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Developing and
Less-Developed Countries
What does this have to do with the Third World?
What is the connection between this image and the previous one?
Why study the Third World?• Western role in creating and sustaining
some of the problems in the Third World
Terminology Developing countries Underdeveloped countries Less developed countries
(LDCs) Third world countries
While referring to underdeveloped countries many different terms are used. The terms used are intended to describe the stage of development of these countries in comparison to those that are more developed. As a result, the terms used are almost always in pairs. The most dramatic way of referring to the two sets of countries is to make a distinction between backward and advanced economies, or between traditional and modern economies. As the term "backward" carries a negative connotation, it is rarely used these days. It is much more popular to put all countries of the world on a continuum based on the degree of economic development. Using this criterion, several pairs of terms are employed in distinguishing countries with different degrees of economic development—developed and underdeveloped countries, more developed and less developed countries (the latter are often simply referred to as LDCs), developing and developed economies. As the terms "less developed countries" and "developing countries" embody a sense of optimism, their use has become commonplace. Developed countries are also referred to as industrialized countries. Countries that have recently developed are referred to as the newly industrialized economies.
Read more: Economic Development - benefits http://www.referenceforbusiness.com/encyclopedia/Eco-Ent/Economic-Development.html#ixzz1GafhEdtC
Third World countries
Issues in Common:• Poverty• Low GNPs• Trade dependency• Weak States –
– Fragile democracies– Single-party regimes– Military regimes– Personal dictatorships– Failed states
• Environmental Threats• Cleavages and Conflict
– Identity – ethnicity– Religion– Traditional structures – patron-client relations
• Globalization
Why study the Third World?
• Interdependence and globalization
• most of the world– population– area
• most of the natural resources– raw materials and energy resources– Organization of Petroleum Exporting
Countries
Newly Industrializing countries Newly Industrializing Countries – some
countries have experienced economic growth and democratization in the last few decades, ex. South Korea and Mexico and Iran but without the democratizationCompressed modernity – rapid economic and political
change that transformed the country into a stable nation with democratizing political institutions, a growing economy and expanding nongovernmental institutions.
Less Developed Countries
Ex. Nigeria Political and economic change but not
democratic characteristics Economic difficulties Political instability Authoritarian rule
ECONOMIC DEVELOPMENT
Millennium Development Goals
In 2000 the UN Millennium Declaration was adopted at the largest-ever gathering of heads of state
Millennium Development Goals
eradicate extreme poverty and hunger achieve universal primary education promote gender equality reduce child mortality improve maternal health combat HIV/AIDS, malaria, etc ensure environmental sustainability global partnership for development
• https://www.youtube.com/watch?v=SXB1Z_CxBK0
Economic development
Can reinforce political development Based on free market capitalism
Economic liberalization – expanding private ownership
Marketization – allowing free market principles to govern the economy
Measures of economic development Gross National Product (GNP) - the total market
value of all goods and services produced in the country Provides limited information about the economic and
human conditions of the people living in a particular economy
Purchasing Power Parity (PPP) – statistical tool that estimates the buying power of income across different countries using US prices as a benchmark (takes into account each country’s cost of living)
GDP & PPP
https://www.youtube.com/watch?v=MLSIjW5cDes
Comparing Economic Sectors Primary economic sector – agriculture, raising animals, fishing,
forestry, mining. Draws raw materials from natural environment. Largest in low income, pre-industrial nations.
Secondary economic sector – industry. Transforms raw materials into manufactured goods. Includes such operations as refining petroleum into gasoline, turning metals into tools and automobines.
Tertiary economic sector – economy focuses on services rather than goods. Dominant in post-industrial societies, countries where most people are no longer employed in industry. Examples of tertiary jobs are construction, trade, finance, real estate, private services, government, transportation.
COMPARATIVE ECONOMIC SECTORS (as % of labor force by occupation)
COUNTRY PRIMARY SECONDARY TERTIARY
China 38% 46.9% 43%
Iran 25% 31% 45%
Mexico 13.7% 23.4% 62.9%
Nigeria 70% 10% 20%
Russia 10% 31.9% 58.1%
United Kingdom
1.4% 18.2% 80.4%
From: CIA World Factbook, 2010
PPP for the AP 6COUNTRY PPP in US $
United Kingdom $34,800
Russia $15,900
China $7,600
Mexico $13,900
Iran $10,600
Nigeria $2,500
From: CIA World Factbook, 2010
Why is there lack of economic development in LDCs?1. Due to NEOCOLONIALISM - LDCs are
in an unequal relationship in a world in which indirect forms of imperialism are at play. They have to play by the rules of the more advanced countries without the opportunity of catching up.
Why is there lack of economic development in LDCs?2. Their traditions do not allow them to follow
the path to modernization which is equivalent to westernization. This path is based on the model of industrialization set by Great Britain as the first to industrialize and then applied by other European nations and the US. It is believed that old values and beliefs are hindering progress.
Why is there lack of economic development in LDCs?
3. Dependency Theory – the economic development of many countries in the world is blocked by the fact that industrialized nations exploit them. How can a country develop when its resources, natural
and human, are controlled by a handful of prosperous industrialized countries?
Based on Marxist ideology of class exploitation Opposes the Westernization theory of development Led to LDCs turning to socialism and nationalizing
industries to narrow the gap between rich and poor
‘core’ v. ‘periphery’ – dependency theory
ECONOMIC POLICIES USED IN THE LESS-DEVELOPED WORLD TO JUMP START
THEIR ECONOMIES
Import substitution Governments in poorer countries must create more
positive conditions for the development of local industries
In order to protect local industries imports must be restricted so they set quotas or impose heavy import taxes. The rationale is that this will make imports more expensive and
people will have to buy locally so there will be increased demand for local products which will stimulate further growth of domestic businesses. Eventually these industries will grow enough to be able to compete internationally, that is, export their products.
Export-oriented industrialization Used by the “Asian Tigers” – Hong Kong, South
Korea, Taiwan, Singapore Integrates the country’s economy into the global
economy by concentrating on economic production that can have a place in international markets. An innovator country produces something new That country moves on to new innovations Other countries think of ways to make the first
product better and cheaper and export it back to the first country. Example, electronics and cars
POLITICAL DEVELOPMENT
Review of democratization
A state moves from a procedural democracy, which is…
Review of democratization
A state moves from a procedural democracy, which is… a state that holds regular, competitive elections to a substantive democracy
A substantive democracy is a state that …
Review of democratization
A state moves from a procedural democracy, which is… a state that holds regular, competitive elections to a substantive democracy
A substantive democracy is a state that … not only has regular competitive elections, but it also has civil liberties, rule of law and open civil society
Types of states• strong states• weak states
– multi-party democracies– single-party regimes– military regimes– personal dictatorships
• failed states – a state that is so weak, it collapses resulting in anarchy and violence - Nigeria