This document discusses factors that contribute to global and domestic inequalities. It introduces dependency theory, which argues that poorer countries are disadvantaged in the international system through exploitation by richer countries. Global factors like colonialism created economic gaps by exploiting resources from colonies. The structure of the world economy also favors richer nations. Domestically, overpopulation, unemployment, and the legacy of colonial social divisions contribute to inequality. Dependency theory asserts that underdeveloped countries must isolate from capitalist states to gain independence.

1. FACTORS THAT CONTRIBUTE TO
GLOBAL AND DOMESTIC INEQUALITIES
PREPARED BY:
MOHD FARID BIN MD YUNOS (MB123034)
NADZIRAH BINTI HOSEN (MB133015)
RABIATUL ADAWIYAH BINTI ABD KHALIL (MB133011)
YEOH WEI CHERNG (ME131053)

2. •
•
•
•
Introduction
Dependency theory
Dependency theory and global inequality
Factors that contribute to domestic and global
inequalities.
• Case Studies
• Conclusion

3.  The emergence of global inequality as a theme implies a horizon that is
global and adopts human equality as a norm. Equality as a general
sensibility arose with liberalism and socialism. (Franklin, 1997)
 As a theme global inequality goes back by and large to the midtwentieth century. As a global sensibility it is part of the postwar era
shaped by the United Nations and the adoption of the Universal
Declaration of Human Rights. UN agencies such as the UNDP, UNRISD,
UNICEF and UNESCO have done much to monitor world-scale
inequality. (Nederveen, 2002)
 Global inequality evokes what has been termed the ‘second great
transformation’, the transformation from national market capitalism to
global capitalism.
 Inequality is generally used to refer to income. However, income
inequality is not a comprehensive way to look at inequality. In fact,
there are other aspects such as financial and land assets, or health and
education, which should be taken into account. It may be argued that
investigating income inequality is nonetheless quite effective because
it is strictly correlated with other inequalities in areas such as land and
education. (World Bank, 2000)
Points of triangle able to represent the relationship
between globalization, growth & inequality.
Inequality is related to dependency theory in term
of socio-economic transformation in a region (third
world country in relation with developed country).

4. Dependency Theory
Rich
CC
Dependency
Theory
PC
The rich
corporate with
one another
Argument:
There are different kind of states in the
world that performs different functions in
the world economy
Poor
Marxism
Metropolis or
core nations
Capitalist
class
exploit
CP
PP
Satellite or
peripheral
countries
exploit
Working class
SIMILARITY
CC – Centre of the Centre: The richest most & powerful country - US, UK, France
PC – Periphery of the Centre: Industrialized wealthy country – Canada, Japan
CP – Centre of the Periphery: Still developing but they have fair amount of wealth – India, Brazil
PP – Periphery of the Periphery: Poorest country – Cambodia

5. Rural
Rural
Metropolis
Dependency
Theory
Depend on
 Introduced by Karl Marx
Rural
Rural
Peripheral
(Dependent)
More
disadvantage
rather than
advantage
• Natural resources being exploit
• Loss control over their own market
• Purchase goods with higher price
• Slow improvement on technology and
knowledge
Output
Developing / Less
Developed
Depend on
• Capital
• Technology & Facilities
• Knowledge & Equipment
More
advantage
rather than
disadvantage
Centre
(Domination)
• Create job opportunities
• Purchase goods with lower price
• Improve technology and knowledge
Output
Developed
Country

6. DEPENDENCY THEORY AND ITS RELATION TO GLOBAL INEQUALITY
Argument on International system characteristics based on dependency theory:
Why are so many
countries in the world
are not developing?
•
•
International
system
preventing them
from doing so
International
system is
exploitative characterize by
the dominant of
some countries
over others
a.
International division of labour between or of these countries
•
•
b.
Class distinction
•
c.
Centre dominate the industry, technology, research capital and intensive
industries
While the periphery produce cheap labors and resource extraction occurs
in this region
Each of these different types of countries around the world has clear
division between the rich and the poor - this rich people are the political,
elite – all the rich corporate with one another to ensure they stay in power
and increase their wealth - they collaborate with each other to maintain
the system the way it is.
Global capitalism
•
all of these structures - the labour , class distinction occur in wider global
distinction - liberal economy dominate theories of finance - which serve
the interest of the core countries - multinational corporations & banks in
this system are instruments of rich people in the core countries international institutions like the world bank - international monetary - all
serve the rich countries and people of the world

7. DEPENDENCY THEORY AND ITS RELATION TO GLOBAL INEQUALITY
• All serve the interest of the wealthy - they don’t serve the interest of
developing countries - they don’t promote development or equal
opportunities instead the system promote dominance and exploitation so from dependency perspective - how can state developed in this kind
of system that actually designed to prevent them from developing
• And dependency theory call this underdevelopment - as a result the
system promote underdevelopment of countries around the world and
that is why it is not seen countries develop in the way that traditional
economic theory describes.

8. GLOBAL
FACTORS
•Laid foundation for economic
gap between rich and poor.
•Colonial powers exploited
resources of the local peoples
and enslaved, massacred and
subjugated the population
•Local populations were forced
out of their fertile lands
•Taxes were imposed on
colonies to be paid in cash
which was difficult for
traditional farmers to get.
influenced/causing
DOMESTIC
FACTORS
GLOBAL FACTORS
Colonialism
and its
legacies
Factors that contribute to
inequality
Overpopulati
on
•Number of people in a
group
exceeds
the
carrying capacity of the
region
occupied
by
group.
•Relationship
human
population
&
environment.
Structure of
world
economy
•The structure of the global economy is
particularly unfavourable to developing
countries, where tax revenues and other
benefits often fall short of what is
necessary and appropriate.
•The interests of richer countries also
predominate in ownership and control of
new knowledge.
•Rights and opportunities over vital
sectors including information technology
and pharmaceuticals are concentrated in
the richer economies.
Unemployme
nt or having
poor job
DOMESTIC FACTORS
•Unemployment rates are
a measurement of
economic insecurity.
•Since 1995,
unemployment is up
over the last 10 years in
every developing region.

9. POPULATION
• 5th largest country in the world
• 203 million by July 2011
• 22 people per km²
• 2/3 of population are under age 30
BIRTH & DEATH RATE
• 18.83 births per 1000 population
• 6.35 death per 1000 population
• Average life expectancy is 72.6 years
LIVELIHOOD
• 60% of the population lives in poverty (huge inequalities)
• Average income per capita was €2,237
• Over 40 million live on less than €1 per day

10. Classic Colonial Trade
Pattern
Neo - colonialism
From Economic point of view :
 Brazil’s main function was to export its raw materials and unprocessed agricultural
products to Portugal and other Western countries (Europe and US).
 Brazil had little control over the price paid for these product and for this reason the
economy fluctuated as the price of these commodities went up and down. These large
changes in Brazilian economic growth made it hard to plan for investment in
infrastructure, education and health care.
 After World War 2, instead of exporting cheap raw material and importing expensive
manufactured goods, Brazil invested in home grown manufactured goods and put high
taxes on imported manufactured products to keep them out of the markets (Imports
Substitution Scheme).
 However the import substitution scheme it cost a lot of money which Brazil borrowed
from international banks (increase debts). The world reduce their demand for Brazil
products and make it hard for them to repay their debts.

11. From social point of view :
 Brazil has been a very divided society where the gap between the poor and rich has been
much wider than in European countries.
 Portuguese imported huge numbers of African slaves to work on the sugar and coffee
plantations. The African slave was abolished and their descendants continued to be poor,
uneducated, unskilled labourers.
 The wealth and land of Brazil was in the hand of a very small minority of colonists
(Portuguese descendants).
 As a result, today ,black Brazilian are more likely to be poorer and uneducated than white
Brazilian European descended Brazilian.
 This big gap between rich and poor led to a lot of political unrest as people in Brazil
demanded changes. Then, for the 20th century Brazil was ruled by a military dictatorship due
to the political unrest caused by this huge inequality.

12.  Thus, based on above statement and case study, the critiques of
dependency theory can be leveled within a nation (Domestic) as well as
internationally (Global).
 How to eliminate DEPENDENCY THEORY ???
 Under-developed regions need to isolate
from Metropolis or the capitalist states.
PERIPHERY
“Satellites”
Then, they will have gain independence.
CORE
“Metropolis”
Industrial
Goods
Food, Raw
Materials

13.  Ahmad Shukri Mohd Nain dan Rosman Md. Yusoff (2003), Konsep, Teori, Dimensi & Isu Pembangunan,
Universiti Teknologi Malaysia Skudai, Johor
 Yves Keller, Inequality and Economic Growth in Brazil, Bachelor’s Thesis, Department of Economics in
University of Zurich
 Franklin, J (ed) (1997) Equality (London: Institute for Public Policy Research).
 Nederveen Pieterse, J (2002b), Globalization, kitsch and conflict: Technologies Of Work, War And Politic,
Review of International Political Economy, 9 (1), pp 1–36.
 World Bank (2000) A Better World for All (Washington, DC: World Bank).