Module 3 Flashcards
The Spread of Development
Development often occurs to specific locations. These developments grow by attracting investment, people and new economic opportunities. Government may try to spread development, for some of the following reasons:
(i)Economic- reducing unemployment, raising productivity, more efficient use of resources
(ii)Social- increasing standards of living, slowing migration, reducing regional inequalities
(iii)Political- attempting to win votes before an election
(iv) Strategic- important in times of military conflict and threats to national security
(v) Environmental concerns- dereliction, blight and contamination
Attempts to spread development vary with the type of development. For example, economic development is frequently associated with industrialisation, while human development may be more affected by the provision of clean water or an education system.
Development is often associated with a change in a country’s employment structure, from largely rural and agricultural to urban and industrial. However, these stages of growth do not indicate how the growth occurs.
Causes of Disparities in the Caribbean
There is clear evidence that shows that the present patterns of development is strongly based on the region’s history. However, there are other factors that have also played a role:
1) Resource Endowment: resource availability (natural and human) is often critical in the development process of regions. Regional disparities occur because some areas have little or no resource base upon which to promote development activities.
Such regions are generally sparsely populated with little investment, poor infrastructure and few employment opportunities relative to other areas in the country or region.
Within the Caribbean region, locations with large populations and well-developed social and economic infrastructure include those that have mineral (petroleum in San Fernando, Trinidad, bauxite in Linden, Guyana and Mandeville, Jamaica). The
presence of sandy beaches and clear ‘blue’ waters, as a major resource, along the coasts of many Caribbean countries has also led to the citing of tourism facilities,
which in turn, have also strongly influenced the coastal orientation of the populations of these countries.
2) Geographical Factors: spatial development is also strongly affected by factors such as soils, topography, vegetation and climate. In some countries of the Caribbean, vast areas are underdeveloped because of the presence of steep mountain slopes which
make transport networks development difficult and expensive, poor soil which are unsuitable for food production, swamps and dense forests, as in the case of Guyana and Belize, which prove unattractive for investment and population movement.
Thus, in Guyana, large portions of the hinterland remain poorly inhabited and undeveloped while the coast (low-lying and easily accessible) is relatively
developed.
3) Economic Factors: regions within countries differ in their levels of development, depending on the nature of their economies and the stage of development. For
example, countries or areas which have a diversified economy, have the potential to be much “better off” that those who are less diversified economy, as it prevents the major commodity (source of income generation and employment) to decline in
terms of trading of the commodity (leading to an economic decline).
Investment is also an important economic factor in spatial development, as it tends to generate
income and employment. Countries or regions that are able to attract investment tend to be “better off” than those that attract limited resources.
4) Governments policies: Due to differences in availability of resources and constraints. The extent to which these constraints affect development largely depends on the efforts made by the national government to convert these into opportunities.
Consequences of Disparities in the Caribbean
1) Disparities lead to over- concentration of population and resources in some areas at the expense of others. This is particularly so in most Caribbean countries where infrastructure development, population and socioeconomic opportunities concentrate in the major urban centres.
This tends to perpetuate rural-urban migration, which gives rise to a number of adverse effects such as urban pollution, crime, slum development and traffic congestion among others.
2) Disparities lead to underdevelopment and marginalisation of some areas in the Caribbean region. In many of the peripheral rural areas, migration has stagnated population growth rates and altered the age-sex distribution making it uneconomical to provide services to some communities.
3) Perpetuation of regional disparities undermines national/regional development as it allows that utilization of resources in some areas to be either unutilized or underutilized.
4) Disparities prevent equity in development, often leading to political discontent among people from underdeveloped regions.
What is poverty?
It can be defined as a condition in which a person or community is deprived of, or lacks the essentials for a minimum standard of well-being and life.
In purely economic terms, income poverty is when a family’s income fails to meet a federally established threshold that differs across countries.
Typically it is measured with respect to families and not the individual and is adjusted for the number of persons in a family.
Economists often seek to identify the families whose economic position falls below some minimally acceptance level. The international standard of extreme poverty is set to the possession of less than US$1 a day.
Absolute Poverty
Absolute poverty measures poverty in relation to the amount of money necessary to meet basic needs such as food, clothing, and shelter.
It is usually defined as affecting people living on less than US $1 a day and is used when considering the Human Poverty Index (HPI)
The concept of absolute poverty defers from relative poverty as it is not concerned with broader quality of life issues or with the overall level of inequality in society.
The concept therefore fails to recognise that individuals have important social and cultural needs.
It refers to a set standard that is consistent over time and between countries. For example, one absolute measurement of poverty would be the percentage of the population eating less food that is required to sustain the human body (approx. 200-2500 calories a day for adults)
Relative (Normative) Poverty
Relative poverty defines poverty in relation to the economic status of other members of the society: people are poor if they fall below prevailing standards of living in a given societal context.
To further develop the definition of the concept of
relative poverty or relative deprivation, three perspectives are relevant:
i. the income perspective indicates that a person is poor only if his or her income is below the country’s poverty line (defined in terms of having
income sufficient for a specified amount of food)
ii. the basic needs perspective goes beyond the income perspective to include the need for the provision by a community of the basic social services
necessary to prevent individuals from falling into poverty
iii. The capability (or empowerment) perspective suggests that poverty signify a
lack of some basic capability to function
The Human Poverty Index (HPI)
This was introduced in 1997 to measure different dimensions of deprivation (the proportion of people in the country who are excluded from progress).
As an aggregate measure, the HPI focuses on the prevalence of poverty in a country and concentrates on three essential elements of human life that are part of the HDI.
The difference between the HDI and HPI is that while the HDI measures progress in a country as a whole, the HPI highlights the extent of deprivation.
There are two sets of measurements used to calculate the HPI:
1. HPI-1 is used for developing countries and the following measures are used in the calculation:
- % of people not expected to survive to the age of 40
- % of adults who are illiterate
- % of people without access to safe water
- % of people without access to health services
- % of moderately or severely underweight children under 5
- HPI-2 is used for developed countries and the following measures are used in
the calculation:
- % of people not expected to survive to the age of 60
- % of people functionally illiterate
- % of people living below the income poverty line set at 50% of the median disposable personal income
- Rate of long-term unemployment (12 months or more)
How development occurs
There are three broad ways in which development occurs:
i. Natural- under free market conditions, countries exploit their resources and base their growth on their advantages (e.g. MDCs)
ii. Forced- in socialist countries like North Korea, the government controls all the resources and dictates the type and place of growth that it wants
iii. Planned- Newly Industrialising Countries (NICs) like South Korea have progresses from using import substitution industries, which reduce debt, into
developing export oriented industries which gain valuable currency.
Where development occurs
While the three ways indicate how a country develops, it fails to show which regions prosper and which fail. Regional inequalities develop overtime due to economic forces.
Initially, development takes place in particular places, due to comparative advantages, such as natural resources, location or labour supply, which stimulates
industrial growth. In turn, multiplier effects occur.
Acquired advantages, such as improvements in infrastructure and a skilled workforce, reinforce the area’s reputation and attract further investment. This
ensures that the region grows and stays ahead.
Spatial interaction increases, meaning that skilled workers, investment and new developments move to the growing area, the core.
By contrast, the peripheral areas are flooded by manufactured goods from the core (known as the backwash effect). This prevents the development of manufacturing in the periphery.
The spread effect occurs when the core stimulates surrounding areas to develop to meet consumer demand.
These ideas have been used extensively in planning. Places or districts which are favoured by reason of location, resources, labour or market access are economically more attractive.
Consequently, they are developed by planners to form natural growth poles, from which development can spread and these expand faster than other districts.
Generally, these are urban-industrial complexes which have good transport and accessibility.
Development and Underdevelopment
Some theories suggest that the way in which Europe and North America developed is the ‘ right’ way and that developing countries should copy them.
More recent theories, including the dependency theory, show that MDCs may, in fact, be the cause of underdevelopment in many LDCs.
Clark’s sector model is the most basic of the development models. It describes how MDCs have changed from agricultural societies to industrial and post-industrial societies.
Change occurs because success in one sector produces a surplus revenue. This revenue is then invested in new industries and technologies, thereby increasing the range of industries in any area.
The main weakness of this model is that it is descriptive and only a crude level of analysis. It does not say how or why the country developed nor does it show regional variations within it.
Colonialism and Development
From the mid-15th century onwards, Europeans countries began to explore and expand into the rest of the world.
Three main motives for this expansion are:
i. Explorative motive- the desire to discover places and peoples that were unknown to the explorers
ii. The desire to take Christianity to other people across the world
iii. Exploitation- the craving to gain wealth and/or territory through trade or
possession
Europeans ‘discovered’ new lands in Asia, Africa and the Americas and settled, traded and took possession of them either by treaty or by force.
By the end of the 19th century, much of the world was controlled by the Europeans countries either directly, as part of their empires or indirectly, through power held by colonial settlers from the home nations.
In the 20th century, neo-colonialism or economic control, over some former colonies still exists through transnational corporations.
Colonialism & Caribbean Development
The spatial development process in the Caribbean during the colonial period was strongly influenced by the dominance of plantation agriculture, primarily sugar cultivation and later on by bauxite and petroleum mining.
Three major steps taken by the 16th century plantations that influenced the spatial development process are:
i. The ‘”opening-up effect” of plantations
ii. Establishment of Towns
iii. Growth of Mining Centres
Colonialism & Caribbean Development
The spatial development process in the Caribbean during the colonial period was strongly influenced by the dominance of plantation agriculture, primarily sugar cultivation and later on by bauxite and petroleum mining.
Three major steps taken by the 16th century plantations that influenced the spatial development process are:
1) The “opening-up effect” of plantations-
Like most countries in the Third World where plantations were established, the Caribbean region witnesses the clearing of large areas of tropical forest for the production of sugar for the export to Europe.
The preoccupation with this export crop meant that areas considered unsuitable for sugar cultivation were allowed to remain idle in their natural state.
In general, the early plantations avoided the steep slopes that had poor soils and were susceptible to erosion. Hence, sugar plantations were established
predominantly along the flat, low-lying coastal areas.
In this way, sugar-cane came to dominate the best agricultural land in the Caribbean.
This beginning set the stage for spatial disparities in Caribbean development as only the areas that were directly linked to the production of primary products for export attracted infrastructure investment.
2) Establishment of Towns
This was the second effect of the establishment of sugar plantations. The export- oriented nature of the crop meant that transshipment points had to be built.
In most countries, towns were constructed on the leeward side of the territories for protection against strong winds. These became the principal ports, the links between the colony and the metropolitan country.
Like the activities around the sugar factory, the infrastructure around the ports also attracted related commercial activities that encouraged growth.
These towns were also administrative centres and housed the colonial administrative class. The amenities attracted the local elite as this class emerged.
Municipal spending was biased in favour of this urban elite and outside of the sugar- cane growing areas, there little or no investment in rural areas. In fact, resources flowed from rural to urban areas and this is one of the reasons that the term ‘parasitic’ has been applied to the relationship between the colonial port cities and the rural hinterland.
Thus, the colonial period was marked by a disparity in development between urban and rural areas.
3) Growth of Mining Centres
The spatial polarisation pattern of development was further reinforced in the colonial period in some of the countries with the development of mining activities.
In Guyana and Jamaica, where bauxite was found and Trinidad and Tobago where petroleum resources were important, company towns were established to facilitate the mining and processing of the minerals.
Thus, towns such as Mandeville in Jamaica, Linden in Guyana and San Fernando in Trinidad, emerged as new growth points.
Many of the mining and refining towns showed the internal structure of the colonial towns which developed in the East with the ‘native quarter’ for local employees and a European quarter for administrative and technical staff that came from overseas.
The ports and mining towns were oases of develop-ment in the colonial period.
These preceding developments established the pre-conditions for the uneven pattern of development across the Caribbean in the colonial period.
As population grew, migration occurred in response to employment opportunities and access to social facilities provided by the towns, the plantations and the mines. These formed the focus of social, cultural and economic life of the colonies.
Even after emancipation when the freed slaves exited the plantations and some were closed, the infrastructure provided the basis for new settlements as the Caribbean peasantry emerges.
The economic base of the countries was quite narrow with little option outside of the mining and agriculture sector. Peasant farming based for the most part, on poor, shallow soils, a legacy of plantation society and a growing urban sector relying heavily on trade and
commerce and public service employment dominated the rural sector where the bulk of the population lived.
Theory of Plantation Economy
This theory of plantation economy grew out of the insights attained from the theory of dependence in the Caribbean.
Economist Lloyd Best initially developed the theory in collaboration with Canadian economist Karl Levitt.
It consists of an historical and structural analysis of the development of plantation economy in the Caribbean from the 17th century to present day.
Best and Levitt, for the purpose of analysis, detected three broad phases of historical development:
- Pure Plantation Economy, covering the period from about 1600 to the abolition of slavery in 1838. This phase is critical as it sets the framework for the development of the Caribbean as an overseas economy of a distant metropole. The metropolitan country provided organisation and decision-making,
capital, transport, supplies, markets and transplanted labour from Africa. The Caribbean was a mere focus of production.
The local economy had internal inter-dependence and control, more or less, of the plantation sector. Pure Plantation Economy was seen as unlikely to be profitable in the foundation period.
- Plantation Economy modified, spanning the hundred years from 1838 to the ever of the Second World War. In this phase, adjustments were made to the system, most notably by the abolition of slavery and the removal of imperial preference for sugar,
the main staple of the Commonwealth Caribbean.
This period marked the rise of the local peasantry on non-plantation land and the recruitment of indentured immigrant workers from India.
- Plantation Economy further modified, representing the period from 1938 onwards. In this phase, changes occurred in the period beginning with the Second
World War. The depression of the 1930s saw large-scale unemployment, social dislocation and political rebellion. These prompted attempts after the war by colonial and post-colonial governments to seek greater indigenous development in the region.
This period saw the introduction of import-substitution industrialisation, the growth of new mineral export-sectors (bauxite) and the extensive promotion of the tourism industry, all fuelled by an
inflow of foreign private investment.
Limitations of the Plantation Theory
The social and economic characteristics of the Caribbean were treated as if they were unique and different from other colonial societies. The writers ignored the role of class in colonial societies and failed to specify how changing political interest and patterns of collaboration permitted the plantation economy to survive with radical transformation.
Economic aspects were exaggerated and therefore the theory cannot explain why sensible technocratic proposals for structural economic reform in the Caribbean constantly run into intractable political opposition from vested interest.
The Dependence Theory
The term dependency describes the relationship in which the rich countries exploit the poorer countries.
According to the dependency theory, some countries become dependent upon stronger, frequently colonial, powers, as a result of exploitation, trade and ‘
development’.
As the more powerful country exploits resources of its weaker colony, the colony becomes dependent upon the strong power. Goods flow from the colony to support consumers in the overseas country.
Andre Frank (1971) described the effect of capitalist development on many countries as ‘ the development of underdevelopment’. The problem of poor countries is not that they lack the resources, technical know-
how, modern institutions or cultural developments that lead to development, but that they are exploited by capitalist countries.
The dependency theory is a very different approach from most models of development:
-it incorporates politics and economics in its explanation
-it takes into account the historical processes of underdevelopment, i.e. how capitalist development began in one part of the world and then expanded
into other areas
-it sees development as a revolution or a change in the political power of the people, a clash of interests between the ruling classes (bourgeoisie) and the
working classes (proletariat)
-it stresses that to be developed is to be self-reliant and to control natural resources
-it believes that modernization does not necessarily mean westernisation and that underdeveloped countries must set goals of their own, appropriate to
their own resources, needs and values.
The Dependence Theory in the Caribbean
This theory dominated the thinking respect to Third World development in the 1960s and 1970s. It had its origins in the writings of several Latin Americans and scholars from the Caribbean, specifically the so-called New World Group at the UWI Mona Campus.
The theory was present as a conditioning situation in which the economies of one group of countries are conditioned by the development and expansion of others.
The situation of developing countries was not the result of climatic conditions or inefficiently but that of the role these countries played in the global capitalist
system.
The role of colonial territories was to produce raw materials at low costs for the metropole and to this end; a chain of exploitative relationships was set in motion.
It began with the farmer in rural areas and extended to rural market towns, primate cities and finally the metropole. The terms of trade were always more favourable for the next higher level so that the highest beneficiary was the metropole.
In this way, the surplus of developing countries was siphoned off by the dominant capitalist countries. Therefore, development and underdevelopment was seen as opposite sides of the same coin.
The theory argues that it is the basic situation that has allowed the Caribbean to emerge as a group of backward and exploited countries.
The only way that poor countries could free themselves from this type of exploitation was to erect trade barriers and control the activities of trans-national corporations within their borders.
This theory is seen as being irrelevant to the modern age in that it advises poor countries to divorce themselves from the global economy at a time when the world system is promoting and embracing globalisation.
Moreover, it sees the economic system as the root cause of all ills of developing countries.
In response to the various criticisms of the theory, economist Clive Thomas advanced an alternative hypothesis. He argued that Europeans destroyed those indigenous social forces, which otherwise might have transformed the mode of production and in return offered colonies like those in the Commonwealth Caribbean the opportunity to participate in the global division of labour as suppliers or raw materials and consumers of manufactures.
As a result, Caribbean countries display a pattern of consumption that does not represent the needs of the community and a pattern of production oriented to
neither domestic consumption nor domestic needs.
Clive suggested that the continued participation of Third World countries in the world capitalist system would be futile for national development and that a strategy for the transition to socialism should be advocated.
Thomas’ analysis had a distinctly political element; he not only describes and explains the historical origins and contemporary economic consequences of the
worldwide spread of capitalism, but also seeks to understand the political underpinning of the present structure of production relations and productive forces in the Third World.
One of the major criticisms of Thomas’s hypothesis was that inadequate regard was taken of such constraints as size and technological dependence.
Also, it is felt that Thomas was too easily dismissive of export specialisation as a development strategy of Third World countries.
Small Island Developing States
SIDS were recognized as a special case both for their environment and development at the United Nations Conference on Environment and Development (UNCED), also known as the Earth Summit, held in Rio de Janeiro, Brazil in 1992.
SIDS are spread over three geographical regions namely, the Caribbean, the Pacific and the Atlantic, Indian Ocean, Mediterranean and South China Sea (AIMS).
Eg: Trinidad and Tobago, Barbados, Fiji, Tonga, Maldives, Guam, Cape Verde, Mauritius
Challenges faced by SIDS
SIDS are highly disadvantaged in their development process and require special support from the international community. The common challenges faced by SIDS are:
1) narrow resource base depriving them of the benefits of economies of scale
2) domestic markets and heavy dependence on a few external and remote
markets
3) little resilience to natural disasters
4) fragile natural environments
5) high volatility of economic growth limited opportunities for the private sector and a proportionately large reliance of their economies on their public sector;
Overview of Rostow’s Model of Development (International Trade Model of Development)
W.W Rostow was an American economist and government official who proposed his five stage model of development in the 1950’s.
The theory is essentially optimistic. It suggests that, once the development process starts, it builds up momentum and becomes self-sustaining.
His theory was heavily influenced by the historical and political context in which it was written as he was fiercely anti-communist and right-wing; he modeled his theory after western capitalist countries.
Stages of Rostow’s Model of Development (International Trade Model of Development)
Stage 1-Traditional Society:
This stage is characterized by a subsistent, agricultural based economy, with intensive labor and low levels of trading, and a population that does not have a scientific perspective on the world and technology.
Eg: Sub-Saharan countries, and several of the tiny island countries in the Pacific Ocean,
Stage 2- Preconditions to Take-off:
Here, a society begins to develop manufacturing, and a more national/international, as opposed to regional, outlook.
Eg: Zaire
Stage 3- Take-off:
Rostow describes this stage as a short period of intensive growth, in which industrialization begins to occur, and workers and institutions become concentrated around a new industry.
Stage 4- Drive to Maturity:
Modern technology, previously confined to a few take-off industries, diffuses to a wide variety of industries, which then experience rapid growth comparable to the take-off industries. Workers become more skilled and specialized. The economy is diversifying into new areas the economy is producing a wide range
of goods and services and there is less reliance on imports.
Eg: Ireland and Spain
Stage 5- Age of High Mass Consumption:
The economy shifts from production of heavy industry such as steel and energy, to consumer goods, such as motor vehicles and refrigerators. Of particular note is the fact that Rostow’s “Age of High Mass Consumption” dovetails with (occurring before) Daniel Bell’s hypothesized “Post-Industrial Society.”
The Bell and Rostovian models collectively suggest that economic maturation inevitably brings on job-growth which can be followed by wage escalation in the secondary economic sector (manufacturing), which is then followed by dramatic growth in the tertiary economic sector (commerce and services).
Eg:Britain, USA, Germany, Japan, and Canada
Limitations of Rostow’s Model
1) The theory describes but does not explain why do changes occur; i.e., it emphasizes the’ stages’ through which countries pass but neglects the processes involved in development
2) While Rostow illustrates faith in a capitalist system, scholars have criticized his bias towards a western model as the only path towards development.
3) Rostow also assumes that all countries have a desire to develop in the same way, with the end goal of high mass consumption, disregarding the diversity of priorities that each society holds and different measures of development. For example, while Singapore is one of the most economically prosperous countries, it also has one of the highest income disparities in the world.
4) His model is based on American and European history (anglo-centric) and aspiring to American norm
Myrdal’s model of Cumulative Causation (Main concept)
Created by Swedish economist Gunnar Mydral (1898-1987) in 1956. This model is known as the model of Cumulative Causation.
It is a spatial model that attempts to explain why some areas become more economically developed than others. He believed that over time economic forces increase regional inequalities rather than reduce them. He argued that development was caused by natural advantages and regional interaction.
In theory, once the process of cumulative causation starts, it becomes self-sustaining and the core region continues to grow. This process may also work in
reverse.
For example, a factory may close creating an overall regional depression since other industries dependent on the factory would also close.
A downward spiral in the core is therefore established and it may only be possible to reverse this trend through government intervention.
Stages of Myrdal’s model of Cumulative Causation
Stage 1: Traditional, preindustrial stage with few regional disparities
Early economic growth takes place where they are natural advantages. It may be a sheltered coastline where a natural harbour could lead to the development of the major port. Similarly, industries may develop where there is an abundance of natural resources (coal, iron and steel).
Once growth in a region as started, the area develops more rapidly than its surroundings as the process of cumulative causation (meaning that successful,
growing areas attract even more economic activity over time, thereby accentuating regional disparity).
Gradually, acquired advantages such as skilled labour, improved infrastructure, more efficient services and sizable markets, reinforce the natural advantages.
This area, with both natural and acquired advantages, constitutes the core. As job opportunities arise within the core, people continue to migrate from the
periphery.
Original industries prosper and the demand for labour increases as further industrial growth occurs. This is the multiplier effect which takes place as linked industries become established.
As the original growth area continues to develop, this then becomes a growth pole. A chain reaction is set in motion producing self-sustaining economic growth.
Stage 2: Increased disparities caused by multiplier and backwash effects as the country industrializes.
The concentration of economic activity leads to a backwash effect (the process of spatial concentration of economic activity into a core) or polarisation, as the core region develops at the expense of the periphery.
Downward spirals or vicious circles in the periphery then occur as people leave in order to find work in the core. Growth in the core, known as upward spirals or virtuous circles, is therefore sustained by a constant supply of labour, as well as resources, from the periphery.
The loss of valuable labour and resources reduces further industrial development in the periphery.
Stage 3: A reduction in regional inequalities as spread effects occur
As core areas flood the periphery which cheap products, the poor areas have little necessity to develop any industry. The result is the industrially expanding region of the core on the one hand and the
stagnating or declining periphery on the other.
Growth is supposed to spread or trickle-down from the core, as expansion of core activity increases the demand of agricultural raw materials and the core supplies the periphery with innovative goods and services as income levels rise.
As land costs and congestion increase in the core, many branch plants decentralize into the periphery, thus providing a further stimulus to growth. Whether the gap between the core and the periphery widens depends on the relative rates of backwash and spread.
