Preparing for the Twenty-first Century.

Paul Kennedy Chapter ten:

Winners and losers in the developing world

Winners and Losers in the Developing World

A review of successes and failures of developing nations in their pursuit of

improvement

Presentation Outline

Introduction -- Alicia Dalton Latin America -- Laurie Dressler Islamic world -- Emily Lambright African nations -- Stacey Hipp Conclusions -- Shanna Hamilton Class debate

Requirements for Success

Throughout history, four key issues set the guidelines for successful growth and

development:– Population– Education– Policy– Capital

Changing a “Have-not” Nation Into a “Have” Nation

Control of the populationpopulation growth rate Utmost importance of educationeducation

throughout the society Strong governmental policiespolicies Valuable natural resources and other

available capitalcapital

Gap Between Rich and Poor

Always been a separation between economically rich and poor nations

This gap is continuing to widen This yields two responses:

– Resentment by poorer peoples against prosperous societies

– A desire to emulate (imitate, or follow in one’s footsteps)

Example: Korea’s emulation of Japan

Unique Example -- Korea

During 1960’s, had little promise regarding development and economic improvement

Had very few resources Since 1960’s GNP increased 10 to 12 times Korea is becoming one of the richest

countries of all in the twenty-first century Success mainly due to the decreasing

population growth rate

Unique Example -- West Africa

Had more resources than Korea Increasing population growth, often due to

cultural and religious reasons Continuing to face chronic poverty, poor

health, malnutrition, and underdevelopment

Economic & Domestic Challenges ofLatin America

Countries

Population Changes

Bolivia, the Dominican republic & Haiti– Higher fertility rate; lower life expectancy

Brazil, Columbia, Mexico, Venezuela, & Costa Rica – Lower fertility rate; longer life expectancy

Argentina, chili & Uruguay– Demographic characteristics of developed

countries

Facts:

In the 1980’s, as east Asia was gaining ground, Latin America's condition worsened

Between 1980-1988 Latin America's real GDP per person steadily fell by an annual average 0.9%

With few exceptions, most countries now have per capita GDP's lower than those a decade earlier

What Went Wrong?

Government errors:– Pursued a policy of import substitution– Poured money into state-owned enterprises, large

bureaucracies, & oversized armed forces– Raised loans from western banks & international agencies

Industries were given protective tariffs, government subsidies & tax breaks

Lax financial policies & an increased reliance upon foreign borrowing

Results

Their products became less attractive abroad

Price inflation accelerated Their currency was practically worthless

Increased Debt

Some L.A. Countries are among the most indebted in the world

Most countries were incapable of repaying even the interestinterest on their loans

Loan defaults caused capital to dry up from western banks & a net capital outflow

180 million people (40 percent) are living in poverty

Educational system suffered neglect & lack of investment

Decay of educational structures left some universities without heat & some public schools without glass window panes

In Guatemala, approximately 63% of those ten years of age and older are illiterate

In areas of least education, increasing population erodes away resources

Educational Weaknesses

Political Progress

The coming of democratic regimes Stiff economic reforms Replacement of “state protectionism with

import liberalization” Conversion of budget deficits into surpluses

Detriments to U.S. Due to Latin America Relationship

U.S. Exports are hurt by Latin America's economic problems

Environment threatened by diminishing amazon & central American rain forests

Drug problem fueled by Latin America supplies– > 80% of cocaine & 90% of marijuana entering

U.S. Are made/moved through Latin America Population is altered by migration from Mexico,

the Caribbean, & central America

The World of Islam Faces Many Problems That Are Common to

Other Developing Countries

Population problems Shortages of resources Educational and technological deficiencies Regional conflicts that lessen political stability

Three Main Factors That Influence the Development Rate

of the Middle East: Uneven location of oil in the middle east

issues of wars and conflicts Issues of war and conflict Certain regimes’ resentment of global forces for

change

Oil Distribution

A division between the “super rich” and the “dreadfully poor”

Large neighbors (Iraq and Iran) are jealous of less populated and oil-rich countries (Kuwait 2 million and united Arab emirates 1.3 million people)

Oil Distribution (Continued)

The massive assistance given to “have-nots” by certain “haves” (Saudi Arabia to Iraq) causes hostility among neighbors

War and Conflict:

“More than any other developing region, then, the future of the middle east and north Africa is affected by issues or war and conflict.”

Billions of dollars of armaments have been supplied to the region by western, soviet, and Chinese producers

Global Change

“. . .The regimes themselves stand in angry resentment of global forces for change. . .”

Global Change (Continued)

Some people recommend wide-scale education to combat this like Japan and Scandinavia did

Few females are educated in strongly fundamentalist areas

Many educated Arabs immigrate to other countries for occupational opportunities

Global Change (Continued)

Religious intolerance, technological backwardness, and a feudal cast of mind are blamed by some for the region’s reluctance to change

Others believe that the successful expansionist actions of Europe helped Islam's retreat into itself

“Clearly , Islam suffers from many self-inflicted problems. But if much of its angry, confrontational stance toward the international order of today is due to a long-held fear of being swallowed up by the west, not much in the way of change can be expected until fear is dissipated.”

Sub-Sahara Africa

“The third world’s third world”

Optimism for the Future

In the 1960’s many of the countries of Africa were gaining their independence.

There was an overwhelming belief that independence would bring with it economic prosperity.

There were hopes of building industries, improving the infrastructure, and increasing their self sufficiency.

Inhibitions to Success

Population Increases

Importation of improvements in medicine– Decreased infant mortality rates– Longer life span

Cultural and religious beliefs– Achievement of higher social status due to

having larger families– Women not bearing numerous children were

believed to be cursed

Insubstantial Agricultural Productivity

Farm output has not increased in relation to the population

Larger numbers of grazing cattle and sheep have caused substantial deforestation and topsoil erosion

Africans were forced to rely on the importation of foodstuffs

Increased Debt

Optimism and ambition of African nationalists led to increased debt as they attempted to build new airports, harbors, and factories

Large populations necessitated increased borrowing to purchase imported foodstuffs

Western lenders began to deny giving more loans to many African countries as they were unable to collect on past debt

Political Unrest

European colonialists divided up the African continent with no regard for the historical boundaries that had been set by previous tribes and groups

Warring groups were forced to live under the same governments

Few governments were able to hold onto power long enough to achieve any major accomplishments

Inadequate Education

While population continues to increase, there has been no increase in the attempts to educate the young Africans

African nations have typically fallen far behind other nations of the world in providing education for its citizens

With many eager to learn, there is little opportunity for them to continue their education beyond primary school

Angola Vs. Sweden

Less than 2.4 million attend primary schools

570,000 attend secondary schools

179,000 attend institutions of higher education

2.4 million children attend primary schools

153,000 attend secondary schools

4,700 attend institutions of higher education

Western Intervention

Advantages

Temporary relief from starvation for a number of starving Africans

Renewed hope for the future prosperity of sub-Saharan Africa

Hard currency to buy imported goods Global intervention to promote peace

among warring groups

Disadvantages

Compliance with certain stipulations required by the awarding state or institution

Promise to maintain favorable economic relations with the awarding nations that may prove unfavorable to Africa

Continued dependence on foreign aid Deeper debt

What Is the Bottom Line????

There is a dynamic interplay of factors that effects the growth and development of countries

Population, policy, education and capital are the big four -- these factors distinguish the “haves” from the “have-nots”

Education

Education is the single most important factor that has a huge effect on social, political, and technological development– Education has the ability to control population

growth– Education can increase environmental quality– Education can reduce the transmission of disease

thus increasing the overall productivity of a country or community

Education (Continued)

Population, policy and lack of capital effect the availability and quality of education– In 1993 statistics showed that there were 2,635

Scientist per million Americans, but in Latin America there were only 209 Scientist per million Latin’s. This illustrates the differences in availability of education.

Education is proportional to technological advancements

Population Unchecked population growth is a common denominator

in Latin America, The Middle East and Africa– Statistics show that Africa’s population will double every 20

years None of these countries produce enough resources to

sustain their rate of growth – Large populations decreases the availability and quality of

employment and quality lives– Inadequate resources generates impoverished conditions this

increases the incident of disease

Policy

Strong political framework within which economic growth is fostered is a key element in the development of any country – One of the things that made Korea and

Taiwan's development successful was the institution of strict policy governing spending (imports) and investments

Policy (Continued)

– Differences in economic policy Africa and other primary commodity producing

countries are for higher raw material prices where as the export oriented manufacturing nations of east Asia sought to keep prices low

Latin America, The middle east, and Africa have not developed governments that successfully implement plans for technological and social development

Capital

Availability of capital increases the opportunities of developing countries

High levels of national savings employing fiscal measures, taxes and import controls to encourage personal saving .

Large amounts of low interest capital made available for investment in manufacture and commerce.

Capital (Continued)

What did Taiwan and Korea Do???– Increased personal savings: in 1987 Taiwan saved

approximately 38.8 % of its money, comparatively America saved approximately 12.7%

– Both Korea and Taiwan were committed to exporting; their managers and work forces were trained to produce what foreign customers wanted.

– The value of their currency was kept to increase exports and decrease imports

…..And Finally

“The developing countries response to the broad forces for global change is going to be uneven. While some are in distress others are booming.”

We can only expect that the financial and communications revolution and the emergence of multinational corporations will increase the gap between the rich and the poor

…And Finally (Continued)

In sum, as we move into the 21st century the developed economies appear to have all of the trump cards in their hands - capital, technology, control of communications, and surplus of foodstuffs - and if anything, their advantages are growing because technology is eroding the value of labor.

“The Story of Winners and Losers will continue only this

time modern communication will remind us all of the growing

disparity”.