Uneven Global Distributionrban

8/14/2019 Uneven Global Distributionrban

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2. Uneven globol dislribulion of economic oclivities

Specimen 'A' Level Questions1. Discuss the globol, regionol ond notjonol voriotions in economic weolth.2. Discuss the development gop.3. Evoluote fhe usefulness of vorious indicotors used to meqsure the level ofde\elopment .

Globolizotion hos boih positive ond negolive effe.ts.Ihis section will focus onglobolizotion hss oifected the disiribution of weohh on the globol, regionolnqtionol levels.

6lobol Voriotions in Economic WeqlthThere con be substoniiol equoliiy problems in the dislribution of the benefits fromglobolizotion omong individuols, orgonizqtions, notions, ond regions. Mony of thegcins hove 6een going to lhe rich nqtions or individuqls, creoiing gteolet inequoliJiesond leoding to potenfiol conflicts nqtionolly ond internotionolly.Some hove suggested the possibiliiy of norrowing of incomes globolly bosed on theobservotion thot lhe poor notions ore growing ot o foster rote thon the richnotions. The reality, however, is ihot o smoll group of notions, lhe "tigeteconomies" of Eost Asio, especiolly Chino, south Koreo, Toiwon, ond Moloysio hovebeen growing ot ropid rotes, while the leosl developed notions of Africo, Asio, ondSoufh ond Centrol Americo hove been qrowinq qt o slower rote thon the rich

howond

Must know concepts:Developmeni gopLess Developed Countries (LDCs)Developed Countries (DC)Neu/ly Indusiriolised Economy (NIE)Development indicotorHunon DeveloDmenf Index


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notjons, leoding lo o bimodol "twin peoks" distribulion of incomes. The poor noiionsore ihus becoming increosingly morginolized. The resull hqs been not o norrowingbut rother, wifh the importoni exception of Eqst Asiq, o widening or polorazqtion ofincomes worldwide. The ropid growth economies of Eost Asio ore joining the richnotions, but the poor notions ore slipping even further behind.The Norlh-South DivideFig. 1 below is whol we tefet lo os the North-South divide. The North-SouthDivide is the socio-economic ond politicol division thot exists \elween the weolthydeveloped counfries, known collectively os "the North", ond the poorer developingcouniries (less developed couniries), or "fhe 50uih." Alfhough most notionscomprising the "Norfh" qre in foct locoted in lhe Northern Hemispherc,the divideis noi primorily defined 6y geogrophy. The Norlh is hone to four oul of fivepermonenl members of the United Notions Security Council ond oll members of the68. "The North" mostly covers the West qnd other developed countries.The Brqndt Line is o visuol depiction of the Norih-South divide ProPosed by WillyBrqndt (former Germon Choncellor) in the 1970s. It encircles the world oi lotiiude30" N, possing between North ond centrol Americo, norlh of Africo ond Indio, butlowered towords lhe south to include Ausirolio ond New Zeolond obove ihe line.

e,uq$.!E

THE SOUTH

Fig. 1: Rich North dhd poor south divid occording lo Brondt


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Problems with the term "North-Souih Divide"The expression "North-souih divide" is still in cornmon use, but ihe terms "North"ond "South" ore olreody somewhot outdoted. As noiions become economicollydeveloped, they noy become port of the "North", regordless of geogrophicollocoiion, while ony other notions which do nol guolify for "developed" stotus ore ineffect deemed lo be porf of the "South."The foll of the Sovief Bloc colntries ond the ossocioted povefliy further weokenedfhe expression "North-south Divide" since rnony Soviet Bloc notions now foll intodeveloping stotus. On the other hond, mony notions previously considered" developing," such os the Eosi Asion figers, ore now developed: however, in somernops of the North-South Divide, such notions ore depicted os port of the "south,"which is inconsistenl with fhe obove given definition.

This simple pottern thus hides mony ateas of gtowing weolth (such os Chino ondfndio) ond increosing poverty such os porfs of Africo ond mony former Communiststotes.Moreover weolthy countries do not wholly consist of'hqves', ond even the Poorestcountries hove lheir foir shore of weolthy people.Ihere ore significonl vorioiions within the vorious regions. For exomple, oil-richcountries (e.9. Squdi Arobiq, Libyo ond Venezuelo) ore comporoble in terns of 6DPper copito, with sone induslriolised countries. There is olso consideroble voriobilityomongst the Dcs - U5$23 000 in UK qnd Austrolio ond U5$36 000 in the UnitedStotes ond Luxenbourg.Differences in income between the world's rich ond poor is qlso getting wider. Fore.g. the USA ond selected Africon countries: their 6DP Per copito dilferenceincreosed frorn oboui U5$3 000 in 19OO to more thon U5$37 OO0 in 2003.This increosing inequolity in levels of development 5elween the richer couniries,moinly fhe MEDCs, ond the poorer countries as known os ihe developnent gaP. Thedevelopment gop hos rncreosed over lrme.


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Richest1824UKNetherlandsAuslraliaAustriaBelgiumPoorest1820lndonesialndiaBangladeshPak stanOhina

1900UKNew ZealandAustraliaUSAEelgium1904l\,4yanmarlndiaBangladeshEsvptGhana

2003LuxembourgUSANorwayBermudaCayman lslands2003MalawiPa estineSrerra LeoneSomaliaEast llmor

$s5,100$37,800$37,700$36 600$35 000

$600$600$500$500$500

$17s6$1561$1528$1295$1291

$614$s31$531$531ss23

$4s93$4320$4299$4096$3652

$647$62s$5Bl$509$462

Fig. 2t World's richest ond poorsl counfries, 1820-2003 (6DP Per copito, Us$)

J',t..i .lI,;Jr:i ri 1-1 !::'r:1.: ,'i-. crrr::t ,,: : .iq:L&.r!:.1:.-,rr,itJ'l- riir; lrr i' r(l

.lt:'-rr '.':

Fig. 3 World distribuiion of 6DP per copito

I


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Reqionol Voriqtions in Econonic WeolthStatk differences ore emetging \etween tegions, with some regions pulling oheodond reoching new levels of developmenl , while olhers ore f olling behind.The some pottern is occurring within regions: some countries ore succeeding omiddisoppoiniing regionol trends, while oihers ore folling behind in regions moking goodoveroll progress. For instonce, Loiin Americo ond the Coribbeon hove HDI levelsopprooching levels in DCs. Nevertheless, despite progress in some oreos such qseducotion, the l99Os sow slow economic growth ond slighi increoses in poverfy.There wos greot voriotion in fhe proportion of molnourished PoPulotionsr iheproporiion of hungry people olmost tripled in Cubo from 5% to 13%, while Peru hodthe region's 6iggesl reduclion,from 40% lo !!%.Using fhe co?e-petiphety concepl to understond uneven develoPmentThe core-periphery concept is bosed on the observotion thot shorp terriloriolconlrosts exisl in weqlfh, economic odvoncement ond growth 6elween regions. Theconcept, developed in the 1950s, oltempls fo exploin the uneven globol potlerns ofeconomic ond sociol development. It clossified ihe world into oreos ond nqtions thotore eilher core or periphery ond lofer odded semi-petiphery. Clossificolion dependson lhe sloge of development ond control over resources.Core oteos ore disiinguished by highly developed politicol ond economic systemswhile periphery oreos the opposite. The core hos o level of dominonce over Jheperiphery which is reflec'fed in trqde ond tronsporlotion. As such, the periphery isdependent economicolly (ond perhops, culturolly) on the cote. Most of high levelecononic octivities ond innovoiions ore locoted ol lhe cote, with the periPherysubjected to those processes ot vorious levels. Unsurprisingly, mony peripheryoreos ore former colonieS.The industriqlized countries ore identified qs the core ond the developinq countriesorc the periphery.fhe core (developed countries) hos continued to develop ond indusiriolize bydrowing resources from lhe periphery, leoving the developing couniries withoul fhemeons on the resources to develoP.


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Cose Study: The Europeon UnionEconomic well-being qlso vories ocross the Europeon Union countries. The mostqffluent regions of the continentol core of the Europeon Union hove per copitoincones fhot sre well over lOO% of the EU overoge. Some of the least developedEU regions e.g. Gteece ond Portugol hove incomes thot ore only obout 80% of theEU overoge. Condidote countries fhqf qre on the woifing list to join the EU hoverelotively lower incomes e.g. Bulgorio ond Romoniq hove per copitq incones thot oreonly 25% of lhe EU overoge.

Core regiots of the Europeor UnionThe 'Hot Bonono'EU policy mokers hove drown up o mop of Europe's core oreos bosed lorgely onmorket occessibilify. The result is o bonono-shoped zone thol slnetches fromsouth-eosi Briioin, through the Benelux couniries, non-thern Fronce, the Rhine ondRuhr, through Milon inio northern Iioly. This zone, the'hoi bonono' is likely toottroct heod offices ond reseorch focilities os o result of superioLtronspolt ondtelecommunicotions. Indeed, this zone qccounls for only 10% of the surfoce oreo ofthe EU bui for nore fhon 40% of its fotol output. The cities in this zone ottroclthe heqdquorters of TNCS, possess inportonf producer services (finonciol, legol,qdveriisinq) ond hove o lorge shore of high-tech indusfry.

Lnidntr v ::,,_ Blrth.{Llo,,rement of indus'trlal coreF.inkntrrr

High-Tech

Fig. 4 The 'Hot Bonono


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'Peripherol regions' of EuropeIhe periphery is mode up of Spoin, southern lloly, Greece, Scotlond, Irelond, EostGermony ond Scondinovio. These countries ore hondicopped by high lronsport costs,isololion from informotion ond norkeis, lock modern service industries qndtechnologicolly odvonced industries.The semi-periphery includes the Northenn Englond ond soufhern Frqnce. Ii includesformer economic cote steo which wos once leoding industriol centres of Europe.However, lhese countries ore now suffering due to lheir overdependence ondeclining industries like steel, textiles, ond cool mining. It olso includes o number ofup ond coming rurol regions e.g. Almerio in Andolucio, Spoin, os well os newlyindustriolising tegions e.g. Emilio-Romogno, Ifoly ond iourist regions such osLonguedoc in Fronce.

The Europeon Union ond regionol oidThe Europeon Union hos developed o number of progronmes lo combot regionolinequolities by improving regionol infrostruciure ond increosang Stondqrds of livingin deprived oreos. Ol these,3 hove o regionol expression.

Regions ihoi ore logging behind the prcgressive tegions. Jhese hove o 6NP of75% of the EU averoge. They ore of the centte of the EU's plon io reduceregionol inequolities. Development sirotegies cenlte on infrosfructurolinprovement - tronspor-1, communicotions, services ond focililies.Arecs thot ore ossocioled with -the decline of trodiiionol industries, e.g. coql,iron, sieel, texiiles ond shipbuilding. These ore chorocierised by obove-overogerotes of unemployment ond on out-doted monufocturing secfor. Emphosis isploced on job creqfion, renovotion ond reconstruction. New smoll ond medium-sized enlerptises Ne being totgeled os potenfiol new invesiors.Rurol problem oreos - otiention is focused on non-ogriculturol improvements, e.9.tourism, tronsport, service industries qnd the provision of omenities. Stoppingrurol depopulqtion is o centrol oim.

Nolionol Voriotions in Econonic WeolthIn mqny counfries, ineguolily in income oppeors lo be on the tise. Between lhe1980s qnd the mid- to lote-1990s inequqlity increosed in 42 of 73 countries. Thisindicafes thot within hotionol boundories control over qssefs ond resources i5increosingly conceniroted in the honds of ofew people.

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ll,


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Cose Study: ebilgchino's rote of economic arowth during the lost guorter of o ceniury hos left monycoun-tries croving for o similor expetience fo|their economies. However, whqt isworrisome is the foct lhol this growth hos been on extremely skewed one. Thete isgrowing imbolonce between econonic sectors, qnd both between ond wilhin regions.6ops ore qlso qrising between the urbon ond rurol populolions in Chino.1992 can 6e considered qs ihe yeff in which Chino decided to speed up iis processof economic reforms. Since then the regionol gop hos increosed furfher. In 1998,lhe per copifo 6DP of Shonghoi, the richesi provinciol uni.t, wos fwelve times ihotof Guizhou, the pooresi pnovince. In the yeor 2000 the gap between incones incoostql ond inlond regions went up to 57.3 per cent.fn 1993, Chino's 3 richesf netropolises, Shonghoi, Beijing ond Tionjin were neqr thetop of the HDI ronking. Those ot fhe boitom were oll western provinces. Moreover,the poorest provinces hove the highesf inequqliiy -Tibet hod the lowesl volues foreducotion ottoinment ond life expectoncy.Similorly, urbon incomes ore gtowing fostet thon rurql incomes. The per copitodisposoble income of the urbon Chinese rose olmosf 42 Pet cent in the ftve yeotsbelween 1998 and 2OO2. Over the some period, rurql disposoble income per copilorose o neogre 74.5 per cent.

1l-rlgit I tar2 1994 1-q9r6 tgal ?ott) i100:lFig. 5: chino - more notiohol income is concentroied in netropoliion ohd codslolregions,

.', ,-! .ti3


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The ineguolity between rurol ond urbon oreo is exPected lo worsen with incones inurbqn qreos overoging three times more thqn those in rurol oreos.coupled with this, lhe increose in unemployment in rurol qreas due to the closure ofbusinesses suffering frorn ihe competition in urbon qreos ond bod investment isworsening the economic dilference \elween the fwo oreos. fhe dtfference ineorning powq is threotening to destqbilise the sociol sysfen os rurql dwellers, nowoble to nove to the cities ofler restrictions on mobiliiy were remo.Ved, ore unobleJo offord bosic needs such os housing in the urbon oreos.

Reosons behind the nqiionol voridtions in weolthThe moin reoson behind the increosing disporities between coostol ond inlond Chino,os well os befween rurql ond urbon chino is the cooslql developmenl policy pursuedby the Chinese govetnment. This hos led to copitol, both foreign ond domestic,being invested mostly in the coostol regions of Chinq, wiih the inlond oreos beingstorved of funds. Almost oll the investmenl thot hss come to chino, porliculorlysince the country went in for sfoie-controlled liberolizqiion, hos gone to theeostern region. In 2001, 50 per cent of qll FDI went to just three locotions*Guongdong province, nex.t to Hong Kong, the city of Shonghoi, ond its neighbour,Jiongsu province. Mosi of Jhe rest of the money went to other locotions up onddown lhe coosi. Inlond, ond indeed in some ploces olong the coost, the flow wos iusto frickle. fn 2OO1, Guizhoa, chino's pooresl province qnd horne to neorly 40 millionpeople, ottrocled less thon $30million.

FiqtrE 5 Fl)l:rs. I'cr.cnlirlc ofGDP iI Thr,:c llc.rrionst0;s38ta7i6:szl:3:2:r0 988E3$SESS8SE8A6 g

-'r- East Fbgi .rn'--(.'nr0l ll(!i,,rl--+- \,Est Fbgi on


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Strotegies lo nqrrow the gdpAn excessively wide regionql gop could not only undermine sociol slobility but olsodisrupf poli.iicol stability ond spur secessionist ocfivities. fn o bid to oddress theissue of growing inequolities in fhe country, lhe chinese government seems -to hoveJoken steps to bridge ihe spirolling gop \elween lhe coostol ond inlond regions ofChino, os well os thot belween urbqn ond rurol oreos.The government's ossessment wos thoi the widening gqp wos o result of the declinein the performonce of rurol enierprises in cooslol ond inlond Chino ond in 1992 ifdecided io 'support vigorously' ihe developmenl of rurol enierprises in fhe centrolond weslern rcgions of chino. fn thol yeor the People's Bonk of Chinq offeredmulii-billion bonk locns with o view to supporting rurol enterprises in centrol ondwestetn Chino.In qddiiion, lhe Chinese governnen-t olso onnounced cer-tqin iox exemplions, (whichincluded o thtee-year exemption from income tox for oll newly estoblished rurolenlerprises in certoin oreos) for rurql enterprises in centrol ond westenn Chino.Thqt the efforts of lhe Chinese governmenf lo boost investment in the bqckwqrdregions hove yielded in lhqi ihe coost to inlond rolios of invesiment hos come downin receni yeors. Also, locql governmenls of the coqstql region hove, ol loIe,6eenencouroging ond loying stress on supporting rurol enfsrprises of underdevelopedregions. The developmeni of rurol enlerprises in inlond Chino is furll\er expecled tocurb ihe constont migroiion, both legql qnd illegol, of lobourers fron these regionsto coostol Chinq in seorch of o livelihood, thereby eosing the pressure on lheinfroslructure of lhe coastol region.Nowever, despile ihe procloimed efforts of lhe Chinese government lo spureconomic octivities, growth ond development in inlond Chino, ihings did not turn outos expecled for the cenirql ond western regions. Rqthe|thon helping fhe inlondtegions, the government's policies seem to hove helped the developed coostolregions through the supply of cheop lobour qnd row moteriol from inlqnd chinoThe policy initioted by ihe Ministry of Agriculiure's DePortment of RurolEnterprises in Chino, ovowedly to promofe mutuol economic benefii ond commonprosperity, in essence hos meont thot while coostol Chino will witness thedeveloprnent of high ond new technology-bosed indusfries ond fhe growth of onexporf-led economy, the emphosis in inlond Chino will rest on q strotegy of resourceexploitofion. Foced with o ropid rise in woges in coostol Chino (fhe woges in eosternChinq being obout 1.5 times higher ihon in inlond regions), the developed coosioloreos of Chino will constonily try to ironsfer only low-grode lobour'intensive


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production processes to centrol ond weslern Chinq while trying to reploce lobourwith copitol in the medium to long run.Heovy exploilotion of the minerql resources of inlond Chino olongside o booming rowond processed moleriol industry will soon leod lo environnentol degrodotion ondresource depletion of the region, resulting in long-ferm cqlomiiy.

Cose Study: IlqlyEven in on odvonced couniry such os ftoly, o cote-petiphety structure is evident:Northern Ifoly forms the core; o forwqrd looking, urbonised ond industriql qrewhile Southern ftoly is the periphery which is the underdeveloped, ogriculturolbosed ond morked by rurol poverty.As shown by the choropleth mop 6elow, there is o distinct pqtfern of unemploymentbetween Northern ond Southern Itoly.

Unemployment Rate 1993

24341111! nr ss ng va !no.=t:,;X 12=ls%

Fig. 6: Unemployment in the Provinces of Iioly, 1993Source: http://www.mzes.uni-mannflein.dc/eurodata/newsletter/no2/couD1ry trofile.html

/t^usi reod:Noiionol voriotions in economic weolth 'A Conparison of Norfhem and SouthernIta/y'


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Whqt is the Development 6oD?Ihe develgpment gqp is ihe divide between rich ond poor, or 'hqves'ond 'hove nots'.This exists qt severol levels. The 'hoves', ot o globol scole represent the richest20% of people, who consume oround 80% of oll resources. The globol 'hove nots' orelhe poorest 20% of people who eorn only 1.3% of globol income.Mops of globol income distribution sho!/ some countries to be very rich, whilstotherc ote very poor.

654s3G=201

4

Annual per capita GDP growth 1991-2000

Fig. 7 Annuol per copito 6DP growfh of regions

The powerful GB counlties (the UK, Fronce, Gernany,Iloly, the USA, Cqnqdo,Jqpqn ond Russio) coniinue to see their weolth grow. whilst NfCs (5. Korao) hoveseen the most ropid growth os they benefit fnom outsourcing ond globqlisotion.Other economies (RICs like Thoilond qnd some LDCs) ote growing more slowly;others (mony Africon countries), ore hordly growing ot oll ond income growth inthese countries hos 6een negalive lor the lost decode.Arguobly, much of ihe world's weollh is in fhe honds of lhe 68 / DCs. Most TNCsoriginote in these countries, they hove the controlling stoke in instilutions such osthe IMF ond World Bonk, ond the mojoriiy of world trode (80%) occurs beiween+he,se countries


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Why hos ihe development gop increqsed?Income surveys suggest fhol globol inequqliiy hos increosed since the 1980s. Themoin forces behind lhis divergence were:. A widening income gop between the poorest ond richest people due to slowgrowlh in rurol incomes in populous Asion countries relotive to rich oEDc(Orgonisofion for Economic Cooperoiion ond Development) couniries.. Foster progress in urbon Chino relqiive to rurol Chino ond to Indio.. Shrinkoge in the world s niddle-incone group.But these conclusions ore not enlirely conclusive due to the limited lime frqmecovered

lleosures (Indicotorsl of DeveloDmentThe most conmonly reported development slqtisiic is q counlry's 6DP (grossdomesiic product),6NP (9ross notionol product) or 6NI (9ross noiionol income).The World Bonk divides the world's countries into 4 groups by income:1. lou incone2. louet niddle income3. upper niddle incone4. high inconeThe distinctions ore node on the bosis of per copito gross notionol product or 6NP.Il is generolly considered lo best tellect the level of notionol economrcdevelopment.

6NP per copitolow incorne countries Less thon u.5.$610lower middle income U.s.$611 to $2465upper middle income U.s.$2466 ro $7619high income U.3.$7620 or greatet


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6ross Noiionol Produci (6NP) / 6ross Nqtionol Income (6Nf)6NP is the totol volue of o country's finol output of goods ond services produced ina specific lime petiod - normolly o yeor. This includes income eorned by residents ofo country from obrood.For infernqfionol comporisons ond controsls, il is helpful to deterrnine the 6NP on oper heod of populqtion (per copito) bosis i.e. lhe volue of 6NP divided by the toiolpopulotion, to eliminote differences between countries ottribuioble to populotionsize. 6NP per cqpito is therefore o meosure of overoge notionql income.The onnuol 6NP per copiio for some countries exceeds $10 000, suggesting greoiweolth ond o high level of economic development. For ihe most porf, these oremodern s.toies wilh highly diversified economies - such os the United stoles,Germony, Jopon, ond Austrqliq.Approximotely 15% ol the world's populqtion live in oreqs wilh o high 6NP/copito.The highest volues orel. Luxembourgr $55 100. The USAr $37 800. Norwoyr $37 7oo.At the opposile end of the scole ore countries wiih on onnuol per copitq 6NP of lessthon $500. These noiions mosi notobly ore concentroted in Africo qnd souihern ondsouiheqstern Asio. These ore the LDCs ond include Eost Timor, Sierro Leone ondthe 6qzq strip. Reosons for iheir slognotion includei-

. Civil wors ond territoriql disputes. Ropid populqtion growth. Poyinq off Previous debi. A lock of resources. Noturol ond humon hozords (including AIDS).6NI is o new term replocing GNP.6NI is ihe sum of volue odded by oll resideniproducers plus net receipts of income from obrood.Limitotions of 6NP os on indicotor of develoPment:1. It is offen very difficuli to obloin occurote informoiion oboul ihe economy of o

country.2. 6NP could be misleoding qs items octuolly produced in mony economicollydeveloping counfries do not olwoys hove o monetory volue. For exomple,subsistence ogriculture is still extremely irnportont in develoPing countries.


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5.

3.Most of this ogriculturol produce is used for donesiic consumption, ond doesnot count towords +he 6NP6NP ond 6DP ore olwoys given in US dollors. Hence, there is q problen ofcurrency conversion os some countries hove ortificiolly high or low currencies.6NP olone tells us nothing obout the quqliiy of lile experienced by the mqlorityof lhe populotion qs if just shows the moneiony volue of goods ond servrcesproduced in o country.Although on increose in GNP is necessory for improvements in living standordsto occur, it does not olwoys meon thot econonic growth qutomqticqlly producesbetier living conditions.6. 6NP does not show the octuol distribution of weqlth or ihe levels of inequolity

6ross Domestic Product (6DP)@DP is the totol volue of oll finol outputs of goods ond services produced by ocountry's econony, i.e. wiihin the country's territory, in o specific time period -nornolly o yeor. This excludes net overseos income.

Purchosing Power Pority (PPP)PPP is o rote of exchsnge ihqt occounts for price dilferences between countriesollowing internolionol comporisons of income qnd purchosing power. When odjustedto PPP, $1 hos the sorne purchqsing power in lhe domestic economy os in the UsA.Overnighi the relqtive importonce of the Third World doubled. However, it doeslittle fo reduce the confrosis ihot remoin between the richest of the Norfh qndfhe poorest of the South.Problems in using these indices:Developmenf indices need to be used with cote, os they con be misleoding. Forexompler1. As on overoge for the whole populotion of o counfry, the stotistic tokes nooccounl of distribution. This meons ihoi indices which suggest o highly-

developed counfry do not reveol substontiol inequolilies between diffetentsegments of society (for exornple, o portion of the populotion could be livingbelow the poverty level or without occess to bqsic services).2. 6DP is on income meosure thqt ignores other dimensions of developmenl3. They do not show reqionql voriaiions


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4.5.6.

They do not show eihnic qnd rociol voristions in GDPlcopitoThey fqil to pick up the sociql qnd environmentol cosis of developmentDote used in indices, in some countries, ore out-of-dote or hord lo collect. Sonecountries do not wish to hove certoin index doto collecled - for exomple monycouniries do not publish stotistics reflecting on occurole occount of the numberof people who enigrote from lheir country.

Alternoiive Indicqtors of DevelopmeniThus, composite indexes like fhe Physicql Quqlity of Life Index (PQLI) ond theHumon Development Index (HDI) ore now generolly recognised os befler indicotorsof o country's position in the globol developnenl spectrum fhon the lroditionoleconomic meosure,6DP per copito.

Physicol Quolity of Life Index (PQLI)

Formulofed by the Overseos Development Council (ODC) in 1977, it is comprised ofthree voriqbles:o) infoni mortolity raie,b) oduli literocy rote, ondc) life expectoncy ol oge one-Eoch is given on index scole of 0-100, ond o country with on index greoter lhan 77suggests ihoi the minimum requirements for well-being ore sofisfied in thqtcountry.e.9. Infont Mortolify

Lif e expectoncyCouniry with highest rote in world (Combodio) = 0Country with lowest rote in world (Sweden) = 100Sierro Leone shortesl life expecioncy = 0Norwoy with longest life expecloncy = 100

one odvontoge of the PQLI is thot the index is simple to use. on the oiher hond,its use is limited becouse it only tokes into occount of -ihree voriobles. Incomelevels or purchqsing power qre no-i included in lhe colculoiion.


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Humon Develqpment Index (HDI)In 1990, the United Nqfions Development Progromme (UNDP) orgued lhot inconegrowth olone wos nol q good indicotion of develoPment ond thof humon developmentshould feod to greoter qnd more sustoinoble economic growih. To meosure theprogress mode by notions in improving living sfondqrds, ihe Humon Developrnenifndex ossesses o couniry's overoge achievements in ihree bosic osPects of humondeveloprnent:o) longevity os meosured by life xpectoncy ot birth,b) knowledge os meosured by q combinolion of rhe odult literocy rote ond the

combined primory, secondory, ond tertiory enrolnent rotes, qndc) o deceni stondord of living through rneosuring 6DP per person.The HDf wos qealed to ploce people ond fheir copobiliiies os ihe ultimote criterjqfor ossessing the development of o country, roiher thon economic growth. AsVietnqm hos o higher literocy rote ond life expectancy ihon Pokiston it hos o rnuchhigher HDI volue, olthough their per copito 6DP ore similor.

Left: Karachi, Pakistan's biggest city (pop approx 12 m),Right: Ho Chi Minh City, Vietnam's biggest city (pop approx 5 m)

The HDI is expressedihe higher the level ofdevelopment.

os o volue befween O ond 1.humon development. A HDI The closer fo l the score is,below 0.5 is considered low


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Figu:e 1. Humax 0euelopmert lndex in SelecledC0unkiss, l97$-ru03llnired Siat8s

Sa dlArahi?Dem Rep. of Corgo

l0

0_6

$.d ts80 1$85g75 1990 tsgS$: r .(e: L'fulP?0{0 ?0n5

Mosi regions hove seen steody improvemenfs in HDI over the post decode wifhEost Asio ond the Pocific performing porticulqrly well. Arob slotes hove seensubstonliol growth, exceeding the overoge increqse for LEDCs. Sub-Sohoron Africo,by confrqsf, hqs been olmost sfognont. Mony oil-producing countries, for exotnple,hove nuch lower HDI ronkings lhon their 6NP ronking, while some poor counfriesronk relolively high by their HDI becouse they hove deliberotely devoted scorceresources io humon development. Countries such os Cubo (0.806), Costo Rico(0.832) ond Sri Lonko (0.730) foll inio this cotegory.Usefulness of the HDI in meosuring development:. Hos the qdvqntoges of 6eing eosy Io understqnd. Provides q bosis for ronking of countries, nof just in ierms of economic

developrnent. Enobling comporisons of the performonce of o counlry over time. For instonce,the HDI con highlight the successes of some countries. Venezuelq for e.g.sioried with o hiqher HDI fhon Brozil in 1975 (0.72 vs 0.64) but Brozil hosmode o much fqster progress (both now 0.755).

Limitotions of the HDI. Like qny other composite index, the HDI suffers o limilotion of not copturing ollthe different dimensions of humon developmenl. Dofo qvoilobility poses o mojorchollenge to copiuring oiher imporlont dinensions of humon develoPment such

Rrss en Fealeaatiof


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os polilicol freedom, environmentql susfoincbility and degree of people's selfrespect.Secondly, the HDI is not designed to ossess progress in humon developmentover o shor-t-term period becouse some of ils componenf indicqtors ore noiresponsive to shori-term policy chonges.. The condiiions for on 'ovenoge petson' ote teflected. The exteni to whichindividuols deviote from this norm is not reflected.. As long os the limilotions of the HDI ore ocknowledged, the HDI mighl prove ouseful lool in idenfifying development prioriiies. Despiie its odvonloges overindicotors such os 6DP per copifq, ii remoins on ottempt to summorise complexsociql dynomics processes by meons of o single number.

Gender-relqled Development Index (6DI)6DI meqsures ochievemeni in the some dimensions ond using the some indicotors qslhe HDI i.e. life expectoncy, literocy, ond income, bul exomines inequqlitiesbeiween women ond men. ft is simply lhe HDI odjusted for gender ineguolity.Gender Empowerment lileosure (6Elt'\)Anofher meosure used by those working in development which, like lhe 6DI, hos obuilt-in gender comporison. The 6EM, however, deols with economic qnd polilicolspheres of qctivity cnd is thus more intetesled in women's involvement in theseqreos of life, not just with their stondord of living. Economic figures oregqthered oboui women in odministrolion, monogenent, professionql ond technicolwork. Politicol involvement is meosured in terms of seqts in government.

Humon Poverty Index (HPI)The UNDP's HPI is olso bosed on three mqin indices:o) ihe per.entoge of .ihe populqtion not expec ted to survive 5eyond lhe age of 4Oyeorsb) The odult illiierocy rote ondc) A deprivqtion index bosed on on overoge of three voriobles:. Ihe petcenloge of the populotion without occess to sofe drinking woter. fhe percenloge of lhe populqfion withoui occess to heolth services


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. rhe percentage of children under ihe cge of 5 yeors who ore underweightthrough molnourishment.While ihe HDI meosures the overoll progress in o country in ochieving hunondevelopment. the HPI reflects the distribution of progress qnd meosures thebocklog of deprivotions thot still exist. The HPI meosures deprivotion in the somedimensions of bosic humon development os the HDI.

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