Development Introduction

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Permanent residents of people living in Caribbean island may live in poverty, earning
less money in a year than a night's hotel bill
Tourism brings money to the island to help any improvements
The world is divided between rich and poor countries
The division of the world into relatively wealthy regions and relatively poor ones
We look at basic ways that humans earn their living
a
Growing old
b
Manufacturing products
c
Providing services
Earth's 200 countries can be classified according to development
a
Process of improving conditions of people through diffusion of knowledge and
technology
b
Continuous and never ending
Countries clustering high or low end of continuum of development
a
MDC is higher
b
LDC lower
Developing and emerging implies that the country has made some progress and
expects to continue
The first geographic task is to identify where MDCs and LDCs are located
Geographers observe that MDC cluster in some spaces and LDCs cluster in others
Geographers also interested why some regions are more developed than others
Economic, social, demographic indicators distinguish regions of MDCs from regions of
LDCs
The scale of severe economic downturn that began in 2008 has illustrated the
globalization of the economy in the 21st century
Individual countries have seen their economies severely buffeted by close connections
to the global economy
Return to economic growth has taken advantage of local diversity in skills and
resources

Key Issue 1
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Country's level of development can be distinguished to three factors

a
Economic
b
Social
c
Demographic
Human Development Index (HDI)
a
Created by the United Nations
b
Functions of all three factors
c
Examining development indicators

Economic Indicators of Development

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To create HDI, United Nations selects one economic factor, two social factors, one
demographic factor revealing country's level of development
a
Economic factor is gross domestic product (GDP)
b
The social factors are the literacy rate and amount of education
c
The demographic factor is life expectancy
Highest possible HDI is 1.0 or 100 percent
Highest ranks are in Europe and include Canada
Highest HDI recently is Norways
a
0.971 in 2009
Lowest HDI in Niger
a
0.340
Thirty of the thirty two lowest ranking countries were in sub Saharan Africa

Gross Domestic Product Per Capita

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Average individual earns much higher income in MDC than in LDC

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Per capita income is a difficulty figure to obtain in many countries

Geographers substitute per capita gross domestic product
a
More readily indicator
GDP is the value of the total output of goods and services produced in a country
a
Year period
Dividing the GDP by total population measures the contribution made by the average
individual towards generating countries wealth
15-30 thousand increase in MDC and 1 to 4 thousand increase in LDC
Per capita GDP measures wealthy, not distribution
If only few people receive the GDP, standard of living may be lower than the average
figure implies
The higher the per capita, the greater the potential for ensuring that all citizens enjoy a
comfortable life

Types of Jobs
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Types of works, worker productivity, and availability of consumer goods are useful in
distinguishing between MDC and LDC
Average per capita is higher in MDC because people typically earn their living by
different mean in LDCs
Jobs fall into three types
a
Primary (agriculture)
b
Secondary (manufacturing)
c
Tertiary (services)
In primary sector
a
Directly extracting materials from earth through agriculture,sometimes by mining,
fishing, and forestry
Secondary Sector
a
Includes manufacturers that process, transform, and assemble raw materials into
useful products
b
Some fabricate them into finished consumed goods
TertIary Sector
a
Involves the provision of goods and services to people in exchange for payment
b
Retailing, banking, law education, and government
To compare the economic activities in LDC and MDC
a
Compute the contribution to GDP in these three sectors
i
Share of GDP accounted for by the primary sector has decreased in LDC, but
remains higher than in MDC
ii
The share of GDP accounted for by the secondary has decreased sharply in
MDC and is now less than LDC
iii
The share of GDP accounted for by the tertiary sector is relatively large in
MDC, and continues to grow

Productivity
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Workers in MDC are more productive than those in LDC

Productivity is the value of a particular product compared to the amount of labor
needed to make it
a
Can be measured by the value added per capita
The value added in manufacturing is the gros value of the product minus the costs of
raw materials and energy
Workers in MDC produce more with less effort due to having more access to machines,
tools, and equipment
Production in LDC rely on human and animal power
The larger per capita GDP in MDC in pays for the manufacture and purchase of
machinery
a
Generating ore wealth

Consumer Goods
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Part of wealth generated in MDC is used to purchase goods and revives

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Important is the relation to transportation and communications

Motor vehicles provide access to jobs and services to distribute the products
Phones enhance interaction of raw materials and customers for goods and services
Computers facilitate the sharing of info with other buyers and suppliers
Products that promote better transportation and communications are accessible to
virtually all resident in MDC and are vital to the convoy's functioning and growth
In LDC, the same products don't play a central role in daily life
a
Not essential
Technology innovations tend to diffuse from urban to rural areas
Access to goods is more important in urban areas bc of the dispersion of homes,
factories, offices, and shops
In MDC, number of telephones is 800-1000 inhabitants, motor vehicles 400, and
Internet 400
In LDC, figures are 200 telephones per 1,000 inhabitants, motor vehicles 20, and
Internet 100
Lower number show that people in LDC don't have as much access
Most of people are familiar of the products in LDC, even when they don't have them
Possession of consumer goods is not universal in LDC
a
A gap is created between the "haves" and "have nots"
Minority of the people who have these goods include government, business owners,
and other elite
a
Majority who lack them provoke political unrest
Technological change helps reduce gap between MDC and LDC in access to
communications

Social Indicators of Development

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MDCs use part of their greater wealthy to provide schools, hospitals, and welfare
services
a
People are better educated, healthier, and protected from hardships
b
Infants more likely to survive and adults live longer
c
More secure and economically productive

Education and Literacy

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The higher the level of development, the greater both the quantity and quality of a
country's educational services
Two measures of education where data is collected regularly are
a
Student teacher ratio
b
Literacy rate
Elementary/primary schools
a
Number of students per teacher exceeds 30 in most LDC
i
Less than 20 in most MDC
Fewer pupils for teacher - more personalized instructions
Literacy Rate
a
Is the percent of country who can read and write
b
Rate exceeds 98 percent in MDC, compared to less than 60 in LDC
MDC publish more books, newspapers, magazines due to higher rate
MDC dominate scientific and nonfiction publications worldwide
Student in LDC learn technical info from books that aren't even their native language
Usually book are printed in English, German, Russian, or French
In many LDC, education is the ticket to better jobs and higher social status
Improved education is goal in LDC
Education may receive higher percent of GDP in LDC, but their GDP is far lower to
begin with, resulting in spending less per pupil than do MDCs

Health and Welfare

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Healthier in MDC than LDC

a
Influenced by diet

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People in MDC receive more cronies and proteins daily than LDC such as African and
Asia
a
Who receive less than family minimum allowance of them recommended by
United Nations
Getting sick in MDC, we have resources
a
Expenditures on health care exceed 8 percent of GDP in MDC
b
Less than 6 percent in LDC
c
PUBLIC SERVICE AT LITTLE OR NO COST
d
Gov. Programs pay more than 70 percent of health care costs in most European
countries
e
Private indiv. Pay less than 30
i
55 percent payment of health care
Public assistance in MDC
Countries in northwestern Europe
a
Denmark, Norway, Sweden provide higher public assistance payments
Countries with public assistance have trouble maintaining them
a
More people need assistance
b
Gov faces choice to reduce benefits or increases taxes

Demographic Indicators of Development

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MDC display man geographic differences from LDC

The UN HDI utilizes life expectancy as a measure of development
Infant mortality, natural increase, CBR distinguish them

Life Expectancy
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More likely to live in MDC

Babies In LDC expected to live into their 60's
Gap in life greater for females than males
Males live 10 years longer in MDC than LDC
Females can expect to live 13 years longer
MDC have higher percentage of old people who have retired or received public support
and low percent of children under 15
The number of young people is 6 times higher than the number of older people in LDC
a
Two are nearly the same in MDC

Infant Mortality Rate

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Better health and welfare permit more babies to survive

94 percent of infants survive and 6 percent die in LDC
a
99.5 percent survive and fewer than one half of 1 die in MDC
Babies in LDC die of malnutrition or lack of medicines also poor education/medicine

Natural Increase Rate

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Average 1.5 percent annually in LDC compared to only 0.2 percent inMDC
Greater natural increase strains a country's ability to provide hospitals, schools, jobs,
and other services to help country be more productive
Many LDC allocate increase percent of their GDP to care for rapid expanding population
to improve care of current people

Crude Birth Rate

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LDC have higher natural increase rate bc higher CBR

Annual crude birth rate is 23 per 1000 in LDC COMPARED TO 12 per 1000 in MDC
Women in MDC choose to have fewer aegis from economic and social reasons
CD-R doesn't indicate society's level of development
CD-R is lower in LDC than in MDC, 8 per 1000 compared to 10 per 1000
Lower rate in LDC
a
Diffusion of technology for MDC eliminated or reduce disease
b
MDC have higher percent of older people who have high mortality, as well as
lower percentages of children who have low mortality rates once they survive
infancy

Key Issue 2/Where are MDC'S and LDC's Distributed?

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Countries of the world can be categorized into 9 major regions

a
North america, Europe, Latin America, east Asia, southwest Asia, Southeast Asia,
Central Asia, South Asia, and sub Saharan Africa
b
Other areas include Japan, Oceania, and Russia
c
Distinctive and cultural characteristics
d
Differing wealthy, earning living, economic characteristics
e
Geographers concerned with similarities and differences in the economic patterns
of the various regions

More Developed Regions

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North America and Europe are considered more developed

The distribution of more and less developed countries reflects their global pattern
The division of the world between more and less developed and developed countries is
known as the north-south split
a
Shows up on maps measuring development
i
Such as HDI
b
MDC'S in north have high HDI and southern countries have lower indexes

North America: HDI 0.95

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US Ranked only 13th in HDI in 2009

a
Near top in two of four indicators being GDP per capita and literacy rate
i
But lower than number of other countries in education and life expectancy
1
Education drop out rate in high school
2
Low income family not lasting as lost
North America used to be top manufacturer of steel, automobiles, and other goods
a
Now Japan and Europe as well as LDCs led by China have eroded the region's
dominance
b
American still remains leading consumers and world largest market
c
When economic loss of manufacturing, still able to hold world's highest
percentage of tertiary sector employment
Large number of health care providers is results of service provided primarily by
private sector in the US
a
Providing entertainment, and leisure time
Subprime loans with high interest lead people unable to pay them
Financial risk
North America world's leading food exporter
In some aspect of producing or serving food

Europe: HDI 0.93

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During Cold War era between 1940's and 1990's, Europe was regarded as two regions
a
Democratic west closely linked economically
b
Military with the united state and communist east linked to the Soviet Union
c
Now these two parts close, and treated as single world region
Elimination of economic barriers helps Europe be largest and richest market
European countries hold 15 of 19 highest HDI rankings
Level of development is world's highest in a core area including
Western Germany, NE France, northern Italy, Switzerland, souther scandinavia,
southeastern UK, Belgium, the nethlands, and Luxembourg
Dependent on international trade
Provide high value goods around the world
Government officials accused of protecting jobs in their individual countries rather than
EU
Southern and Eastern Europe, unemployment rates have been double the regional
average
European government have limited government spending because thy fear high
inflation once economy recovers

Russia: HDI 0.73

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Under communism, Soviet Union had centrally planned economy

Five year plans prescribed production goals for entire country by economic sector and
region
Specifications of certain types and quality of materials, manufactured goods, and
agricultural commodities to be built for certain parts of the country
Dissolution of SU in 1991, Russia went into market economy
a
Painful transition
b
Unemployment soared as inefficient
c
Russian gangster's became very rich
d
HDI declined from more than 0.9 to below 0.8 after 2000
In 21st century, experienced economic growth, fueled by escalating productions of oil
Severe worldwide recession causes drop in demand
Renewed decline in HDI

Japan: HDI 0.96

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From perspective of LDC's, economic influence wielded by these two regions closely
intertwined with global influence of European and American cultura
Japan has third area of high HDI
Extremely unfavorable ratio of population to resources
Industrial power due to taking advantage of large population and work them at low
wages
Specializes in high quality, high value products
Concentrating resources in rigorous educational system and training program to create
a skilled labor force
Japan companies spend twice as much as US firms on research and development, and
government provides more assistance in new products and manufacturing processes

Oceania: HDI 0.90

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Relatively marginal in global economy because of its small number of inhabitants and
peripheral location
Sparsely inhabited
Islands less developed
90 percent of residents are descendants of 19th century British settlers
Indigenous populations remain
Australia is leader in mining minerals
a
Iron ore, lead, manganese, nickel, titanium, and zinc
Australia and New Zealand net exporters and other resources
Economies tied to Japan and other Asian countries

Less Developed Regions

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Seven classified as less developed

a
Level of development widel varied
Latin America has highest HDI Amon
Behind is east Asia, Southwest Asia(with North Africa), Southeast Asia, and Central Asia
a
South Asia and sub Saharan African behind others

Latin America: HDI 0.82

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Highly concentrated along south Atlantic coast between Curitiba, Brazil, Bueno Aires,
Argentina, large urban areas such as Rio de Janeiro and So Paulo, Brazil, and Buenos
Aires
Latin Americans more likely to live in city
Neighborhoods in large cities enjoy level of development comparable to that of MDC
Coastal area high GDP per capita
Interior tropical forest are destroyed to sell the timber or clear land for settled
agriculture
Development hindered by inequitable income distribution
Handful of wealthy families control much of land and rent parcels to individual farmers
Many tenants grow coffee, tea, and fruits for export rather than domestic consumption
Economy closely linked to USA

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Dependent on trade
Global recession hit them too

East Asia: HDI 0.77

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Driven by China
Behind united state in economy
China has become 2nd largest market and manufacturer
Most populous country
1/3 world GDP
Since old nationalist government fled to the island of Taiwan, China economy changes
occurred
Under communism, suffered from starvation
a
Government took control of land for agriculture
Worlds largest market for consumer goods
In partnership with Walmart
Middle management is weak, quality control is minimal, banking is primitive, legal
protection is inadequate
Rapid development is straining resources
Increase share of world's pollution

Southwest Asia and North Africa: HDI 0.74

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Mostly desert with concentration of plant and animal life

Imports most products
Oil rich
Large gap in per capita income between petroleum rich countries and those that lack
resources causes tensions
Island is 95 region dominated
a
Conflicts with business practices in MDC
United Nations considers development among oil states to be lower than region's
wealth would support
Challenge is promoting development without getting rid of traditional cultural values of
Islam
War disputes
Terrorism

Southeast Asia: HDI 0.73

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Most populous country is Indonesia

a
13,667 islands
b
Others are Vietnam an Thailand and Philippines
Tropical climates with intense cultivation of most grains
Heat continuous, rainfall high, vegetation dense
Development limited
2/3 of pop live on Java because of soil
Focus on harvest products used in manufacturing
Regions use a lot of palm oil and copra (coconut oil), natural rubber, kapok (fibers from
ceiba tree used for insulation and filling), and abaca (fibers from Banana leafstalks
used in fabrics and ropes)
Large percent of petroleum reserves
Rice exported from India, Malaysia, Thailand
Continuous warfare
To restore economic growth, forced to take painful reforms to reduce standard of living

Central Asia: HDI 0.70

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Once part of Soviet Union

Development high in Kazakhstan and Iran
a
Lead in petroleum
Shiite leaders in control of Iran use oil money for revolution to sweep developments
from Europe and North America
Minerals and agricultural products are their principal economic resources

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Afghanistan has world's lowest HDI

South Asia: HDI 0.61

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India, Pakistan, Bangladesh, Sri Lanka, and small Himalayan states of Nepal and
Bhutan
World's second highest population and second lowest per capita income
Population density is very high and natural increase rate is among highest
Overall ratio of population to resources in region is unfavorable because of huge
population to resources in region is unfavorable
Beneficiary to green revolution
Miracle rice and wheat seeds diffused through South Asia
Agricultural declines when monsoons arrive
Indian is largest
a
Fourth largest economy
b
Leader producer of jute , peanuts, sugar cane, tea, and mineral reserves
c
Leading rice and wheat

Sub-Saharan Africa: HDI 0.51

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Divided into countries of north of Sarah's sharing economic and cultural characteristics
with SW Asia and south is desert of subsaharan Africa
Major source of minerals
Regional wealthy is comparable to levels found in other MDC
Least favorable prospect for development
Suffer poor education an Healthy
Landlocked states suffer most
Political problems occurring when concerted to states without distribution of ethnicity
varied correctly
Retarded development
Dramatic imbalance between number of inhabitants and capacity of land to feed
population
Tropical or dry climate
Highest rate of natural increase
Land more overworked, and agricultural output as declined

KEY ISSUE 3/ Where Does Level of Development Vary by Gender?

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A countries overalll level of development masks inequalities in the status of men and
women
Gender equality exists in every country in the world
United Nations created two indexes
a
GDI Gender Related Development Index
i
Comparing women's development with that of both sexes
b
GEM Gender Empowerment Measure
i
Compares ability of women and men to participate in economic political
decision making

Gender Development Index

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GDI combines the same indicators of development used in the HDI

a
Reflects differences in accomplishments and conditions of men and women
i
Economic indicator of gender differences
1
Per capita female income as a percentage of per capita male income
ii
Social indicators of gender differences
1
number of females enrolled in school compared to number of males
and percent of literate females compared to percent of literate males
ii
Demographic indicator of gender differences
1
Life expectancy of females compared to males
Penalizes a country for having a large disparity between well being of men and women
A country with complete gender equality would have a GDI of 1.0
High GDI means both men and women have a high level of development

Low GDI mean women have a low level of development and the level is substantially
below that of men

Gender Empowerment
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GEM measures the ability of women to participate in the process of achievement

improvements in their status
a
Achieving economic and political power
b
Both MDC and LDC fewer women than men hold positions of economic and
political power
c
Combines two indicators of political power
i
Economic indicators of empowerment
1
Per capita female income as a percentage of per capita male income
and percentage of professional and technical jobs held by women
ii
Political indicators of empowerment
1
Percent of administrative jobs held by women and percentage of
members of the national parliament who are women
A country with complete equality of men and women have 1.0
a
Highest in MDC is north America, northern Europe, and Oceania
b
Lowest in africa and asia
A higher GDI comapred to GEM means that women possess a greater share of
country;s resources than they do power over allocation of those resources
Reflecs sharp differences in the level of development of MDC and LDC
a
Promoting develppment

KEY ISSUE 4 / Why do LDC's Face obstacles to development?

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To reduce disparities between rich and poor countries, LDC must develop more rapidly
Increasing per capita GDP rapidly and using the additional funds to make more rapid
improvements in social and economic conditions
LDCS face these two obstacles
a
Adopting polices that successfully promote development
b
Finding funds to pay for development

Development Through Self Sufficiency

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LDC choose one of two models

a
Emphasizing international trade
b
Other advocates self sufficiency
i
Each has issues
For most of 20th century, self sufficiency, was more popular of the development
alternatives
China and india adopted this strategy and most African and eastern European did also

Elements of Self Sufficiency

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According to self sufficiency approach

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Country shall spread investment as equally as possible across all sectors of its
economy and in all regions
Insulation from potentially adverse impacts of decisions made by businesses and gov
in MDC encourages a country's fragile business to achieve independence
Three widely used barriers include
a
Setting high taxes on important goods, make them more expensive than domestic
goods
b
Fixing quotas to limit the quantity of imported good
c
Requiring licenses in order to restrict the number of legal importers
India made effective uses of many barriers
a
Import goods into India
b
Imposed heavy taxes on imported goods
c
Discouraged from producing goods for export
Effectively cut off from world gave them a chance to create their own product,
modernize factories, change job classification
Most businesses left to the private sector

Problems with the Self Sufficiency Alternative

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Experience with India and other LDCs with self sufficiency showed theses issues
a
Protection of inefficient businesses
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Little incentive to improve quality
b
Need for large bureaucracy
i
Encouraged abuse and corruption

Development Through International Trade

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According to international trade approach

a
Country can develop economically by concentrating scarce resources on
expansion of its distinctive local industries
b
Sale of these products can be used to finance other development

Rostow's Development Model

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W.W. Rostow lived in the 1950's and proposed a five stage model of development
a
Traditional society
i
High percent engage in agriculture and natural wealth into military and
religion
b
Preconditions for takeoff
i
Elite group initiates innovative economic activities
b
The takeoff
i
Rapid growth is generated in a limited number of economic activities
b
The drive to maturity
i
Modern technologies confined to a few takeoff industries which experience
rapid growth
b
Age of mass consumption
i
Heavy industry
In international trade model
a
MDCs are stage 4 ot 5
b
LDC are in one of the three ealier
c
Model assumes that LDCs will achieve development by moving along from earlier
to a later stage
d
Today's MDCs passed through the early stages in the past
A country that concentrates on international trade benefits from exposure to
consumers in other countries
Model based on the factors of in the second half of 20th century MDCs in Europe and
North America were being joined by others in Southern and Eastern Europe and Japan
a
If they could become more developed by following this model, why cant others?
Also many LDCs contained an abundant supply of raw materials sought by
manufacturers and producers in MDCs
In global economy, the sale of these raw materials could generate funds for LDCs with
which they could promote development

Example of the International Trade Approach

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Most LDC chose this approach in middle of 20th centuyry

Lacking many resources, four dragons promoted development by concentrating on

producing a hadnful of manufacturment goods
Low labor costs enabled these countries (South Korea and Taiwan)

Four Asian Dragons

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Petroleum Arabian Peninsula States

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Arabian peninsula, including Saudi Arabia

a
Regions most populous country and largest
i
Including Kuwait, Bahrain, Oman, United Arab Emirates
b
Transformed into wealthiest thanks to escaping petroleum price during 1970
Have used petroleum to finance large scale projects, such as housing, airports,
universities, telecommunication, etc
Helped with gov subsidies
Large motor vehicles, color tv, audio equipment, and motorcycles are readily available

Supermarkets stocked with food imported from Europe and North America

Prom with the International Trade Alternative

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Outside the four Asian dragons and Arabian peninsula from developing international
trade approach
a
Uneven resource distribution
b
Increase dependence on MDCs
c
Market decline

International Trade Approach Triumphs

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In 20th century, most countries push for international trade approach for stimulating
development
Trade has increased more rapidly than wealthy (measured by GDP)
a
Measure of growing importance international trade approach
Advocates of the self sufficiency approach converted to international trade Appalachian
during 1990s
a
India dismantled its borders to international trade
i
Foreign companies allowed to set up factories in India
ii
Tariffs and restrictions on the import and export of goods were reduced ore
lei ain't die
iii
Monopolies in communications, insurance, and other industries were
eliminated
iv
With increase competition, Indian companies improved the quality of their
products
During self sufficiency, Indians auto industry controlled by Maruti-Udyog Ltd
a
Captured more than 80 percent of Indian market selling cars that were out of date
in other countries
b
Government sold control of maritu to Suzuki, now 40 percent of Indian market
Converted for overwhelming evidence that it's better for trade and promoted
development

World Trade Organization

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To promoted international trade development model, countries representing 97 percent

of world trade establish the WTO
a
World trade organization in 1995
i
REDUCE trade barriers in two ways
1
Countries negotiate reduction or elimination of international trade
restrictions on manufactured goods
2
Reduced or eliminated are restrictions on international movement of
money by bank, corporations, and wealthy in individ.
Promotes international trade by enforcing agreements
Authorized to rule on validity of charge to order remedies
Protects intellectual property in age on Internet
Order legal action with patents
Sharply attacked by critics
Conservatives charge that the WTO compromises the power and sovereignty of
individual countries because it can order change sin taxes and laws that it considers
unfairly trading practices

Foreign Direct Investment

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Investment made by foreign company in the economy of another is foreign direct

investment (FDI)
Declined with 9/11
Does not flow equally around the world
Only 1/4 of foreign investment in 2007 went from a MDC to LDC
More than 1/3 of all FDI destined for LDCs went to China in 2007, 1/3 to asian countries,
1/5 to all Latin American countries, and 1/10 to all African countries
Major sources of FDI are transitional corporations

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TNC transnational Corp. invest and operate in countries other than the one in which its
headquarters are located
Of the 500, 140 in US and 163 in Europe

Financing Development
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LDC lack money for development, so must receive support from MDC
a
Loans from banks and international organization
b
Direct investment by TNC

Loans
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The world Bank

a
Includes the international bank of reconstruction and development (IBRD) and
international development association (IDA)
b
IBRD provides loans to countries to reform public administration and legal
institutions, develop and strengthen financial institutions, and implement
transportations and social service projects
c
IDA provides support to poor countries too risky for these loans
d
IRBD has loaned 400 billion since 1945
i
Mainly to Europe and Latin America
b
IDA about 150 billion to Asia and Africa
c
IRBD lends money raised from sales from bonds of private investors
The IMF International Monetary Fund
a
Provides loans to countries experiencing balance of payment issues that
threatens their international trade
b
Stabilize currency and pay for imports
c
Not for specific projects
Both for economic recovery after WW2
LDC used them for new infrastructures
a
Attracting business
World bank failures in Africa
a
Projects don't function as intended because of faulty engineering
b
Aid is squandered,s token, or spent on armaments by recipient nations
c
New infrastructure does not attract other investment
Inability to pay loans affect MDC banks

Structural Adjustment Programs

I
II

II
III
IV

II

IMF, WORLD BANK, AND MDC fear that granting, canceling, refinancing debits without
string with give bad habits to LDC
Before granting debt relief, LDC is required to prepare a Policy Framework Paper (PFP)
a
Outlined a structure adjust program
i
Economic goals, strategies for achieving the objectives, and external
financing requirement
Structural adjust programs include economic "reforms" and "adjustments)
Critics say poverty worsens under these programs
Structural reforms allegedly punish Earth's poorest people for action they did not
commit
a
Waste
b
Corruption
c
Misappropriation
d
Military build ups
IMF and WB encourage innovative programs to reduce poverty and corruption and
consult more average citizens
a
Safety for poor people

Fair Trade
I
II

Products made and trade according to standards that protect workers and small
businesses in LDCS
Standards set by Fairtrade Labelling Organization International (FLO)
a
Nonprofit, transFair USA, certifies products sold in US that are fair trade

II
III
II
III

In N.A. Most fair trade products such as decorate home accessories, jewelry, textiles,
ceramics
Ten thousand villages is the largest fair trade organization in NA
a
Specializing in handicrafts
In Europe most fair trades are food
One set applies to workers on farms and in factories and other to produces

Fair Trade Producer Standards

I
II
III
IV

Fair trade advocates works with small business

a
Especially worker owned and democratically owned Corp.
Cooperatives that benefit local farmers and artisans who are members maximize
profits
Safe and healthy working conditions promet
Fair trade cuts cost
a
Factor in environmental cost

Fair Trade Worker Standards

I
II
III
IV
V
II
III

Critics of international trade charge that only a tiny percentage of the price a consumer
pays for a good reaches the individual in the LDC responsible for making or growing it
Protection of workers rights s not a high priority in the international trade development
approach
Minimal oversight in LDCS
Fair trade requires employers to pay workers fair wages, permit Union organizations,
and comply with minimum environmental and safety standards
Cooperatives are encourage to reinvest profits back into the communities
a
Providing health clinics, child care, and training
Fair trade bypass middleman
Cost remains same as traditional traded goods but distribution of cost of product is
different because the large percentage taken by the middle man from the equation