Real Concept of Development

Chapter 1: Real Concept of Development

• Economic problems exist in every nation, regardless of wealth, due to limited resources and unlimited human wants.
• In less developed countries, basic needs like food, clothing, and shelter often cannot be met.
• Economic systems must address what goods to produce, in what quantities, how to produce them, and for whom.
• Development requires the proper application of inputs like fertilizers, insecticides, irrigation, and technology to increase output.
• Economic development occurs when emerging economies become advanced, resulting in higher living standards.
• It involves improvements in overall health, well-being, and the academic level of the general population.
• A shift from agriculture to industry and then to services occurs.
• Results in extended life expectancy, increased productivity, higher literacy rates, and improved public education.
• Economic development is ultimately about improving living standards.
• Improved living standards encompass higher education, literacy, income, health, and lifespans.

Economic Development vs. Growth

• Economic growth focuses on expanding GDP, making the economy bigger.
• GDP (Gross Domestic Product) measures the total economic activity in a nation over a specific period.
• Development considers statistics beyond GDP, including GDP per capita, which is GDP divided by the population.
• Key factors in economic development are average life expectancy, education and literacy rates, environmental standards, housing availability and quality, healthcare access, and income per capita.
• While economic growth is important, it alone cannot guarantee development.
• Amartya Kumar Sen defines economic development as creating freedom, removing obstacles like poverty, lack of opportunities, corruption, poor governance, lack of education, and poor health.

Classification of Countries

• No universally accepted method exists for classifying a country's level of development.
• The World Bank classifies economies based on gross national income (GNI) per capita.
• GNI is converted to international dollars using purchasing power parity rates.
• World Bank Income Classifications:
  • Low income: $1,025 or less.
  • Lower middle income: 1,026to1,026 to 1,026to4,035.
  • Upper middle income: 4,036to4,036 to 4,036to12,475.
  • High income: $12,476 or more.
• Low- and middle-income economies are "developing," while upper-middle and high-income economies are "developed."
• Terminology use is for convenience only and doesn't imply similar development experiences within groups or a final "stage" being reached.
• The IMF's country classification criteria include per capita income level, export diversification, and integration into the global financial system.
• The IMF classifies countries as Advanced, Emerging, and Developing Economies.
• Advanced Economies include Euro Area, Major Advanced Economies, Newly Industrialized Asian Economies, Other Advanced Economies, and the European Union.
• Emerging and Developing Economies in Central and Eastern Europe, Commonwealth of Independent States, Developing Asia, ASEAN, Latin America and the Caribbean, Middle East and North Africa, Sub-Saharan Africa.

Summary of Concepts

• Development is progressive and dynamic, serving as a necessary process to enable growth.
• Economic growth is visible and measurable, with examples including infrastructure and services.
• GNP (Gross National Product) reflects the total market value.
• Economic development is continuous, creating more and better goods and services, and incorporating long-run economic growth.

Chapter 2: Ideas and Theories of Economic Development

• Economic ideas and theories are products of their time and place.
• This chapter explains various important economic ideas and theories of development from ancient times to the present, alongside growth models.

Ancient Economic Ideas

• Ancient economic ideas which centered on ways of making a living were based on Holy Scriptures and code of laws.
• Plato's important works in the study of economics are Nomoi, Politeia, and Politikos (Backhaus).
• Plato valued mind, body, and estate in that order of importance.
• Plato distinguished between necessary things and luxuries.
• Plato promoted temperance in wealth pursuit to preserve order.
• He advocated for a state formed with specialized skills.
• Aristotle's Politics analyzed forms of a state, critiquing Plato's philosopher-kings and that resources should be allocated as a moral issue.
• He believed consumption was the objective of production.
• Personal satiation ought to be a natural limit of consumption.
• Natural transactions satisfied needs, while unnatural transactions aimed for monetary gain.
• He rejected usury and discussed justice in distribution and exchange.
• Xenophon's work showed Babylonian and Persian thought influence and discussed economic principles were present in works like Oeconomicus, Cyropaedia, Hiero, and Ways and Means.
• Ways and Means showed an understHiero discussed leaders stimulating production with public recognition.
• anding of economies of scale advocating for laws promoting foreign merchants.
• The Oeconomicus discussed agricultural land administration, analyzing subjective personal value of goods versus exchange value.

Medieval Economic Thought

• Feudalism, with agriculture as livelihood source, peaked in the Middle Ages in Europe.
• Merchant class wealth and power grew during the rebirth of trade in the Mediterranean.
• The church became more active in political and economic affairs.
• Aquinas presented a comprehensive philosophical system independently discerning human knowledge in reason and theology.
• He acknowledged philosophy's significance with its own goals.
• Aquinas drew inspiration from Christian, pagan, Jewish, and Muslim authors.

Economic Doctrine of Mercantilism

• Thinkers like Machiavelli, Bodin, and Serra asserted state supremacy, influencing capitalism's growth.
• Economic development was focused on the vital role of the state.
• That the state has a duty to create and accumulate wealth.
• Foreign trade's benefit as silver and gold importation.
• Nations constantly at war saw gold and silver depletion as beneficial.
• Thomas Mun believed a nation's wealth is held in gold reserves.
• Governments should regulate trade to export more and gain gold.

Physiocracy -Rule of Nature

• The doctrine of François Quesnay (and his unacknowledged collaborator Victor Riqueti, marquis de Mirabeau) means rule of nature first used in 1767.
• Quesnay changed what economics studies the management of social households to the science of wealth.
• Detaching economics from sociopolitical order and making process to reflect natural law.
• Quesnay supported free markets studying England but also the need for individual behavior.

Laissez Fair Theory

• Laissez-faire is a French term meaning non-interference, liberty, or freedom in economics, a staple of free-market capitalism.
• The economy is strongest when the government does not intervene.
• The government’s role is to protect individual rights, with no taxes, regulations, or tariffs.
• The market should be led by supply and demand.
• It started in 18th-century France during the Industrial Revolution and Adam Smith was a proponent of the idea in writings like ‘Wealth of Nations'.

Classical Theories

• The theories of economic behavior and performance have developed down the lines of classical ideas including the ones from Marxist.
• They were models which explained such economic phenomena as wealth creation, value, prices, and growth from a separate intellectual and cultural setting.
• Power of the market system descended from Adam Smith ensures full employment and automatic adjustments occur if there is change.
• Theory rests on the view that everyone maximizes his or her happiness in the best way possible where interdependencies exist in markets.

Theory on Population

• English economist and demographer Malthus theorized that population growth tends to outrun the food supply with betterment of humankind being impossible unless reproduction is controlled.
• Malthus' Malthusianism in An Essay on the Principle of Population saw three factors for controlling population.
• Factors include war, famine, and disease dubbed “positive checks” to increase mortality.
• These factors are countered by “preventive checks,” such as celibacy an birth control which also control the population but by reducing fertility rates;
• His thinking was that people could produce only so much food each year, however the population would continue to grow expotentially.

Theory of Comparative Advantage

• 19th-century British Economist David Ricardo developed economic theory Comparative Advantage.
• Comparative advantage attributed the benefits of international trade to varying costs. Ricardo's based theory on the labor theory of one country can producing everything, and the theory was argued against trade.
• Argued that countries can gain by specializing in goods with comparative advantage

Theory of Progress and Poverty

• Henry George secured state gas meter.
• The 1870s America was experiencing wealth disparity and rising poverty for him. George theorized that what material progress is in nowise to improve the condition of the lowest class and that it is being crushed by progress.

Keynesian Theory of Employment

• British economist John Maynard Keynes developed Keynesian economics in response to the Great Depression.
• Keynesian economics focuses on changes in the economy over the short run.
• Based on his theory, Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression.

Innovation theory

• Schumpeter theorized that an entrepreneur could earn economic profits by innovatating.
• According to Schumpeter, innovation meant any new policy that reduces overall production costs and the entrepreneur gains when they either cut costs, or increase demand.
• Competitors imitate the innovation and with after some time, the profits started disappearing.

Summary - Ideas and Theories of Economic Development

• Theories were designed to improve conditions.
• That bright ideas help emergence.
• Good ideas will help a nation be progressive.
• Some ignore the people of their own ideas, and prefer to imitate rich countries.

Chapter 3: Determinants of Economic Development

• Economic factors alone don't determine economic development instead non-economic factors have the greater influence. Economic factors are including capital, technology, and market, and non-economic factors include government, religion, education, social structure, values, culture.
• Economic issues need economic solutions or else economic development does not come up to par and remains unsolved.
• Attitudes of those who administer plan and implement a project influence development.

Capital

• Capital goods are tangible assets (plant and machinery) for producing goods and services.
• Capital goods need big investments early improve future production and growth.

Technology

• Its role: Technology's encompasses a huge body of knowledge and tools that ease the use of economic resources to produce goods and services effectively and innovatively.
• Technological progress is essential to economic growth and development for quickly improvement.

Social Structure

• Roles: Social factors are to be recognized, since social factor includes various social institutions such as the family, class structure, caste, religion, traditions, attitudes, beliefs, and culture etc.
• Economic and non economic relationships in human compartmentalize are difficult, because the economic inter play is result of interplay, though there significant, Social factors are more dynamic and powerful for economic development,

Family System

• The family is a basic unit which provides care, is the main way of socialization of children, key to transmission of values from one generation, and made within the arena regarding economic and demographic behavior. The organization of family units shown.

Cultural Values

Cultural factors like achievement and thrift affect model of economic growth. Culture can generate that contribute to the social and economic well-being of a community. Both culture and values will shape economic development. Economic performance depends on values which involves questions about the nature of virtue, goodness, and duty and cultural heritage maintains that integrity is preserved.

Political Conditions

• When the political system is stable, the operations get less risky.
• The political-legal environment is a combination of a lot of factors such as the current political climate and government policies.

Corruption

• Affects economic development, increasing income inequalities and undermining the effectiveness of many avenues. Corruption causes distorted incentives and market forces and leads to the misallocation of resources.

Religion

• Increases happen but only for some beliefs - notably heaven, hell and the afterlife will the economy tend to increase in growth. Community is encouraged to base development choices to people by encouraging human rights.

Population

Positive or Negative depending on the circumstances. Positive for the economic- development as there is more work getting done creating more value.

Geography

• Geographic location has an impact on a countries geography and climate.
• Poorest countries are where conditions are tropical - with hot climate and scarce water.
• Also it is an advantage to have natural resources when developing.

Summary - Determinants of Economic Development

• Highlight was include: Economic growth is influences by direct factors: Human-resources and investments,
• Natural resources Determinants of economic growth: Human and Natural resources Capital formation- and Technology

Chapter 4: Philippine Economic Development

• This chapter describes economic pre-colonial times, contrasting it with with today's economic development.

Pre-Colonial Era (900s–1565)

• Before the Spaniards, the archipelago was known to Chinese traders and trades also occurred with Arab traders.
• In 1570 Spanish started a trade triangle Pacific, the three trade areas being Acapulco, Manila and Canton.
• Chinese were essential, however external relations were undermined.
• Consisted of kingdoms oversaw merchants trading for items like gold and rice with a vast barter system.
• Luzon had a vast output of rice, fowls and wine, and other products were also extracted such as cotton and colored clothes, wax, honey and date palms. The Philippine archipelago also had merchants, such as The Nation producing and trading with East Asia.
• Maynila and Tondo established a shared monopoly early in sixteenth to trade Chinese goods.
• The ocean was widely used and Kingdoms were also active in international trade.

Spanish Era, New Spain (1565–1815)

• Philippines already had a great economy when Spanish came over who later inaugurated the Manila Galleon trade system Voyages occurred in New Spain from Acapulco and Manila of people.
• Improved the growth of the economy in the years as city thrived off of trade. The trade included foods foodstuffs such as maize, tomatoes, potatoes, chili peppers, chocolate and pineapples in Mexico and Peru.
• Philippines became distribution center with spices and silks.
• This was until Mexico got its independence.
• Royal Philippine Company 1785 Chinese and Indian goods shipping company.

Spanish East Indies (1815–98)

• Spanish East Indies occurred after the Spanish lost Mexico as their territory.
• The people started seeing more opportunities with growth.
• Agriculture was largest contributor, exporting in coffee and tobacco.
• Europe's Industrial Revolution increased demand of raw materials.
• International trade occurred with Governor-General Basco.
• The local industries grew with industrializing Europe. New ideas came in with Freemasons on revolutions.
• Royal Company of the Philippines abolished 1834. Manila became harbour area.

First Philippine Republic (1899–1901)

• The economy was halted due to the break out of the Philippine-American War
• Yet during that time, the Philippines was the second richest place after japan.

American Era (1901–35)

• Making the Philippines showcase, the country saw great redevelopment. With new public schools, transportation, reform the economy saw lots of growth. They didn't feel affects of Great depression and instead, Americans relied on their economy.

Commonwealth Era (1935–45)

• Philippines started with common wealth and industry, agriculture, Tourism grew and the country became most visited.
• Taxes on coconut boost development, resulting in economic recession after world war 2.

World War II (1941–45)

• Japanese made the Second Philippine Republic unofficially, resulting in food shortage.
• Jose Laurel rice agency distribute - but still people relied root crops like kangkong.
• Quick-maturing horai rice first used in Taiwan- but it wasn't much due to the weather. The Japanese also provided some denominations of fiat peso, 1, 5, 10 and 50 centavos and 1, 5, and 10 Pesos.
• This money became widely available and was dubbed mickey mouse money, resulting in box of matches costing 100 pesos and a killogram of camote costing P1000.
• Inflation plagued during January 1944.

Third Philippine Republic (1946–65)

• After commonwealth, there was a major country loss with devastation, food crisis, and financial crisis.
• Roxas reorganized government with legislative wide program.
• There was establishment of rehabilitation, GI Bill, and government was improved. Needed help so Roxas campaigned an amendment to the 1935 constitution.
• President Quirino was appointed Secretary of Foreign Affairs, who helped in international diplomacy and relations. During President Garcia, economy was the priority. President Diosdado Macapagal with agricultural lands, and more plans that were created into national laws.

Marcos Era (1965–86)

• Marcos declared martial law, rising communist number.
• During that time the GDP rose from Php55 million to Php193 million
• Massive 62% lent debt meant the Phillipines was at 1970's with - 1980 registering and the failures from the Marco regime had all created cronyisum.

Aquino Administration (1986–92)

• The Philippines was experiencing, financial and commodity
• Debt led to the point that the Philippines was deemed the "Latin-American in East Asia".
• Government, infrastructure, and cut projects. The administration thought it was best that problems would be solved decentralising.

Ramos Administration (1992–98)

• Served to liberalize the country"
• Increased the capital amount. Philippines was able to join the WTO for better management and the debt which also lead to the issuance of bonds. Through out the first there was an abundance of electricity as power shortage came about.

Estrada Administration (1998–2001)

• Midnight cabinets and economic badly because image was a good image but did not work which got even and over saw the problems .

Macapagal-Arroyo's Administration (2001–10)

The arroyo administration did this with and the emergence to, but it would become one those 2008. Highlights with investment, tourism, and tourism were used.

Benigno Aquino III's Administration (2010–16)

Countries consistently, and the government borrowings grew and the growing.

• Growth With and the was due to the.

Chapter 5: Philippine Development Plan

• This explains importance about the Philippine's development planning where one was for tourism and economics.

The importance of development planning in the Philippines

• A shared vision with a concerted plan can come with a future and that actions needed.

Philippine strategy for sustainable development

• Goals is achieve economic growth with protection on biology and environmental quality, that resolves and reconciles the usage with country issues to develop efforts. Strategies include: integration of environmental decision and management.

AMBISYON NATIN 2040

• An anchor will represents collective from people, they want the people want will be by.
• The Life with comfort is their in our own, and enable more with their family.
• This has to a balanced life for workers.
• High trust and are there to serve contribute to various causes.
• They is over hunger and ownership with afford them and there potentials with help in a safe and sustainable business.
• Life - a this is achieve of laying trust for is and several and be enacted.