Economic Geography “Development”

Economic Geography“Development”

Cultural Geography

C.J. Cox

Chapter Overview

Economic Geography World Economic Regions Continuum of Development Measurement of Economic

Development Structure of Economies

Geographer’s Perspective of World Economies

Geographers are interested in the distribution of wealth in the world today.– What are the patterns of wealth worldwide?– Why is wealth distributed in the manner

that it is?– What can be done to improve the wealth of

the poorer countries?

Economic Geographers

– explain how people in various places make a living,

– by analyzing the characteristics of, differences among, and movements between areas of production, exchange, and consumption.

Economics in Context

Of special interest economic geographers is the localization of economic activity– how has such activity has evolved

historically within specific cultural and technological contexts

– What are the particular physical and human resources and economic and political conditions that influence development

Globalization

accelerating economic, cultural and political interdependencies across national borders.

Much of the world's economic activity is now transnational in scope.

Globalization underscores virtually all contemporary geographies.

Rich & Poor

Determining Development

Old Classifications– First World

Ex: North America and Western Europe

– Second World Ex: U.S.S.R. and Eastern Bloc countries.

– Third World Ex: The underdeveloped, such as much of

Latin America and South-East Asia.

Determining Development

New Classifications– Developed and Developing economies

Or,– Industrialized and Newly Industrializing

Countries (NIC)

A Continuum of Development

Poor Countries Rich Countries

Zimbabwe USA Sweden

Developing vs. Developed

Developing– countries in the

process of developing their economies

– less diversified economies

– mostly agricultural based economies

Developed– countries with

developed economies

– more diversified economies

– mostly service, retail and technology based economies

How Is The Economic Development of a country

Measured?

GNPDemographic Signs of

DevelopmentSocial Signs of DevelopmentStructure of the Economy

Key Terms Per Capita Income: Per person income

Gross National Product: Total production of goods and services by a country within a period of a year

Gross Domestic Product: Total production of goods and services within a country during a period of a year

Range of World GNP World Average

$4920

Developed Countries $19,310

Developing Countries $1,120

Lowest GNP $80. Mozambique

Highest GNP $41,210 Luxembourg

Mozambique $80 USA

$26,980

Luxembourg $41,210

World Average $4920

Developing Average $1,120

Developed Average $19,310

GDP 1995

Single Commodity Dependent Economies

Farming - orangeOil - GreenMetals - pinks

How Is The Economic Development of a country

Measured?

GNPDemographic Signs of DevelopmentSocial Signs of DevelopmentStructure of the Economy

Demographic Signs of Development

Developing Countries

– high birth rates (5%)– high natural increase (4.6%)– high infant mortality (150+)– high fertility (7.4)– high pop under 15 (50%)– low pop over 65 (1%)– low doubling time (15 yrs.)– short life expectancy (43 yrs.)

Developed Countries

– low birth rates (1%)– low natural increase (0)– low infant mortality (.4%)– low fertility (1.1)– low pop under 15 (15%)– high pop over 65 (18%)– high doubling time (4077 yrs)– long life expectancy (80 yrs)

How Is The Economic Development of a country

Measured?

GNPDemographic Signs of DevelopmentSocial Signs of DevelopmentStructure of the Economy

Social Signs of Development Use of consumer goods - phones, TV’s,

computers Distribution of wealth & services

– health care availability number of physicians per capita

– education availability literacy

Signs of over consumption– caloric intake

How Is The Economic Development of a country

Measured?

GNPDemographic Signs of DevelopmentSocial Signs of DevelopmentStructure of the Economy

Structure of the Economy

Economic activities are divided into stages or categories of increasing complexity– Primary Sector– Secondary Sector– Tertiary Sector– Quaternary Sector

Primary

Secondary

Tertiary

Quaternary

Economic SectorsStructure of the Economy

Primary Industry - extraction of resources from the earth

farming, mining, lumber harvest, fishing

Primary Sector

The direct extraction of material from the earth. Generally, through agriculture, but also through mining, fishing and forestry.

Many developing nations still rely on the primary sector as a source of employment and export earnings.

Interesting Facts

It is estimated that as much as 75 percent of the people in India are working in agriculture.

Less than 5 percent (maybe 3) of the work force is involved in agriculture in the United States.

Rice Farming in Vietnam - primary industry

Vietnam

Costa Rica

Economic SectorsStructure of the Economy

Secondary Industry - processing and manufacturing of resources

manufacturing

Secondary Sector

The manufacturing or processing of primary products.

Associated with the Industrial Revolution.

Interesting Fact

Currently, only about 15 percent of manufacturing comes from developing countries, but this figure is rising due to policies set forth by the IMF and various multilateral agreements.

Sugar Refining Plant

Timber Processing -Humboldt

Mazarotti Plant - Italy

Economic SectorsStructure of the Economy

Tertiary Industry - distribution of goods and services

trucking, banking, retail store outlets, groceries

Tertiary Sector

Providing services, such as: financial, retail, government, transportation, marketing, legal, etc…

Employs most of the labor force in the developed world.

“Post-Industrial”

Hospital in Nepal

New York Stock Exchange - Trade & Finance

Mexico Trading Floor

Economic SectorsStructure of the Economy

Quaternary Industry - processing and dissemination of information

The “Information Economy”, services related to information and research.

education, research & development, cyber space

Servers/hubs - note exclusion of S. Hemisphere

Satellite Connections - note leap frogging of Africa

Chapter Overview

Economic Geography World Economic Regions Continuum of Development Measurement of Economic Development Structure of Economies

Economic Geography“Development”

Cultural Geography

C.J. Cox

Measures of Development

Consumer Goods Fertility Rate Infant Mortality Rate Literacy Economic Growth

Fertility Rate

Developing countries have higher fertility rates than developed countries.

– The total fertility rate indicates the # of children that would be born to 1,000 women passing through the child-bearing ages.

Infant Mortality Rate

Developed countries have a lower rate than the developing countries.

– Number of babies that die before reaching one year per 1,000.

Economic Theory

Classical Liberalism Neo-Liberalism Dependency Theory Globalization

Classical Liberalism

An economics and politics doctrine that says an economic system functions best when there is no interference by government. It is based on the belief that the natural economic order tends, when undisturbed by artificial stimulus or regulation, to secure the maximum well-being for the individual and therefore for the community as a whole.

“Laissez-faire”

Neo-Liberalism

Neoliberalism is a variation on the classical liberalism of the 19th Century when British and other imperialisms used the ideology of competition and "free trade" to justify their own colonialisms. Anti-colonial revolt ended the empires. Worker revolt in the 30s and anti-colonial struggles ended classical liberalism but was contained by Keynsianism: government management of the wage, the welfare state and "development." An international cycle of worker, student, peasant, woman, and pro-ecology revolt in the 60s ended Keynesianism which was replaced by neoliberalism.

Dependency Theory

Dependency Theory: A theory of colonial imperialism which informs anti-American sentiment in Latin America and elsewhere. The theory correctly asserts that capitalist imperialism distorts local economics and creates a surplus population but is often an effort to substitute foreign exploitation with that of local capitalists. A country becomes dependent upon the U.S., Germany, England, or Japan by selling cash crops or natural resources and dependent upon the same countries for food and luxury goods. The developed capitalist countries set the terms which benefit multinational corporations and banks and give "aid" subsidized by workers in capitalist countries to repair some of the distortions, especially those of hunger as cotton, coffee, cocoa, tea, beef or other foods are exported to capitalist countries

A Tricky Move?

… in 1991 the GNP was turned into the GDP - a quiet change that had very large implications. Under the old measure, the Gross National Product, the earnings of a multinational firm were attributed to the country where the firm was owned and where the profits would eventually return. Under the Gross Domestic Product, however, the profits are attributed to the country where the factory or mine is located, even though they won't stay there.