Development EQ2 Development Lecture Notes PDF

Name: Class: Date: Development EQ2: Why does uneven development occur? Specific instructional objectives: After this unit, students will be able to: Explain reasons that may account for uneven development between countries. 2 What are the factors...

Name: Class: Date: Development EQ2: Why does uneven development occur? Specific instructional objectives: After this unit, students will be able to: Explain reasons that may account for uneven development between countries. 2 What are the factors influencing the level of development of countries? To understand why some LICs were able to catch up with the HICs, but others were not, we need to look at the specific factors that affect the country. We can use SPEED+H factors to categorise the different influences on the level of development of countries. Though the factors are categorised, we need to take note that some factors can fall under multiple groupings, e.g. conflicts could be considered both historical and political; resources could be considered both environmental and economic. The SPEED+H acronym is just to help you think through the different factors systematically and comprehensively. This is also not an exhaustive list of examples for each of the factors. S Social E.g. Educational levels, role of women, health P Political E.g. Conflicts/wars, corruption, political ideology E Economic E.g. Economic structure, openness to trade & investment, foreign debt E Environmental E.g. Location, presence of natural resources D Demographic E.g. Population structure H Historical E.g. Past colonialism 1 2.1 Social factors Level of education of population The levels of education of the working population influences the type of work they take on, which then affects the amount of income generated. This then affects the GNI and also the standard of living of the people. The lack of access to higher levels of education may be a result of various factors. It may be because a large proportion of the population is unable to afford education at higher levels. It could also be due to a lack of availability of institutions offering tertiary education, which may stem from a lack of resources for the country to develop educational facilities and train teachers. This creates a workforce that is unable to take on higher-skilled jobs, limiting their income potential. Provision and accessibility of healthcare The provision and accessibility of healthcare affects the life expectancy and even productivity of the people in a country. Countries with poor access to healthcare will have people who are ill more often or have a shorter life expectancy. Being in poor health also creates a lower quality of life. The lack of medical attention given would also result in a less productive workforce, generating limited revenue for the country. Role of women Social norms and cultural beliefs affect women’s ability to contribute to the development of society and the contribution to the nation's economy. In many LICs, women have limited schooling and working opportunities, as their role is believed to be largely child-bearing and taking care of the family. This means that they are unable to contribute to the formal economy, reducing the income generated by the country. With limited schooling, it also reduces their knowledge and ability for family planning, resulting in higher birth rates in these countries. Rate of population growth Norms and beliefs do not just influence women’s education level, they also affect people’s attitudes towards birth rates and family size. For example,in some agricultural communities, it is a norm for children to be assisting as farm hands, hence the need for a large family size. In other cases, as mentioned above, limited schooling for women results in higher birth rates. A large population and a high birth rate tend to hinder development because resources have to be spent on providing for this young population in the areas of food, healthcare and education. This would mean less resources for developing other aspects in the country. 2 2.2. Political Factors Governance To lead a country effectively, a government needs to be effectively organised, accountable and transparent in policy- making and interpretation, free from corruption and actively promotes justice. Such a government will more evenly distribute economic benefits and improve the quality of life of the population. However, many LICs face corruption by companies and governments. According to the World Bank, the average income in countries with a high level of corruption is one-third of countries with a low level of corruption. The infant mortality rate in such countries is about three times higher and the literacy rate is 25% lower. Corruption raises operating costs through bribes, which impedes business development. Corruption reduces public trust in the government, which reduces the ability of the government to implement developmental policies. Political Stability Stable governments are more likely to attract transnational corporations (TNCs) to invest in the country, as investors tend to look for stable governments that implement favourable industrial policies and secure their investments. Political instability and civil wars cause investors to be worried that their investments may be lost. Beside foreign companies avoiding investing in the countries affected, much resources are diverted to fund the wars, preventing other areas of the country to develop fully. Besides current conflicts, many LICs are suffering from the effects of past conflicts. For example, in Cambodia, Vietnam and Laos, hundreds of millions of bombs placed or dropped during the Vietnam- American war remain hidden and unexploded, and continue to explode when locals unknowingly step on them. The health and productivity costs of the bombs are tremendous. It can cost hundreds of thousands of dollars to find and defuse the bombs. Land with unexploded bombs cannot be used for farming or construction. Such a situation not only affects economic development, but also the social development of the country. Political Ideology Communist countries generally did not develop as quickly as capitalist countries. The political ideology of the country may affect the government’s stance towards foreign investments and trade. South Korea, which is democratic, and capitalist, is significantly wealthier and the standard of living is higher than North Korea, which is authoritarian. 3 Source: https://www.theguardian.com/world/datablog/2013/apr/08/south-korea-v-north-korea-compared 2.3. Economic Factors Economic structure/Employment Structure The economic/employment structure of a country can affect the GNI of a country as it reflects on the value of goods produced by the country. The employment structure of a country shows the proportion of the workforce in the three main employment sectors-primary industry, secondary industry and tertiary industry. Sector Description Examples Primary Activities directly involved with Fishing, farming, agriculture natural resources. Mining, oil extraction. Secondary Activities that transform inputs into Manufacturing of products finished products or component parts e.g. Clothing, shoes, (for use by other industries) electronics, food processing. Can be further categorised into: Assembly plants (e.g. car ○ Labour intensive and capital assembly plants etc) intensive industries. ○ Light and heavy industries Tertiary Service industries. Transportation, retail, These include activities that entertainment and personal distribute manufactured products to services (e.g. hairdressing). 4  places and markets where they can be assembled, consumed or purchased. Tertiary industries may be classified as those providing basic services and those providing premium services. Quaternary Knowledge-based or high-tech Research and development industries (R&D, banking, finance, These activities provide knowledge media, education, and expertise for use by the other administration, human sectors. resources, legal, insurance, It is sometimes considered as part of programming. tertiary industries. The income potential of different industries varies. In general, primary industries (e.g. agriculture) generate a lower revenue, as the value of goods produced tend to be lower in monetary terms. Given that the prices of primary products also tend to fluctuate (e.g. an oversupply of agriculture goods can result in a fall in per unit value), revenue generated from the sale of primary products tends to be low and unstable. The wages offered also tend to be lower for such industries. A large proportion of the population in LICs work in primary industries. This is because many lack education qualifications due to the low number of years of schooling. This reduces the availability of workforce that are able to work in secondary and tertiary industries. HICs have a larger proportion or their workforce working in the secondary and tertiary industries. The goods and services produced by the secondary and tertiary industries tend to be of a higher value, and hence are able to generate a higher revenue for the countries. The longer number of years of schooling also means that there is a greater proportion of population equipped with qualifications and skills to work in secondary and tertiary industries. The wages paid in such industries also tend to be higher in comparison to those offered by the primary industries. Generally, as a country develops, its main economic activity shifts from agriculture to manufacturing. As a country further develops, more people are employed in high-tech manufacturing, tertiary and quaternary sectors, and manufacturing employment falls. Such a trion also brings about an increase in GNI as the value of the goods produced increases. 5  Foreign Debt Some countries may have taken debts from international organisations (e.g. World Bank, International Monetary Fund) to finance their development plans. As a result, a significant proportion of LDCs' revenues can go into debt repayment rather than developing the country. E.g. 10% of Ethiopia’s government revenue is used for international debt repayment. Availability of Capital The availability of capital influences the ability of the country to acquire necessary technology and equipment to help a country develop. Many LICs lack the capital to obtain technology to develop the necessary infrastructure such as roads or railway networks to spur industrialisation. They also lack the capital to develop infrastructure and amenities to improve social development, especially in areas such as access to safe drinking water and sanitation. 2.4. Environmental Factors Geographical Location The location of countries or regions can encourage or hinder access to international trade. Traditionally, coastal locations tend to develop faster than their land-locked counterparts due to their accessibility to international trade, which occurs mostly through shipping till today. For example, China’s southeastern cities developed faster in comparison to their northwestern counterparts partially due to their proximity to the sea trading routes. The access to sea trade enabled the country to export goods easily, facilitating the country’s economic development. Climatic conditions. Climatic conditions would affect agriculture, farming and the spread of diseases. In general, countries with more favourable climatic conditions that are less harsh tend to develop faster. ❖ For example, Sub-Saharan Africa is hot and dry, so it is not suitable for large-scale agriculture and farming. Tropical regions are hot and wet, encouraging the growth of dengue mosquitoes that 6  spread malaria and dengue fever. However, technology has helped many countries overcome their climatic constraints. ❖ For example, Dubai, which experiences an arid climate, managed to overcome their lack of water resources using desalination plants that take water from the Persian Gulf and remove salts, contaminants, and particulates to make it suitable for human use and consumption. Natural Disasters Countries that face natural disasters usually find it difficult to develop as investments may be destroyed during the disasters. Resources are also spent on rebuilding and repairing the damage from disasters, reducing the amount available for infrastructure development. Availability of Natural Resources In general, countries with natural resources develop faster than countries with few or no raw materials. Countries can export them and use the earnings to fund other aspects of development. Those without are disadvantaged. For example, despite an annual oil revenue of more than $200 billion, most Saudis lack adequate housing, healthcare, sanitation and education. Most of the profits go to the oil sheiks and tycoons, rarely benefitting the locals. However, it is not guaranteed that all countries with plenty of raw materials will always develop faster. For example, the ownership over the natural resources may be held by a small number of rich individuals in the country, and hence the export of these resources benefit only a small proportion of the people in the country. One such example would be that of Brunei. 2.5. Demographic Factors In countries where birth rates are high and are facing rapid population growth are harder to develop as they are often overpopulated. Overpopulation occurs when a country’s resources are unable to support its population. Countries that are overpopulated have a high young dependency ratio and most of the country’s resources are channelled to meeting the basic needs of the population and little is left for investment to develop the country’s economy. Countries with a large percentage in the economically active age group will be able to develop rapidly if the conditions are favourable. vs 7 2.6. Historical Factors Colonialism Modern colonialism began in the 15th century, during that period many European countries were looking for new trade routes and civilizations outside of Europe. The aim of these colonial powers was to obtain natural resources for their own development. The colonies were exploited through forced labour and extraction of natural resources. The natural resources were then exported back to the home countries of the colonial powers and processed into higher value goods. For example, the Portuguese colonised Angola in the 15th century and set up plantations to exploit the favourable physical conditions and the availability of labour there. Unlike Portugal, the environmental conditions in Angola were suitable for the growing of cash crops such as cotton, coffee and cocoa. The cash crops grown were then exported back to Portugal and processed for sale. Such a trading relationship created a dependence on primary industries in the colonies and a reliance on low value primary exports. In contrast, the colonial powers developed quickly economically, widening the disparity in economic development between the colonies and the colonial powers. Although the colonial powers developed infrastructure such as roads and railways to facilitate the movement of the cash crops or natural resources, many social development aspects such as education and healthcare were not developed. In addition, many countries faced significant internal political conflicts between different groups (e.g. ethnicity, tribe, religious, political views) , as the departure of the colonial masters left a leadership void in these countries. 8 Annex A Factors affecting development of Singapore and South Sudan – A comparison Singapore South Sudan Social Factors – Accessibility to education and Healthcare There is high accessibility to education in Education is inaccessible in South Sudan. Singapore. Adult literacy rate in Sudan stood at 34.5% Adult literacy rate in Singapore has (2022). Of all those lacking literacy, 54.7% are been >95%, with mean years of schooling females. at 11.7 years (2023) 63.1% of population has post-secondary The government only spent 1.54% of its GDP, qualifications or 4% of its national budget on education (2022) Source: UNESCO, GAL country profiles (Oct, 2022) The lack of infrastructure and trained teachers resulted in the limited access to education. In 2023, it was estimated that 2.8 million children are out of school, out of which 53% were girls. High quality workforce continues to attract South Sudan's unproductive workforce means investments and continue to grow the that the country is unable to generate high economy. income as they lack the skills and knowledge for higher skill and higher value work. Majority of The highly educated workforce is able to the population are engaged in low value work, take on higher-skill and higher value work. generating low income. This means that the country is able to generate high income. This resulted in limited resources to develop the country’s infrastructure to support industrialisation. It also limited the country’s ability to provide social services to improve the standard of living of the people. The low income earned by individuals also resulted in the population being unable to attain a reasonable standard of living. 9 Singapore was ranked 6th in the world for The lack of access to healthcare has resulted in quality of healthcare services and the low percentage of the population with healthcare system. About 80% of the access to healthcare (13%). Life expectancy for population access the country’s public South Sudan is only 55.4 years and infant healthcare system. Life expectancy in the mortality rate is 63.8 per thousand live births in country is 84.3 years and infant mortality 2021. rate is 1.41 in 2023. South Sudan has a high disease burden (both The highly accessible and good quality communicable and non-communicable healthcare has resulted in a more diseases). This has caused a strain in the productive workforce. country's resources and unproductive workforce inability to generate income has worsened the ability of the country to develop. Social Factors – Gender disparity Both males and females have equal There is low female literacy and inadequate access to education and employment. healthcare services for women which resulted in Country is able to maximise the potential poor maternal health. In addition, women of its labour force to develop and participation in the economy is very low, and contribute to its economy. harmful traditional practices like child marriages are still prevalent. This limits the country’s effort to social development. Political factors – Political stability and Conflicts Singapore enjoys a high degree of political South Sudan has been facing many years of stability and is free of internal conflicts. political conflict and unrest since before This has attracted much foreign independence. Millions have died since. There investments into the country, helping the are an estimated 800 000 refugees from post- country develop economically. independence conflict alone. Singapore enjoys a high GNI per capita Political conflicts have deterred investments, PPP of US$67000 in 2022. hampering economic development. Much resources have also been spent on funding these conflicts. Infrastructure is damaged making it harder for the country to develop. South Sudan’s GNI per capita PPP stood at USD1044 in 2015. More current data is not available. Political factors – Governance 10 The Singapore government has put in South Sudan gained independence only in much effort to develop the country both 2011. Since then, it has had problems economically and socially. establishing a viable governing system due to a · The country invests heavily in large number of armed opposition groups. providing and making education accessible to its people , providing skills Corruption is rampant. Based on the corruption training for its workforce to upskill and stay perception index, South Sudan is ranked relevant in the economy. This provided the second most corrupt country in the world in country with a workforce that continues to 2020. This has discouraged investments and be productive and generate high income. hindered development. · The country invests heavily in making healthcare accessible to all. The country does not have enough resources to Public education is also provided to develop social infrastructure and services to encourage people to stay healthy so that meet the needs of its population. they remain productive. · Economic policies are implemented to encourage investments to continually grow the economy. (eg tax incentives and government support given to encourage research and innovation) · Continuously upgrading infrastructure to support growth and development · Making proper housing accessible to its people through public housing policies. Home ownership in Singapore is 90% in 2023. · The country also has zero tolerance of corruption, enabling transparency in its decision making. Economic factors – economic structure Economy is well developed with tertiary South Sudan's heavy reliance on its primary industry forming the largest sector of the industry means that its GNI is low. The country economy. In 2022, the agriculture sector does not have enough capital to develop its contributed only 0.03% to the GDP, secondary industries. manufacturing sector contributed 24.16% and 70.85% came from the tertiary sector. Although South Sudan has a huge oil sector, In terms of employment, 14.42% are bringing in 90% of the government’s budget, engaged in secondary and 85.26 in revenue from the oil sector remains in the hands tertiary sector in 2021. of a small number of people. Income from this (Source: Statista.com) industry is not reinvested for social development, nor is it invested to develop other This means that the country is able to sectors of the economy. generate high income, and benefit from the cumulative causation effect. Economic Factor – foreign debt 11 As of 2020, the IMF measured Since gaining independence, South Sudan’s Singapore’s national debt-to-GDP ratio as debt has increased. 131.19%, the 6th highest in the world when expressed as a percentage of GDP. This suggests that national revenues can go into debt repayment rather than developing the However, given that the Singapore country. government’s assets outweigh its debts, the country has a net debt-to-GDP ratio of 0%. The government also does not borrow to fund running the country. Instead, it borrows for specific infrastructure projects. Once those projects are completed, they result in assets that have value. Thus, the debts that the Singaporean government carries are matched by assets of equal or greater value. Environmental – Geographical location Coastal location helps boost thriving South Sudan is a landlocked country with no trading activities, generating more access to the sea. This made trading with revenue and attracting more investments other countries difficult. for the country. This also means the population has more jobs available and South Sudan had to rely on Sudan for the higher income to provide them a high operation of its oil pipeline, reducing its standard of living. autonomy over the oil export. This resulted in a continuing conflict over money from the The port attracts 130,000 vessel calls on sales of oil. average a year, while the maritime industry accounts for 7% of Singapore’s GDP and 170,000 jobs in 2019. Environmental factors – availability of natural resources Although Singapore lacks natural The country is rich in oil and also has small resources, it overcome this challenge by amounts of gold, limestone, iron ore, copper · Importing from various sources and silver. · Investing in research and However, they face the resource curse. innovation, as well as technology · Sudan, the northern neighbour of · Outsourcing parts of the South Sudan, has not taken the loss of its production process productive oil lands well. There is a continuing border war in the region of Abyei. · Within the country, there are conflicts between different political parties to fight for control of the resource. 12  Demographic Factors - Population structure Singapore was able to take advantage of South Sudan’s rate of population growth is its large EAP during the early stages of 4.12% (3rd highest in the world). It has a development. The large supply of low-cost young and rapidly expanding population. labour, together with incentives offered by the government has started the rapid A large proportion of the country’s national industrialisation period in Singapore. revenue would have to be allocated to the provision of resources such as education and Singapore’s successful anti-natalist healthcare, reducing the amount available for policies in the 1960s to the early 1980s economic development. has prevented the country from becoming overpopulated and causing a strain on the country’s resources. Historical Factors – Past Colonialism Under the British, Singapore was The British focused on the northern part of developed as a trading port. This Sudan and largely neglected the southern part established trade links between of Sudan. Singapore and the rest of the world, which facilitates the country’s development as a Investments and education institutions were world class port. set up in the north and not the south resulting in a lack of economic and social development Today, the port attracts 130,000 vessel of the southern parts of Sudan. calls on average a year, while the maritime industry accounts for 7% of Singapore’s GDP and 170,000 jobs in 2019. 13 14