Factors That Influence Development 2


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Social, cultural and Environmental factors that affect Caribbean development

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Factors That Influence Development 2

  1. 1. Factors that influence Development Economic
  2. 2. Development & The productive sector <ul><li>Development cannot occur without a vibrant economy or productive sector. </li></ul><ul><li>The productive sector can be classified into </li></ul><ul><ul><li>The primary sector or extractive industries (fishing; forestry; farming; mining) </li></ul></ul><ul><ul><li>The secondary sector or manufacturing industries (the processing of raw materials in factories e.g. agro-industries, bauxite smelting, bottling & canning </li></ul></ul>
  3. 3. <ul><li>The tertiary sector or services e.g. teaching, insurance, retailing, banking, transport, tourism </li></ul><ul><li>The quaternary sector – R & D ; computer- and knowledge-based industries that do not need a specific location (‘footloose industries’) </li></ul>
  4. 4. Caribbean historically.. <ul><li>Colonial Caribbean was treated as a primary producer of raw materials which was exported to Europe for processing </li></ul><ul><li>No tradition of manufacturing </li></ul><ul><li>Today </li></ul><ul><ul><li>Developed tertiary sector – tourism </li></ul></ul><ul><ul><li>Possibility of developing a quaternary sector – e-commerce </li></ul></ul>
  5. 5. Distribution Sector <ul><li>Goods are distributed from the producer to the retailer and consumer. </li></ul><ul><li>The distribution sector provides: </li></ul><ul><ul><li>Employment </li></ul></ul><ul><ul><li>Source raw materials at cheaper prices and this lowers the cost of production for local producers </li></ul></ul>
  6. 6. Factors that influence the productive sector And therefore development
  7. 7. Competitiveness <ul><ul><li>Agricultural goods & manufactured goods produced in Caribbean are high-cost items. </li></ul></ul><ul><ul><li>This results from high labour costs compared to other developing areas. </li></ul></ul><ul><ul><li>Caribbean agricultural products depended on preferential protection from European countries </li></ul></ul><ul><ul><li>Possible Solution: </li></ul></ul><ul><ul><ul><li>Mega farms & mechanization??? </li></ul></ul></ul><ul><ul><ul><li>Green houses for high valued crops?? </li></ul></ul></ul>
  8. 8. Demand <ul><li>Low demand for goods produced ( clothing; handicraft; beverages; paper napkins; cosmetics; appliances ) in the Caribbean both within and outside the region. </li></ul><ul><li>Solution: </li></ul><ul><ul><li>‘ Niche products’ - Caribbean foods & preserves ( jerk seasoning; confectionery; pepper sauce; ketchup; coconut milk ) in diaspora (Caribbean people in New York, London & Toronto) </li></ul></ul>
  9. 9. Question <ul><li>Suggest ways in which the tourism industry in the Caribbean can further advance development in the region. </li></ul><ul><ul><ul><ul><ul><li>30 marks </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>DUE: MONDAY 20 th OCTOBER, 2008 </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>MORNING LESSON </li></ul></ul></ul></ul></ul>
  10. 10. Productivity <ul><li>Agriculture has low productivity – manual labour </li></ul><ul><li>Automated operations show higher production rates per worker but workers need to be well-educated & highly skilled (oil & petrochemicals; micro-electrics; networked systems) </li></ul><ul><li>Solution: </li></ul><ul><ul><li>Opportunities for post-secondary training </li></ul></ul>
  11. 11. Infrastructure <ul><li>Problems in some Caribbean countries </li></ul><ul><ul><li>Telephone systems not fully functioning </li></ul></ul><ul><ul><li>No reliable & safe transport system </li></ul></ul><ul><ul><li>Long delays at ports </li></ul></ul><ul><ul><li>Complicated bureaucratic procedures in Ministries of Trade & Industry) </li></ul></ul><ul><ul><li>Solution: </li></ul></ul><ul><ul><li>institutional framework must recognize producers as partners </li></ul></ul>
  12. 12. Investment Climate <ul><li>Private domestic investment & Foreign Direct Investment (FDI) high but.. </li></ul><ul><li>competition from other developing countries where labour cost is lower </li></ul><ul><li>We need to </li></ul><ul><li>Improve Productivity </li></ul><ul><li>Economic diversification </li></ul><ul><li>Encourage entrepreneurship – subsidies & loans for R & D </li></ul>
  13. 13. Debt <ul><li>Interest on debt can cancel out growth in GDP </li></ul><ul><ul><li>Huge infrastructure projects – e.g. airports </li></ul></ul><ul><ul><li>Education reform </li></ul></ul><ul><ul><li>Cost overruns </li></ul></ul><ul><ul><li>Corruption & mismanagement </li></ul></ul>
  14. 14. Debt – level of indebtedness to foreign loan agencies <ul><li>OECS – debt doubled between 1997 & 2003 </li></ul><ul><li>Belize – 100% increase in debt in 2003 </li></ul><ul><li>Dominica – debt crisis </li></ul><ul><li>Guyana & Jamaica – long-standing debt commitments </li></ul><ul><li>SOURCE: WORLD BANK , 2005 </li></ul>
  15. 15. External Shocks <ul><li>Caribbean vulnerable to adverse global circumstances e.g. </li></ul><ul><ul><li>Europe’s preferential treatment of ACP bananas discontinued – St. Lucia & Dominica </li></ul></ul><ul><ul><li>Increase in energy prices </li></ul></ul><ul><ul><li>Increase in world food prices </li></ul></ul>
  16. 16. Technology <ul><li>Information & Communication Technology (ICTs) </li></ul><ul><ul><li>inadequate in region </li></ul></ul><ul><ul><li>Cannot compete in globalizing market </li></ul></ul><ul><ul><li>We need to: </li></ul></ul><ul><ul><li>Upgrade electronic communication </li></ul></ul><ul><ul><li>E-marketing & e-commerce </li></ul></ul><ul><ul><li>Promote products online </li></ul></ul><ul><ul><li>Develop Networking infrastructure </li></ul></ul>