Theories and measures of poverty and development

What is Wallerstein’s World Systems Theory

That there is an international division of labour, with developed nations providing money to poorer countries in exchange for cheap labour and natural resources

What exploitation does Wallerstein talk about?

The origins lie in colonisation, but now exploitation of TNCs is more important

What are the 3 types of nation in the world systems theory, what’s their roles?

Core Nations, Semiperiphery and periphery nations.

Core provide money to the periphery in exchange for cheap labour and resources.

Semiperiphery are middle income and industrialising countries, like BRICS

Why is the existence of semi periphery nations important for the system to function

As it provides hope for periphery nations that they can develop and become wealthier, more likely to accept the system.

How is this different to Marxist viewpoints

There isn’t a monolithic working class and bourgeoisie. The working classes in core nations benefit from the exploitation in periphery nations.

What are the methods of extracting profit from poor countries in the world systems theory

1. Unfair trade rule - EU and US subsidise their farmers, making imports less competitive.

2. Western TNCs negotiate favourable tax deals in developing countries, e.g. Glencore exports $6billion a year in copper from Zambia, yet pays just $50 mil in tax, in fact costs govt $150 mil on increased energy costs.

3. Land grabs - TNCs buy 1000s of acres of land in Africa, plant food or biofuel crops and exports back to western markets

What is the core of Andre Frank’s dependency theory?

The colonisation of Africa and Asia has created deeply embedded structural inequalities that persist in the form of imperialism, they were governed solely to benefit the colonising power.

Landlocked countries - why important?

About 30% of Africa live in a landlocked country, many of which came to exist following the carving up of Africa by European powers in the 1885 Berlin conference.

This has led many countries to be very poor as have little ability to trade without ports

effects of colonisation

• Has made poor countries dependent on rich countries: by creating mono crop economies which are reliant on exports to the colonial masters

• Destroyed functioning local economies, like subsistence farming communities

• Fuelled ethnic divisions within colonies - they employed willing natives to run local govt on their behalf, which fuelled divisions in society. Belgium split up the Tutsis and Hutus based on physical appearance, gave Tutsis power then switched this to Hutu. Created id cards with their ethnicity on. This precipitated one of the most rapidly deadly genocides of all time - 800,000 killed in just 100 days

• Neo-colonialism - vulnerable economies reliant on cash crops and unable to process goods into more valuable outputs

What’s another major factor of inequality, aside from colonialism

Political and economic geography

Counter point to dependency theory

Ethiopia was never colonised but still experiences underdevelopment, shows there’s no direct correlation

Globalisation can also provide opportunities for development, not just entrench inequality

Corruption has been the root of instability of many poor countries, may have been caused by power vacuums left by decolonissalisation

What’s the Brandt line, differences between the global north and south

Developed in 1980 it splits the world into two parts:

North : ¼ of population, 4/5 of income, life expectancy >70 yrs, sufficiency food, good education , 96% of global r & d

South; life expectancy. = 50 years, 1/5 suffer from malnutrition or hunger, ½ have no formal education

How is the Brandt line still relevant today?

• TNCs from the global North exploit the south for cheap resources and labour

• Extreme poverty and income inequalities are still a feature the global south

• Global north architects of WTO World Bank and IMF

• Countries in the global north have used agricultural subsidies to make imports in the global south less competitive

How is the Brandt line no longer relevant

• doesn’t take BRICS into account which have recently experienced industrialisation

• China accept to become the worlds largest economy by 2030

• Argentina, Brazil, India and South Africa, are part of the G20

• The extent of the north south divide depends on the metric used

Findings of a study about the north south divide globally

• absolute average income gap grew between 1980 and 2015

• Growth rates lower in the south

• The 75th percentile in the south equals 25th percentile in the north

• There’s been a lot of change amongst the global south but few countries have overtook states in the north in that time.

• Would aggregate economic power has risen in the south?

What is absolute poverty?

When a person can’t afford the minimum nutrition clothing or shelter for survival

What’s relative poverty ?

A measure relative to the mainstream material expectation of a country. Often household income below the 50% of the median income of the country

What’s multidimensional poverty?

Poverty and other aspects of life away from income like electricity access to sanitation, clean drinking water or education

What’s HDI?

A measure of health, schooling and standard of living it uses life expectancy mean years of stalling and GNI per capita

How is HDI influenced by modern liberalism?

It measures the opportunities and choices that people have to develop their potential linked to positive freedoms

Key takeaways from global inequalities

• trend towards extreme wealth and income concentration had dramatically strengthened the economic and political power of the global elite

• The elite exercise disproportionate level of influence over TNCs and government

• A disproportionate number of the global poor are women and non-white

• The richest 1.5% on 48% of the worlds wealth

• Wealth of the richest 26 people in the world with a net worth of over $50 billion is greater than that of Italy Brazil, Canada or Russia

What’s the G7?

Established in 1975 they represent the wealthiest countries. It used to be the G8 but Russia was suspended in 2014 due to its invasion of Crimea.

G7 stats

Make up 10% of the worlds population but 45% of global GDP, USA contributes half of this

Members of the G7

USA, Germany, Japan, UK, France, Italy, Canada

What does the G7 do?

It meets annual instead of global economic and political issues. It is an informal event no decisions made a binding and they invite a wide variety of guests, like EU or NATO heads.

How is the G7 more than just economic?

It is a bastion of western liberal democratic and encapsulate values bound together by similar political and ideological beliefs

What actions has the G7 undertaken?

• debt cancellation agreements – they cancelled 130 billion of debt for 36 developing countries however most have now taken out a new loans creating a new debt trap

• They agreed introduce a minimum corporate tax rate of 15% to stop tax avoidance however this has yet to come into effect

• They reaffirm Pledges of COP, limiting CO2 emissions and preventing temperatures by rising then more than 1.5 degrees by 2050

• Committed to rolling out 1 billion doses of the COVID-19 vaccine

Criticisms of the G7

• it is reactionary they rarely shape international events

• No mechanism to hold it members to account

• Maybe elitism as its whole purpose is to propagate and maintain the global neoliberal economic hegemony