Lecture 7- Dimensions and Strategies of Development (2) (1).pptx

DIMENSIONS AND STRATEGIES OF DEVELOPMENT POLS 2401: Global Issues Fall 2023 Georgia State University POVERTY Poverty – involuntary lack of enough resources to provide or exchange for basic necessities like shelter, food, and clean water. TYPES OF POVERTY 2 Types: Absolute Poverty – “…a conditio...

DIMENSIONS AND STRATEGIES OF DEVELOPMENT POLS 2401: Global Issues Fall 2023 Georgia State University POVERTY Poverty – involuntary lack of enough resources to provide or exchange for basic necessities like shelter, food, and clean water. TYPES OF POVERTY 2 Types: Absolute Poverty – “…a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services.” UN (1995) Relative Poverty – a condition in which people lack the minimum amount of income needed to maintain the average standard of living within that society.  Common measure of inequality POVERTY TRENDS • Global North vs. Global South: • http://databank.worldbank.org/data/download/site-content/wdi/maps/2017/worldby-income-wdi-2017.pdf MEASURING POVERTY Economic Indicators: •Unemployment – percentage of unemployed workers in the total labor force •Aggregate GDP –The total level of demand for goods and services •Inflation –increase in the prices of goods and services MEASURING POVERTY Social Indicators: •Life expectancy – the average period a person is expected to live •Infant mortality –the number of deaths per 1,000 live births of children under the age of one •Gross National Income (GNI) – the total domestic and foreign output THE COLD WAR AND POVERTY Communism vs. Capitalism • A tug of war between the US and USSR for newly independent states FOREIGN AID What is it? •Money, food, or other resources lent from one country to another •Criticisms: • Wasteful • Ineffective • Falls in the wrong hands/ aid never really gets to the people that need it most • Creates dependency THE WASHINGTON CONSENSUS What is it?  A set of economic policies recommended to developing countries by Washington D.C. based IGOs (IFM and the World Bank) How did it come about? • Decision that the IMF and World bank should play a bigger role in helping control debt and development THE WASHINGTON CONSENSUS 10 Reforms: 1. Fiscal Responsibility 2. Limiting Public Expenditures 3. Tax reform 4. Liberal Interest Rates 5. Competitive Exchange Rate 6. Trade Liberalization 7. Foreign Direct Investments 8. Privatization 9. Deregulation 10. Property Rights NEOLIBERALISM VS. LIBERALISM Classic Liberalism: • Hands-off approach to economic matters Neoliberalism: • Modern take on classical liberalism • Increasing privatization and reducing THE WASHINGTON CONSENSUS: CRITICISMS •No long terms benefit •Debt remained high •Emigration •Protectionism • High poverty levels • High unemployment •Cuts in vital social expenders •Consequences of privatization THE WASHINGTON CONSENSUS: CRITICISMS •Diminishing Workers Rights: • Limiting the role of trade unions •Examples: • The United States • Latin America • France FREE TRADE AND POVERTY Trade and Poverty:  https://www.youtube.com/watch?v=Ap-M30CRGtI China’s fight against poverty:  https://www.youtube.com/watch?v=9UABa09QsvM THE IMF How the IMF works: • https://www.youtube.com/watch?v=MhrC2_Hak08&t=47s Criticisms: • Loan conditionality • Breach of sovereignty • Structural adjustments THE WORLD BANK How the World Bank works: •https://www.youtube.com/watch?v=F59fF-xu-bY Criticism: •The World Bank has a say in what the money should be spent on •Lends to oppressive regimes •Strict loan conditionality •Structural adjustment policies FOREIGN DIRECT INVESTMENTS Foreign Direct Investments – when a company invests in the economic development of a state, by opening factors or headquarters. THE UN AND POVERTY Millennium Development Goals 1. Eradicate extreme poverty and hunger 2. Universal primary education 3. Gender Equality 4. Reduce child mortality 5. Improve maternal health 6. Combat deadly diseases 7. Environmental sustainability 8. Global partnership for development SUSTAINABLE DEVELOPMENT SUSTAINABLE DEVELOPMENT Encourage: • Environmental conservation • Limit waste (i.e. use of plastic) • Clean energy • Water conservation • Limit the abuse of natural resources THE ROLE OF NGOS •Work to identify problems •Grass-roots connections •Hands-on experience MICRO LANDING Microloans – a small amount of money lent to a new business • Commonly used in developing countries • Lend money to people who cannot borrow from a traditional bank The Grameen Bank – microfinance organization and community development bank that makes out small loans to impoverished individuals without requiring collateral GLOBALIZATION AND POVERTY Movement away from unskilled labor in developed countries • Consequences: • Unemployment for unskilled workers • Lower standards of living THE A.I. DILEMMA • Is the technology helping alleviate poverty or is it enabling poverty? • It’s doing both.