Section Development Vocabulary

Blanc. 24-25.

economic development

the process by which a nation develops the well-being of its people measured by improvements in standard of living, reduction in poverty and improved health and education

sustainable development

economic develop that meets the needs of the present without compromising the ability of future generations to meet their needs

statistics used to measure economic development

literacy rate, life expectancy, per capita GDP, energy consumption, internet usage per 1000, unemployment rate, and inflation rate

human development index (HDI) measures…

life expectancy, national income, and years in school

natural issues of developing countries

lacking, owned by multinationals, and unable to be harnessed

human issues of developing countries

overpopulation, high levels of unemployment/underemployment, low productivity of labor, poor health care, low levels of literacy, overdependence on agriculture, malnutrition, lack of educational facilities, few entrepreneurs, repressive governments, and brain drain

brain drain

the best and brightest individuals leave their country to study in a better country only to like the new country more and stay there

money and capital issues of developing countries

poor facilities, debt, capital flight (brain drain for your money and investors), lack of incentives to invest, poor or failing banking system, weak currency, low return on investment, poor infrastructure, dependence on foreign countries, and poverty cycle (low income —> low investment)

technology issues of developing countries

lack of appropriate tech, hard to upgrade tech, lack of skilled-labor places over-reliance on tech.

sociocultural issues of developing countries

allegiance to things other than nation, religion

institutional factor issues of developing countries

political instability, corruption, lack of legal system, every nation is different

millenium development goals

• eradicate extreme poverty and hunger

• achieve universal primary education

• promote gender equality and empower women

• reduce child mortality

• improve maternal health

• combat HIV/AIDS, malaria, etc.

• ensure environmental sustainability

• global partnership for development

sources of economic development in the country itself

• improve role of women in society

• provide infrastructure

• provide public goods

• provide encouragement for cultural reform

• promote trade and entrepreneurship

Harrod-Domar growth model

• increase the motivation to save

• more efficiency in the use of capital and resources

Lewis model

• more focus in the manufacturing sector

• reinvest profits back into the manufacturing sector

• those who are unemployed are trained for a manufacturing job

open economy strategy

more exports, deregulation, free trade, promote foreign investment

import substitution strategy

focus more on domestic production to create local jobs and keep local culture

role of advanced countries in assisting developing countries

• expand trade (decrease trade barriers)

• provide foriegn aid

• provide the appropriate help

• World Bank which can provide financial aid, advice, and low interest loans

• International Monetary Fund (IMF) can provide financial stability

• private capital (direct investment)

• microfinance

Fairtrade Labeling Organization (FLO)

• international body that ensures that farmers and textile merchants receive a fair deal when selling their products

• certifies that food and clothing products from developing countries meet standards

• stamps products with a seal, which lets consumers know that the seller in teh developing country receive fair value

• traders of products in the FLO system agree to purchase products at a fair value

• works with developing country sellers to educate them in successful business strategies

World Trade Organization (WTO)

• international body that sets the rules for global trading

• hosts negotiations to try to reduce trade barriers

• settle international trade disputes

• provide technical assistance

• encourages economic integration

Perferential Trading Area (PTA)

an agreement between two or more countries to reduce trade barriers with each other

Free Trade Area (FTA)

an agreement between two or more countries to trade freely with each other, but trade with others outside of the agreement as they wish

Customs Union

an agreement between two or more countries to trade freely with each other and in addition, set common external barriers against other countries outside of the agreement

Common Market

a customs union with common policies on resource and product regulation