Development vs growth (L9)
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Development vs growth (L9)

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MDS 510-lecture 9

MDS 510-lecture 9

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Development vs growth (L9) Development vs growth (L9) Presentation Transcript

  • LECTURE:09 Development versus Growth M. A. Kamal, Ph.D Director General National Academy for Planning and Development
  • Outline:
    • Introduction
    • Development means
    • Development Includes
    • Growth
    • Economic Growth
    • Types of Economic Growth
    • Measures of Economic Growth
    • National Income Accounting
    • Growth versus Development
    • Conditions for Development
    • Core values of Development:
    • Where Should be Developed?
    • Human Development
    • Other Measures of HD
    • Population growth & natural resources
    • Population impact on natural resource
    • Urbanization & sustainable development
    • Urban Growth
    • Urban Problems
    • Impact of Urbanization on Environment
    • Conclusion
  • 1. Introduction
    • 1.1 Growth and development has traditionally been subject of economics since Adam Smith and it is still focused by theoretical, methodological practical experts as well.
    • 1.2 Mainstream theories of the 20th century often do not distinguish ‘growth’ (the increase of the GDP) and ‘development’: the two words are used as synonyms.
    • 1.3 According to other authors (e.g. THIRLWALL (2000)), economic development is more complex than mere growth.
    View slide
  • 2. Development means:
    • 2.1 Generally Development is the gradual growth of a situation that becomes more advanced and strong than previous one.
    • 2.2 Development more likely related with economic growth
    • 2.3 Development is a process where by the entire social system of a country more upward.
    • 2.4 Development incorporates the notion of a measure/ measures of human welfare
    View slide
  • 2. Development: 2.5 Development is a unfolding of human potentials for meaningful participation in economic, social, political and cultural process and institutions, so that people can improve their conditions .
  • 3. Development Includes
  • 4. Growth 4.1 Generally growth refers to an increase in some quantity over time. The quantity can be: • Physical (e.g., growth in height, growth in an amount of money) • Abstract (e.g., a system becoming more complex, an organism becoming more mature).
  • 4.2 Growth
  • 5. Economic Growth
    • 5.1 Economic growth is an increase (or decrease) in the value of goods and services that a geographic area produces and sells compared to an earlier time.
  • 6. Types of Economic Growth
    • 6.1 Positive growth: If the value of an area's goods and services is higher in one year than the year before, it experiences positive growth, usually simply called "economic growth."
    • 6.2 Negative economic growth: In a year when less value than the year before is produced and sold, it experiences "negative economic growth," also called "recession" or "depression."
  • 7. Measures of Economic Growth
    • 7.1 Using measures of economic performance in terms of the value of income, expenditure and output
        • GDP – Gross Domestic Product
          • The value of output produced within a country during a time period
        • GNP – Gross National Product
          • The value of output produced within a country plus net property income from abroad
        • GDP/GNP per head/per capita
          • Takes account of the size of the population
        • Real GDP/GNP
          • Accounts for differences in price levels in different countries
    • 7.2 Using measures of economic growth can give distorted pictures of the level of income in a country – the income distribution is not taken into account.
    • 7.3 A small proportion of the population can own a large amount of the wealth in a country. The level of human welfare for the majority could therefore be very limited.
    But this could be just around the corner! Copyright: chinagrove, http://www.sxc.hu This might be a common picture…… Copyright: unseenob, http://www.sxc.hu
  • Economic Growth
    • High economic growth fuelled through capital spending can hide a number of underlying economic problems – how is the income and wealth distributed? Who is doing the spending and will it ‘trickle down’ to the poor?
    Shopping Mall in Saudi Arabia Copyright : Christo Pacheco, http://www.sxc.hu Dubai Skyline Copyright: zchizzerz, http://www.sxc.hu
  • 8. National Income Accounting – Problems with using GDP/GNP
    • 8.1 Reliability of data?
        • How accurate is the data that is collected?
    • 8.2 Distribution of income?
        • How is the income distributed – does a small proportion of the population earn a high percentage of the income or is income more evenly spread?
  • 8. National Income Accounting – Problems with using GDP/GNP
    • 8.3 Black/informal economy?
    • Some economic activity not recorded – subsistence farming and barter activity, for example
    • Some economic activity is carried out illegally – building work ‘cash in hand’, drug dealing, etc.
    • Work of the non-paid may not be considered but may contribute to welfare – charity work, housework, etc.
    It might not be pleasant, but what he finds among the refuse could be all he has. Title: Sierra Leone Liberia. Copyright: Photolibrary Group
  • 9. Growth versus Development
    • 9.1 Economic growth may be one aspect of economic development but is not the same
    • 9.2 Economic growth:
        • A measure of the value of output of goods and services within a time period
    • 9.3 Development:
        • A measure of the welfare of humans in a society
  • 10. Conditions for Development:
    • “ The concepts of freedom , participation in decision making towards fulfilling one’s potentials and rights to organize are all essential conditions for development process.
    • ---A. Sen (Development as freedom:1998)
  • 11. Core values of Development:
    • 11.1 There are three core values of Development
          • Sustenance- The Ability to meet basic needs
          • Self-esteem-To be a Person
          • Freedom of choice- To be able to Chose
  • 12. Where Should be Developed?
    • 12.1 The development process has multiple interface and these are between following issues:
          • Population and development
          • Poverty and development
          • Environment and development
          • Cultural values and development
          • Natural resources and development etc.
  • 13. Human Development:
    • 13.1 The concept of HD first introduced publicly in 1990 by the UNDP’s global Human Development Report (HDR).
    • 13.2 HD is a process of enlarging peoples choice.
    • 13.3 Wide ranging choice are—
    • a. to live a long and healthy life.
    • b. to be educated
    • 13.4 To have access to resources needed for a decent standard living.
    • 13.5 Political freedom
    • 13.6 Guaranteed human rights and
    • 13.7 Personal self respect
  • Human Development Index
  • Development
    • Iraqis have supposedly been given their freedom following the American led ‘Operation freedom’ but has it improved welfare?
    Copyright: Photolibrary Group
  • 14. Other Measures
  • 15. Population growth & natural resources
    • 15.1 In demography, population growth is used informally for the more specific term population growth rate, and is often used to refer specifically to the growth of the human population of the world.
  • 15.2 There are about 6.6 billion people in the world and over 95 million babies are born per year – that is an average of three babies per second!
  • The effects of the population explosion
  • 16. Population impact on natural resource How does human activity affect the environment? Reduce the land available for plants and animals Raw materials (inc. non-renewable) resources are being used up More waste is produced which (if not handled properly) may pollute air, water & land
  • 17. Urbanization & sustainable development
    • 17.1 “Urban” varies widely from country to country. Some countries distinguish between rural and urban based on:
          • Size or density of localities
          • Administrative considerations (only major cities are classed as urban)
          • The percentage of persons not dependent on agriculture
          • Some nations define all of their population as living in urban areas (e.g. Singapore). Some nations define none of their population as urban (e.g. Polynesia (South Pacific Islands))
    • 17.2 An urban (or metropolitan) area = a town or a city plus its adjacent suburbs with a population of >2,500 people
    • 17.2 A rural area = an area with < 2,500 people
  • 18. Urban Growth
    • 18.1 Urban areas grow in 2 ways:
          • Natural increase of its population (births)
          • Immigration (mostly from rural areas)
    • 18.2 Proportion of the global population living in urban areas: 2% (pre-industrial period)  46% (2001) ( ~160,000 people added to world’s urban areas each day)
    • 18.3 UN projections: by 2050, ~63% of world’s people will be living in urban areas, with 90% of this urban growth in developing countries
    • 18.4 Number of large cities (>1 million people) increasing rapidly throughout the 20 th century. In 1900: 19 cities had >1 million people (95% of the population then were rural) and in 2001: more than 400 cities have >1 million people.
    • 18.5 Urban growth is much slower in developed countries than in developing countries (still, projection: 79% (current)  84% (2025) in developed countries)
  • 19. Urban Problems
    • 19.1 Urban area suffers from:
          • Very high unemployment
          • A soaring crime rate (robbery, assault, murder)
          • Severe noise pollution
          • Bad traffic congestion
          • Inadequate housing (>1/3 of the people living in slums with no running water or electricity)
          • Inadequate sanitation (  widespread infectious diseases such as hepatitis)
  • 20. Impact of Urbanization on Environment
    • 20.1 Survive only by importing food, water, energy, minerals, and other resources from somewhere else
    • 20.2 Produce vast quantities of wastes
    • 20.3 Affect the health of their inhabitants but also the environmental health of rural areas and the health of the planet
    • 20.4 Often, agriculture and cities develop in similar areas  expanding urban areas = using up agricultural land
  • Water Fuel Food Daily Inputs U.S. city of 1 million people Daily Outputs Air pollutants Rubbish Sewage Urbanization
  • 21. Conclusion
    • 21.1 Population control is fundamental and essential as to avoid long term damage to the environment as a consequence of acid rain, green house effect and possible Global Warming, and the threat to the ozone layer.
    • 21.2 ‘Development is not purely an economic phenomenon but rather a multi – dimensional process involving reorganization and re orientation of the entire economic and social system.
  • THANK YOU!