APHG Chaper 10

Self-sufficiency

• No foreign ownership of business and resources

• Protect their businesses from international competition

  • Barriers limit the import of goods (tariffs or quotas)

  • Baby businesses are nursed to success

  • Investment is spread as uniformly as possible

International trade path

• Become more pop in the late 20th century

• Important for a country to determine its distinctive or unique economic assets (like animal, vegetable, or mineral) or what they can make cheaper or better than someone else

  • Comparative advantage

  • Many former colonies were resource rich, so after colonization, people still do shit

Rostow’s Model of Development

• Traditional society (primary activities and little to no tech)

• Preconditions for take-off (starts putting in infrastructure)

• Take-off (rapid industrialization + culture change)

• Drive to maturity (expansion of secondary sector + tertiary sector development to support institutions)

• Age of high mass consumption (expolit comparative advantage over LDCs)

Limitations of Rostow

• Assumes all desire to embrace modern/western ideas (everyone wants to earn money, but is that true?) (ethnocentrism)

• Requires exploitation of developing countries

4 Asian tigers/dragons

• South Korea

• Singapore

• Taiwan

• Hong Kong

Arab Gulf States

• Saudi Arabia

• Kuwait

• Bahrain

• Oman

• UAE

World Trade Organization (WTO)

• Goal is to reduce barriers to international trade

  • No favorites

• Criticisms: everything’s behind closed doors, and they think large corporations are influencing these decisions

• Also the WTO has too much power (sovereignty diminishes)

• WTO rules stand between dying people and the medicine that will save their lives

Microfinance

* Method to increase access to finance (loans) in developing countries with poor banking systems
* Scale reflects local or subnational needs

Muhammad Yunus

Nobel peace prize winner for establishing Grameen Bank in Bangladesh (rural and female recipients)

Stimulus strategy

gov. spends more to stimulate more aspects of society/development

• Spend more than they collect

• Democratic thing

Austerity strategy

gov spends less so people can recover

• Reduced taxes + reduce spending on public programs

• People on the lower income scale struggle a lot more

Structural adjustment

• If a country takes out loans its unable to pay, other economically healthy countries will help them out

• Get a roadmap of how to pay off their loans

• Detractors of structural adjustment programs

• Poverty worsens

• Cut social services

Fair trade

• Producers: greater share of price

• Workers: fair wages, rights

• Consumer: cooperative stores

Site factors

labor, land, and capital

Situation factors

relates to the proximity to inputs or consumers

Labor-intensive industry

industry where wages and employee payments constitute a high percentage of expenses

Bulk reducing

weight/volume of the final product is **less** than the weight of the raw material

Bulk gaining

the final product is heavier than the raw material that requires transport, or harder to ship (factory is closer to market)

Degree of agglomeration

lots of businesses are nearby and share the overhead costs (cost of doing business regardless of what it is)