More Unequal development

More Unequal More Unequal developmentdevelopment

This time within one city

Sao Paulo

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Where is Sao Paulo?Where is Sao Paulo?

What is its location?

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How great is the How great is the difference?difference?

• The map shows the different districts of Sao Paulo and their HDI – human development index

• The best are on a par with Canada and Sweden

• The worst are about level with Vietnam

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Why is it like that?Why is it like that?

• It all started in 1850 when coffee became the big money spinner. The land around Sao Paulo was good for growing coffee. The plantation owners became very rich.

•Sao Paulo was the port used to export all the coffee and the plantation owners built beautiful housing there – it was their city place for culture and leisure!

• It continued to be an upmarket playground and even became a tourist resort for the very rich in the 1920s and 1930s.

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Why is it like that?Why is it like that?• Then in the 1950s, LEDCs started to think that

instead of exporting cheap raw materials, thus allowing the developed countries to make all the money by processing them, wouldn’t it be much better to do the processing themselves?

• It so happens that Sao Paulo had locally sourced minerals, iron ore and ample cheap energy (mostly HEP), and this made it an ideal spot to develop an iron and steel trade.

• Iron and steel and engineering businesses were set up and were soon followed by Ford, General motors and Mercedes all have building factories there.

• The labour was cheap and willing and Brazil was a big market waiting to need more goods as the country developed.

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Why is it like that?Why is it like that?

• It started slowly, but soon more labour was needed. New housing developments grew up.

•Although the wages were low on the world stage, they were much better than in many other parts of Brazil, especially the North East.

•So thousands began to pour in. •Unfortunately not all of them were

skilled enough for factory work, so not all of them could afford the new flats.

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Why is it like that?Why is it like that?

• These new arrivals had left their homes with everything they owned and so could not return. Instead, they used waste ground and set up shanty towns or favelas.

• To start with, they had no roads, no water, no sanitation, no electricity – not really very much of anything – and while things are improving – slowly – it is these areas that have the low HDIs

• What is happening there and how they are dealing with the problem is another story for another day.

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This Favela is called This Favela is called Paraisopolis FavelainParaisopolis Favelain

A joke perhaps?

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Spot the picture

with a high HDI?

Economic ProsperityEconomic Prosperity

Malaysia

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Malaysia (in Malaysia (in green)green)

• All the shaded areas are NICs

• The red ones South Korea, Taiwan, Honkong and Singapore are known as the Tiger economies as they developed at such a speed.

• But the orange ones have made great strides in their development too. Malaysia is included in this second group

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What is Malaysia’s location?

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What we all ready know about What we all ready know about MalaysiaMalaysia• GDP per capita of $10,882 – a bit better than China or

Brazil• Annual population growth 2.5% - that means in 30

years, if it carries on in the same way, it will double its population – but as the people become more affluent, the birth-rate is already falling.

• Infant mortality: 10 per 1000 live births – again better than many other NICs but still double MEDC

• Life expectancy: 74 – catching up fast• People per doctor: approx 1400 (low compared with

Brazil who has 1 for every 490)– but they must being doing something right see life expectancy/ infant mortality

• Education – well up with MEDCs – primary 99% and secondary education 92% - bit more about that later and rank in the top 20 in Maths and Science internationally

• HDI (Human development Index) 0.823 (No 63 on the list)

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What has changed in the What has changed in the exports?exports?

How have total raw materials

changed

How have total manufactured

goods changed

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What started the change?What started the change?

• Many countries whose main exports were primary products, saw that the prices they got were very low. The raw materials were exported to more economically developed countries where they were turned into saleable goods and that this was where the money was made.

• In the 1970s, many countries in the Far East realized that so long as they depended on exporting primary products, their development was never going to improve and so they decided to start to process their own raw materials.

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What started the change?What started the change?

•Malaysia has another problem. There were 3 distinct ethnic groups:

•Chinese – largely business people• Indians – educated, doctors lawyers •Native Malay – agricultural workers, low

grade manual work,•This led to various riots as to the

unfairness of things and also meant the Malays were among the very poor of the country.

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What started the change?What started the change?

• In order to make life more equal to all groups, Malaysia decided that eradication of poverty was one way forward.

• So the Malaysian government was determined to develop its manufacturing and processing industries.

• In 1970 it introduced its New Economic Policy (NEP). They decided to: provided financial incentives for foreign trans-

national companies (TNCs) to invest in Malaysia. train their workforce in the necessary skills. used money from traditional exports to help fund

this development.

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How did Malaysia attract TNCs?How did Malaysia attract TNCs?

• They attracted inward investment with the inducement of low taxes and cheap land

• They invested heavily in getting an educated workforce. The government has also built an infrastructure of roads, railways, airports and ports, which benefit the population but also encourage the TNCs to invest

• They kept the wages low

• The strict labour laws minimised disruptions and union membership was not encouraged

• The working day was long.

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Why did the people allow this?Why did the people allow this?•The government achieved good

social welfare results•The reductions in child and maternal

mortality have been exceptional and rates are now similar to those of many developed countries.

•These improvements are attributable to a well developed primary health care system, including substantial investments in the reproductive health service, and to access to quality water, sanitation and nutrition.

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Why did the people allow this?Why did the people allow this?•They ensured that the people had

access to quality water and sanitation.

•The Malaysian government subsidies for petrol, food and other essential goods were subsidized which allows the people to have sufficient, even if their income is low.

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Kuala Lumpur

• Many of these workers were paid low wages, allowing them to produce goods far more cheaply than most MEDCs.

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Then …Then …• In the 1980s Malaysia also

started to develop its own car industries, having worked since the 1960s with foreign companies and assembling them.

• Components were now made in Malaysia and in 1985 the Malaysian car company Proton was launched.

• Proton exports cars to the United Kingdom, South Africa, and Australia and the company is aggressively marketing its cars in several other countries including the Middle East.

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• But then the Government of Malaysia sought to make the leap to a knowledge-based economy.

• Malaysia is now one of the world's largest exporters of semiconductor devices, electrical goods, and appliances

• The government has ambitious plans to make Malaysia a leading producer and developer of high-tech products, including software.

• So there is even more investment in education than before

• Malaysia is already a major destination for outsourcing after China and India

The next phase …The next phase …