Development EQ1_Lecture Notes.pdf

Name: Class: Date: Development EQ1: What is development and how does it vary from place to place? Specific instructional objectives: After this unit, students will be able to: Describe ways in which development can be measured....

Name: Class: Date: Development EQ1: What is development and how does it vary from place to place? Specific instructional objectives: After this unit, students will be able to: Describe ways in which development can be measured. Explain how standard of living and quality of life can be related to development. Describe the spatial variations in the level of development. 1.1. What is Development? The term ‘development’ is a wide-ranging concept. While it is often associated with economic growth, it should also include improvements to other important non-economic aspects of people’s lives, such as the standard of living and the non-material quality of life. Development can refer to the process aimed at achieving economic growth and as a result, a conducive environment for individuals to enjoy a decent standard of living and quality of life. Economic growth refers to the increase in a country’s wealth over time. Such changes are usually measured in percentages. It has been widely seen as a good indicator of the health of a country’s economy and whether development is taking place. Standard of living refers to the goods and services available to people in the environment they live in. Some examples include access to electricity, clean water supply, good healthcare services and facilities and efficient and affordable public and private transport. Quality of life refers to the well-being of the people. It is dependent on factors such as political and religious freedom, environmental health and happiness, which are difficult to measure. Generally, countries that have high wealth and incomes, have a highly developed economy, and whose people enjoy a high standard of living and quality of life, are known as high-income countries (HICs). Countries which have low wealth and income, with a less developed economy, and whose people enjoy a low standard of living and quality of life, are known as low-income countries (LICs). 1 1.2. How do we measure development? Given that different countries develop at different rates, we can determine aspects of their development using a range of indicators. These indicators can be categorised into economic or social indicators. Type of Indicator Examples Economic Gross National Income per capita, Gross Domestic Product per capita Health Life expectancy at birth, Infant mortality rate, water supply and sanitation Social Education Expected years of schooling, Mean years of schooling, adult literacy rate Composite Human development index (HDI) Others Happiness, political freedom 1.2.1 Gross National income Gross National Income (GNI) is an indicator often used to assess a country’s wealth. It is calculated using the total value of goods and services produced by a country in a year, plus income received from overseas sources, minus payments to overseas recipients. A simplified description of the GNI would be that it refers to the total amount of money earned by a nation's people and businesses. To take into account different populations of countries, the per capita income is often used (e.g. GNI per capita). Given that the cost of living between countries is often different, GNIs are also adjusted to reflect the purchasing power of the population. The GNI value is adjusted using the Purchasing Power Parity Rate, calculated by the OECD (The Organisation for Economic Co-operation and Development). Such data will be represented as GNI (PPP). The World Bank categorizes countries based on their per capita income levels: GNI per capita (based on 2021 data) Low-income economies/countries (LICs) $1,085 or less lower middle-income economies between $1,086 and $4,255 upper middle-income economies $4,256 and $13,205 high-income economies/countries (HICs) $13,205 or more 2 National income per capita is a useful figure for: Comparing the wealth of countries Identification of countries that require aid. Showing the state of a country’s economy and provision of services. However, there are some limitations: GNI is a national average figure, it does not show differences between individuals or regions. Despite a high GNI per capita, the population may not be able to afford essential goods and services. ○ Eg. in 2016, the USA had GNI per capita of US$57,000, but 1.2% of its population lived below the international poverty line of US$1.90/day. ○ Eg. The cost of housing is so high in Hong Kong that many are unable to afford housing. Some resort to living in cramped and shared housing known as “coffin homes”. They do not take into account informal economic activities (i.e. not regulated and not taxed by the government, e.g. private tuition services, street hawkers). Many in LICs tend to be involved in informal employment, and the incomes from these are not considered. ○ E.g. The regions with the highest share of informality during 2010-17 are sub-Saharan Africa and Latin America and the Caribbean-both at 34% of GDP. Other aspects of development are not considered ○ Social and environmental costs brought about by economic development, which can lower standard of living and quality of life. ○ How governments invest the income e.g. Cuba has a low GNI per capita but its citizens are healthy and well-educated due to investments in health and education. Another common indicator used to measure a country’s wealth is the Gross Domestic Product (GDP) calculated using the total value of goods and services produced by a country in a year. 3  1) Study the GNI and the population data for the two hypothetical countries as shown. Country X Country Y GNI (US$, 2014) 78,000,000 850,000,000 Population (2014) 6500 125,000 Identify the country that is more economically developed. Explain your answer. 2) Study the world map showing GNI per capita in 2021. 4 Describe the variation in income levels as shown on the map. 1.2.2 Urban Population The population’s characteristics can be taken as an indicator of a country’s level of development. One demographic indicator commonly used is the level of urbanisation, which is measured by the proportion of a population living in urban areas. HICs tend to have a higher level of urbanisation than LICs. HICs tend to have the resources to develop cities with modern infrastructure and facilities such as hospitals, electricity and water supply. A large proportion of the population may also be living in urban areas because they work in higher paying secondary and tertiary industries that are mostly located there. In LICs, more people live in rural areas where they work in primary sectors such as agriculture. However, there are some limitations. In some cities, the poorer segments of the population may live in cramped and overcrowded conditions, such as in slums, where there is poor sanitation and diseases spread easily. This is especially common in LICs, where there is a lack of affordable housing. Hence, having a large urban population does not mean that all urban residents enjoy a high standard of living. In some HICs such as the USA and the UK, counter-urbanisation may be common. People who used to live in the cities are relocating to the country-side at the edge of cities to avoid the crowding, congestion, stress, pollution, and crime in cities. This phenomena has been facilitated by improvements in technology and the growing popularity of remote working arrangements. 5 Describe the relationship between GDP per capita and Urban Population. 1.2.3 Life Expectancy Life expectancy refers to the average number of years that a person can expect to live in a particular country. Higher income countries tend to enjoy a longer life expectancy. As a country develops economically, there may be more national revenue allocated to the provision of healthcare and medical facilities. As the income of the population improves, the likelihood of people having sufficient food to eat and getting sufficient nutrients from different types of food also increases. These increases the life expectancy of the population. 6  Country Life expectancy (years) Japan 83 Singapore 83 Norway 82 USA 79 India 66 Cambodia 63 Mali 55 Chad 51 Sierra Leone 45 Source: Population Reference Bureau The table above shows that people in HICs generally live much longer than those in the LICs due to a higher standard of living, such as better healthcare and medical facilities. For example, the average Japanese can expect to live to about 83 years compared to the people from Sierra Leone (45 years) and the Cambodians (63 years) Study the GNI and the life expectancy data of certain countries as shown below. 7 a) Describe the relationship between GNI per capita and life expectancy. b) Explain the reason for the relationship shown in (a). 1.2.4 Infant mortality rate Infant mortality rate refers to the rate at which the number of babies less than one year of age dies, for every 1000 live births, in a year. In general, the more developed the country is, the lower the infant mortality rate. This is because a developed country would have a more developed healthcare infrastructure (e.g. hospitals and healthcare equipment), and will also have a greater number of trained healthcare professionals. Developed countries also have greater access to sanitation and safe drinking water, reducing the vulnerability of infants to waterborne diseases such as diarrhoea. Hence, infant mortality rates reflect on the country’s access to healthcare and amenities such as sanitation and safe drinking water. 8 The table below shows the data for life expectancy and infant mortality rate of the selected countries. Describe the relationship between life expectancy and infant mortality rate. 9 1.2.5 Access to safe drinking water and sanitation Access to safe drinking water is defined as the percentage of the population having access to and using improved drinking water sources. Improved drinking sources refer to sources of safe drinking water, which can include a piped household water connection, a public standpipe or a protected dug well. Access to safe drinking water can reduce the vulnerability of the population to waterborne diseases such as cholera and polio, and hence improve the health of a population. 10 Access to sanitation is defined as the percentage of the population which has access and are using improved sanitation facilities. The access to sanitation facilities enable people to dispose of human waste hygienically. Countries with proper sanitation facilities have toilets with proper flushing and waste disposal systems. If sanitation is poor, such as when human waste is not properly disposed of but left in the open, people will be exposed to bacteria exposed in the waste, which can cause contamination of the environment and water. 11 Describe the global pattern of death rates from unsafe sanitation. 12 1.2.6 Education Indicators One of the basic indicators of the development of national economies is the degree of education and knowledge of its society. Therefore, education, especially higher education, is considered to be a national priority which contributes to economic development as well as the development of society in general. Highly-educated workforce is of special importance as they are able to contribute to the more value-added industries, where more wealth is generated. This in-turn allows the nation to enjoy a better standard of living. Most developed countries implement their development strategies by investing in knowledge and human capital. This also means that many less-developed countries are disadvantaged, as they do not have the resources to develop educational institutions (train teachers, build schools, subsidise education, etc.). People in less-developed countries usually have lower levels of education, as most cannot afford the cost of it. The level of education in countries can be measured by: Mean years of schooling for adults aged 25 years Average number of years of education received by people age 25 and older, converted from educational attainment levels using official durations of each level. Expected years of schooling for children of school entering age Number of years of schooling that a child of school entrance age can expect to receive if prevailing patterns of age-specific enrolment rates persist throughout the child’s life. Adult Literacy Rate Adult literacy rate refers to the percentage of the population aged 15 and above who are able to read, write and understand simple statements. 13 1.2.7 Human Development Index Individual indicators are insufficient to assess the development of a country adequately and holistically, given that development has many facets. As such, it is useful to look at multiple indicators across different aspects of development, or a composite indicator, which compiles multiple indicators into a single index. The United Nations Development Programme (UNDP) created the Human Development Index (HDI) in 1990, to measure and compare the level of development in different countries. The HDI is a composite index that takes into consideration three main aspects of a country: economic well-being, health and education standards. Economic Indicator: Gross National Income per capita Demographic/Health Indicator: Life Expectancy Social/Education indicator: Mean years of schooling for adults aged 25 years and expected years of schooling for children of school-entering age The actual figures for each of these indicators are converted into an index, and a value between 0 and 1 is assigned to each country. The index values are then combined and averaged (using geometric mean) to give an overall HDI value. The closer the index is to 1, the higher the level of development. Based on the HDI value, the countries of the world are divided into four groups: 0.80 – 1.00: Very high human development 0.70 – 0.799: High human development 0.55 – 0.699: Medium human development Below 0.55: Low human development The HDI has these advantages: It provides a comprehensive method of measuring development because it takes into account economic wealth (measured by GNI per capita) as well as standards of living (measured by educational achievements and health data). It is easy to compare across countries. The indicators are commonly measured or easy to obtain. While HDI is one of the most widely used indicators to assess the level of development in a country, it has some limitations. For example: Data availability: HDI is most accurate when it is used to assess the HICs. In HICs, it is easier to obtain data needed to calculate the HDI. However, in places where data is unavailable, most commonly in rural areas of LICs, the final value of HDI may not be reliable. For example, in LICs with a large informal sector, estimates of data would be used instead, resulting in an inaccurate assessment of development. Limited aspects: There are other important aspects of development that HDI does not consider, such as human rights and political freedoms. Time lag: Due to the time required for international agencies to collect, compile and publish the data, there is a time lag between time of publishing and the year of the development. For example, a HDI report published in 2013 will reflect data from 2011. This limitation especially affects countries with a fast-developing economic sector, the published data will no-longer be reflective of the current level of development due to rapid changes. Despite its limitations, it is still useful as a reference for each country’s development across these important aspects. 14 1.3 How does the level of development vary between countries and within countries? The level of development varies between different places. These differences can be observed at different scales: At a global and regional scale, development can differ between countries. This difference in development between the higher income countries and lower income countries is known as a development gap. Within countries, the level of development can differ between different states, or between rural and urban areas. Global variations in levels of development Describe the global variations in HDI. 15 Variations in levels of development within countries Inequality can exist between different regions of a country, e.g. China. Source: https://www.economist.com/china/2016/10/01/rich-province-poor-province Describe the distribution of GDP per capita in China based on the map above. 16  Inequalities can exist between rural and urban areas. - People in urban areas tend to have higher incomes than rural areas. Wealthier residents are able to invest in education and healthcare for their families, while the poorer residents are trapped in poverty. Over time, the gap between the rich and the poor gets wider, resulting in significant inequalities. Migrants from rural areas moving to the city in search of better job and education opportunities are usually less wealthy, and could end up in squatters and slums. 1.4 Conclusion There are many different aspects to development. While it is commonly associated with economic growth, there are other important non-economic aspects as well. Indicators allow us to measure the level of development in different aspects. A good measure of development should include multiple indicators so that different aspects are reflected. Differences in development can be observed at different scales. It can be seen between countries (e.g. HICs and LICs), but also within countries (e.g. between different provinces, between rural and urban areas, within cities). In the next part, we will look at why such inequalities exist and how countries can address them. 17