Development Geography: HDI and Living Standards

• Development signifies the enhancement of living conditions through the spread of knowledge and technology.
• Developed countries (MDCs) have advanced significantly in their developmental journey.

Human Development Index (HDI)

• The HDI is a metric used by the UN to gauge a country's development level, incorporating income, education, and life expectancy.
• The UN's HDI assesses development based on:
  • Standard of living
  • Health and longevity
  • Access to knowledge.
• The nine developmental regions, ranked by HDI from highest to lowest are:
  • North America
  • Europe
  • Latin America
  • East Asia
  • Southwest Asia and North Africa
  • Central Asia (tie)
  • Southeast Asia (tie)
  • South Asia
  • Sub-Saharan Africa

Standard of Living

• Having enough wealth for a decent standard of living is key to development.
• Developed nations generally have much higher average incomes compared to developing ones.

Economic Terms

• Gross National Product (GNP): The total value of goods and services produced by a country in a year, equal to the gross domestic product plus the net income from foreign investments.
• Gross Domestic Product (GDP): The total value of all goods and services produced within a country's economy in a year.
• Gross National Income (GNI): The value of goods and services produced in a country annually, including income entering and leaving the country.
• Per Capita GNI: A country's GNI divided by its population.
• Purchasing Power Parity: The amount of money needed to buy the same goods and services in different countries.
• Primary sector's share of GNI has decreased in developing countries but remains higher than in developed countries.
  • A low share in developed countries indicates high agricultural productivity with fewer farmers.
• The secondary sector's share of GNI has significantly decreased in developed countries and is now lower than in developing countries.
• The tertiary sector's share of GNI is relatively high in developed countries and is growing in developing countries.

Access to Knowledge

• Development includes improvements in health, knowledge, and wealth.
• Years of schooling is considered a critical measure of access to knowledge.

Health and Wealth

• Good health is a vital development measure.
• Development aims to provide nutrition and medical services for longer, healthier lives.
• Life expectancy at birth and infant mortality rate are relevant health indicators.
• Wealth in developed countries is used to purchase goods and services, especially in transportation and communications, like vehicles, telephones, and computers.

Unequal Development

• The Inequality-adjusted Human Development Index (IHDI) measures inequality within a country:
  • Equal HDI and IHDI indicate perfect equality.
  • A lower IHDI than HDI signifies inequality; the greater the difference, the greater the inequality.
  • Developed countries have the smallest gap between HDI and IHDI.

Gender Inequality

• The Gender-related Development Index (GDI) measures gender gaps in income, education, and life expectancy.
• The Gender Inequality Index (GII) measures gender inequality in reproductive health, empowerment, and the labor market.
• Female labor force participation rate is the percentage of women in full-time jobs outside the home.
• Maternal mortality rate is the number of women who die during childbirth per 100,000 births.
• Adolescent fertility rate is the number of births per 1,000 women aged 15-19.
• Reproductive health is included in the GII because universal access to reproductive control reduces the number of children women have and improves maternal and child health.
• Developing regions have higher rates of maternal mortality and teenage births.
• Countries offering comprehensive reproductive health options generally have very low fertility rates.

Two Paths to Development

• Self-Sufficiency Path:
  • Encourages domestic production and limits foreign ownership to protect from international competition.
  • Uses barriers like high taxes and import limits.
  • Isolates from competition with large international corporations.
  • Spreads investments equally across all sectors and regions.
  • Aims to keep rural incomes in line with urban incomes, prioritizing poverty reduction over creating wealthy consumers.
• India, after gaining independence in 1947, limited foreign companies, required licenses for imports (subject to government approval), imposed heavy taxes on imports, restricted currency conversion, required government permission for business activities.

International Trade Path

• Involves opening up to foreign investment and international markets.
• Has become popular since the late 20th century.
• Focuses on identifying unique economic assets and concentrating resources on expanding distinct local industries.

The Rostow Model

• Rostow's model (1950s) is an example of the international trade path, outlining five stages of development:
  • Traditional Society
  • Preconditions for takeoff
  • Takeoff
  • Drive to maturity
  • Age of mass consumption.
• The Four Asian Dragons (South Korea, Singapore, Taiwan, Hong Kong) were among the first to adopt this path by producing manufactured goods (clothing/electronics) due to their cheap labor.
• Petroleum-rich Arabian Peninsula states (Saudi Arabia, Kuwait, Bahrain, Oman, UAE) became wealthy due to high petroleum prices starting in the 1970s, enabling them to develop infrastructure and services.

World Trade

• The World Trade Organization (WTO), established in 1995, aims to reduce international trade barriers by:
  • Negotiating the reduction or elimination of trade restrictions on manufactured goods.
  • Enforcing international trade agreements.

Financing Development

• Foreign direct investment (FDI) is investment made by a foreign company in another country's economy.
• Major Lenders to Developing Countries:
  • World Bank: provides loans to reform public administration, strengthen financial institutions, and implement transportation and social service projects.
  • International Monetary Fund: provides loans to countries with balance-of-payments issues that threaten international trade.

Development Challenges

• Stimulus vs. Austerity:
  • Stimulus: governments should spend more money than they collect in taxes during downturns.
  • Austerity: governments should sharply reduce taxes so that people and businesses can revive the economy.
• Structural Adjustment Program (SAP): includes economic reforms like fiscal goals, strategies, and external financing needs.
  • Reforms may include: limiting spending to what can be afforded, targeting benefits to the poor, shifting investment from military to health and education, investing resources where they will have the most impact, encouraging a productive private sector, reforming government for accountability and transparency.
• Microfinance: provides small loans and financial services to individuals and small businesses in developing countries.

Progress in Development

• Fair Trade: aims to provide greater equity to workers, small businesses, and consumers by focusing on products exported from developing to developed countries.

Fair Trade Goals

- Raises incomes for small-scale farmers and artisans by cutting out intermediaries.
- Distributes profits and risks fairly among producers, distributors, retailers, and financiers.
- Enhances entrepreneurial and management skills of producers.
- Promotes safe, sustainable farming and working conditions (e.g., prohibiting dangerous pesticides and herbicides and promoting organic crops).

• Criticisms of international trade development:
  • Oversight of workers' conditions by governments and international agencies is minimal.
  • Workers may face long hours, poor conditions, and low pay, with potential for child or forced labor.
  • Health problems may arise from poor sanitation and inadequate safety precautions.
  • Injured, ill, or laid-off workers may not receive compensation.
• Fair Trade Requirements:
  • Fair wages for workers.
  • Workers' rights to organize unions and engage in collective bargaining.
  • Protection of workers by high environmental and safety standards.
• Cooperatives are beneficial for farmers because they:
  • Can qualify for credit to buy equipment and improve farms.
  • Can purchase materials at lower costs.
  • Allow for democratic management of resources and ensure safe working conditions.
  • Reinvest profits in the community.

Measuring Progress Since 1980

• HDI: The gap between developed and developing countries has narrowed, with developing regions experiencing more rapid increases.
• GNI per Capita: Increased much more rapidly in developed countries.
• Education: Mean years of education have increased by the same amount in both developed and developing countries.
• Life Expectancy: Increased by about the same number of years in both developed and developing countries.

Explore development geography focusing on the Human Development Index (HDI) and standards of living. Learn how the UN uses HDI to measure development, considering income, education, and life expectancy. Discover the variations in HDI across different regions and the importance of wealth in achieving higher living standards.