Uneven global distribution of Economic activities

1. Global variations in economic wealth - Many of the gains have gone to the rich nations or individuals which help them become richer -> greater inequalities and leading to potential conflicts nationally and internationally - Least developed nations have been growing at slower rate than the rich nations and increasingly marginalized - Widening of income world wide 2. North South divide - Rich North poor South - Socio-economic and political division - Problems: Outdated Some countries in the soviet Bloc nations now fall into developing status vs. Asia tigers Wealthy countries do not wholly consist of haves and even the poorest countries have their fair share of wealthy people Significant regional variations Differences in income between the worlds rich and poor is also getting bigger (Development gap has increased over time) 3. Regional variations: - Some regions pulling ahead, others fall behind - Core Periphery concept Sharp territorial contrasts exits in wealth, economic advancement and growth between regions Core: highly developed political economic systems, dominance in trade and transportation, high level of economic activity and innovation -> industrialized countries Periphery: opposite, dependent on core for economic and cultural development, low level of technology, former colonies -> developing countries Core continues to develop and industrialize by drawing resources from periphery, leaving developing countries without the means or resources to develop 4. National variations: - Control over assets and resources is increasingly concentrated in the hands of a few people 5. Development gap: - Divide between rich and poor or haves and have nots. - Several levels - Globally: haves: 20% people who consume around 80% of all resources; have nots: poorest 20% of people who earn less than 1.3% of global income

Rich benefits from outsourcing and globalization Much of the worlds wealth is in the hand of G8 and DCs, since TNCs are originated here and they have the controlling stake in institutions such as WTO, IMF, World bank - Development gap widen because: Slow growth in rural incomes in populous Asian countries relative to rich OECD Rapid growth in urban China vs. India/rural China Shrinkage of the worlds mid income group 6. Indicators: a. Single indicators: GDP, GNI, GNP - GNP: total value of a countrys final output of goods and services produced in a specific time period normally a year, including income earned by residents of a country from abroad. - Reasons for stagnation of GNP growth: Civil wars and territorial disputes Rapid population growth Paying off previous debt Lack of resources Natural and human hazards - GNI: sum of value added by all residents producers plus net receipts of income from abroad - GDP: total value of a countrys final output of goods and services produced in a specific time period normally a year, excluding income earned by residents of a country from abroad. - Limitations of GNP and GNI: Difficult to obtain accurate information Misleading as items actually produced in many LDCs do not always have monetary value e.g. agriculture products not counted in GNP Given in USD -> problems with currency exchange Ignore quality of life experienced, only monetary value of goods and services Economic growth does not necessary means that living condition improves No actual distribution of wealth - Limitations of GDP Average for the whole population -> no distribution Ignore other dimension of development No regional, ethnics, racial variations Fail to pick up social and environmental costs of development Out of date and hard to collect b. Composite indicators: HDI - Indicators of human development in terms of: Life expectancy at birth Adult literacy rate/ primary, 2ndary and tertiary enrolment rates GDP/person - Usefulness: Easy to understand

Basis for ranking of countries, not just in terms of economic development Comparisons of the performance of a country over time A good attempt to summarize complex social dynamics processes by means of a single number Limitations: Not capturing all dimension of human development: political freedom, environmental sustainability, degree of peoples self respect Not designed to assess in human development over a short term period since some component indicators are not responsive to short term measurement Conditions for an average person are reflected, but individuals deviate from this norm are not