneducated parents are more likely to not vaccinate their family against diseases or provide sanitation, basic healthcare and nutritious food preparation.
Life Expectancy at Birth (LEB)- refers to the average number of years that a new-born baby can expect to live. It is a reflection of the level of development and affluence of a place, and is directly affected by the quality of maternal health. It will also depend on the health facilities available, personal health habits, occupation and nutritional levels.
Self-Esteem- of a people and society is attached to how they view their value and role in the world. Others’ views of the society can also shape this, but it should not be the only measure.
Indicators and Measurements of Development
Gross Domestic Product (GDP) - is a measurement of a country’s total national income, or the value of its goods in production and the services provided by it for a year, no matter the ownership. It is calculated from government figures, although these cannot report certain areas of income, such as income from the informal sector or the black market. It does not take into account taxes or subsidies and can hide inequalities in income.
Gross National Product (GNP)
Included in GNP is money in the form of investments or remittances from overseas. Remittances to Caribbean countries from friends and family abroad have been on the rise from 2000, but they can be difficult to measure. Also included in GNP is money sent back from companies or properties that are located overseas but owned by locals. It includes the money made in the country by foreign people and businesses. The GNP does not account for sources of income such as the shadow economy (black market). Wealthy citizens have been known to lodge their profits abroad so their income is not fully captured in the GNP. It is a measure of economic growth only, does not include factors such as non-market activities, pollution, resource depletion and environmental degradation.
