1. Bridging the Development Gap
Development Gap – The difference in income and quality of life in general
between the richest and poorest countries in the world
Food Crisis
Before
Cheap imports
Low interest rates – cheaper property
Food surpluses
After (2006)
Price of rice rose by 70% between 2007/08
Poor harvests
Growth of biofuels reducing land available
Rising demand
Hoarding of rise
Rising oil prices
Speculators predicting food futures
Lead to several govts banning the export of rice
Philippines
1990s was self sufficient, by 2008, was worlds biggest importer, due
to urban development and population growth
Troops had to distribute rice
Restaurants advised to give half portions of rice
Identifying the Development Gap
North-South Divide
1981, the Brandt Report was created
Showed the ‘North’ had 80% of wealth (1/3)
Measuring the DG
GDP – value of products produced in a country over a year, also can
be changed into GDP per capita showing the average income
GNI – Shows the income from overseas investments, and profits
from subsidiary overseas firms – many wealthy countries earn
money this way
GDP/GNI do not show what per capita is worth in terms of
spending power and taking into to account the cost of living
2. PPP – To show what per capita income would purchase when the cost
of living is taken into consideration (Several currencies expressed
in one currency)
HDI – Measures quality of life – life expectancy, education
(literacy and length), GDP per capita
Below 0.5 = low level of development >0.8 means high level
Uganda
Green, fertile, rainy seasons, half population of UK, similar land area
Good resources
HDI = 0.505, UK = 0.946
GDP per capita - $1454 (4.4% of UK)
Based on export of primary products, meaning low income
24% of families undernourished
Poorest 20% infant mortality – 106/1000
HIV/AIDS – average life expectancy – 49.5years
60% have access to clean water
Now only 6% of population are HIV-positive due to awareness
Education – 17% of girls attend primary, 1/30,000 students allowed to
uni
The Debt Crisis
Before, several countries self-sufficient, stable and low debt
Oil price rise meant OPEC received more money, put money in banks
Banks lent money out, but interest rate rises, increased payments
Several countries could not pay debt
IMF helped refinance loans, but only if cuts in govt budgets were
made
Highly Indebted Poor Countries
38 countries, (32 in s-S Africa)
Pressure for NGOs to reduce debt burdens
2005 -G8 met, and cancelled $40billion worth of loans from
18countries, as long as good financial management occurred, less
corruption and money saved was spent on education, healthcare, and
poverty reduction
2008 27/38 countries met conditions for debt relieve saving
$85billion
3. Impacts of Debt Cancellation (Uganda)
20% increase in public services spending (40% on education,
70%health)
Free primary schooling introduced
2.2 million have clean access to water
HDI rise – 1985 -0.420, 2005 – 0.505
Core and Periphery
Core areas drive the world economy, were first industrialised, from
investment from prosperous farm economy
Peripheral lack capital, tend to export primary resources
Core import, process and add value
Global shifts to periphery due to cheap labour
Neo-liberalism
Promotes free market theory and the private sector
Reduced government influence
However, in many developing countries, many feel that threats such as
poverty can only be helped by govt help
South Africa
Large reserves of diamonds and gold, several tourists
Income inequality rates are high – privatisation gave whites chance to
become richer
Unemployment has reached 30%
Over 18,000murders a year, crime rates are high
New black political party, privatised several industries in 1994 to
attract investment
Most economic growth was due to capital intensive
Apartheid – segregation between blacks and whites
50% SA’s population under 18
Inflation between 14-20%
Cuts in health spending
Large regional and ethnic inequalities
4. Bangalore
Specialises in IT, banking and finance
Has 40% of IT workforce, attracting foreign investment – outsourcing
Hubs designated to firms such as Electronic City
Tax breaks, low wage rates attract firms
Has highest average incomes in India
Caste system – Religious and social class system – defined by birth and
family – this discrimination has been made illegal, but still occurs
More housing needed, public transport, energy, airport
Trade or Aid
Many countries donate 0.7% of GDP to developing countries
However, trade may be more effective – multiplier effect
Uganda
Uganda’s independence from Britain, lead to Idi Amin to take over, and
exported commodities such as cotton and tea dramatically decreased
Amin now left, growth is achieved but not filtered to the poor
Uganda lent money by IMF – if tariffs were removed
Privatisation lead to unemployment as firms became more efficient
Cuts in govt spending
Good economic growth average, reduced poverty
Low average income, income inequality
Free trade or Fair Trade
WTO put pressure on EU subsides on sugar
NGOs such as Oxfam put pressure on rich countries
Uganda must also remove trade barriers to gain access to EU markets
Uganda has fluctuating economic capacity
Poor infrastructure
Leaves Uganda vulnerable to global, more competitive competition
5. Aid or Investment?
Investing in large projects, this has the multiplier effect such as
creating jobs and getting money to the poor
Top-down development can have a greater influence and larger
investment
Bottom-up occurs on a community level – projects designed to benefit
them
Aid – loans, agreements such as purchase of a countries exports
Investment – firms locating in a country
Projects combining aid and investment such as the Akosombo Dam
Akosombo Dam
(A&I)
Ghana’s
Aluminium
Smelter
(A&I)
The Pergau Dam
Malaysia
Aid
Electricity production – self sufficient, exported
Many Ghanaians can not afford electricity
Increased water transport inland
80,000 people forced to relocate due to flooded land
Lead to increase in tourism and irrigation
Decline in shrimp population meaning people have less protein
in their diets
Increase in water-borne diseases
US firm Kaiser Aluminium built smelter in Ghana
Ghana has several deposits
Mined by a Ghanaian firm, 80% owned by US firms
Electricity owned by Alcan – HEP plants
Ghana’s added value Aluminium going overseas
Govt bought smelter to increase control, but closed due to
lack of water in 2008
Built with £234million of British Aid
Deal was that Malaysia would purchase £1billion worth of
British built fight jets, despite laws not allowing
The Dam was built and organised by British firms
Lead to flooding of fertile land
No long term benefit, cheaper to invest in gas station
6. Uganda
Bottom-up aid
Kingship Project
Aid
The Millennium Development Goals
Eradicate poverty and hunger
Achieve higher education
Global partnerships for development
Environmental sustainability
Improve child mortality rates, HIV and AIDS
Progress?
Increase in children at school
More people receiving AIDS treatment
Economic growth
980million still live on loess than a dollar a day
Private sectors increasing
NGOs, faith groups and professionals helping out
Critiscm
Village of Barlonyo, experienced a 300kill massacre
Support of NGOs allowed a democratically run cooperative to
be ran
Farmers have equal say in decisions, females have more power
Cooperative allows better cooperation such as sharing the
costs of hiring a truck for harvests
Extra income allows schooling for children
NGOs have also invested in improving farm output
Run by a school, a club, and a Christian organisation
30% of Moldavians live in poverty
Suffer from emigration
Poor literacy, school attendance and health rates
Community centre built – allowing food preparation, showers,
study area