Chapter 9 - Economic Development and the Americas

What are the 5 stages of economic development according to Walt Rostow? (Study what each means

1. The Traditional Society

2. The Pre Conditions for Take-off

3. The Take-Off

4. The Drive to Maturity

5. The Age of High Mass Consumption

What are the characteristics of a More-Developed Country (MDC)? Of a Less-Developed Country (LDC)? Of a Least-Developed Country (LLDC)?

MDC = PCI is $14,000 or higher

LDC = PCI is between $500 and $14,000

LLDC = less than $500

What is one of the major factors that actual foster the rapid growth of the NIC’s

Privatization of state-owned enterprises (SOEs) that placed a drain on national budgets

What is the role of State Owned Enterprises in the development of NICs?

They are privatized

What is the role of infrastructure in economic development?

Infrastructure represents those types of capital goods that serve the activities of many industries. The quality of an infrastructure directly affects a country’s economic growth potential and the ability of an enterprise to engage effectively in business.

The less developed country is the less adequate the infrastructure is for conducting business. Countries begin to lose economic development ground when their infrastructure cannot support an expanding population and economy

How does marketing change as countries develop?

The level of market development roughly parallels the stages of economic development. The more developed an economy, the greater the variety of marketing functions demanded, and the more sophisticated and specialized the institutions become to perform marketing functions

What is “economic dualism?”

When you have two economies inside of a country–when one half is developed and the other half is poor/less developed

What are some of the important traits of Big Emerging Markets (BEMs)?

• Are all physically large

• Have a significant populations

• Represent considerable markets for a wide range of products

• Have strong rates of growth or the potential for significant growth

• Are “regional economic drivers”

• Will engender further expansions in neighboring markets as the grow

What is the present economic situation of emerging markets in the Americas?

• Region is vulnerable to downturns in the world economy

• Many countries in the region are commodity dependent

• Social unrest

• Nearly 50% of the people live in poverty

• Governments are not spending enough infrastructure

• Government red tape continues to strangle business

• High unemployment

• Competition from China in textiles and home appliances

• Direct foreign investment is slow/biggest capital inflow are remittances

The Traditional Society:

country has no capability to increase level of productivity

The Pre Conditions for Take-off:

country starts applying scientific advances to agriculture and production

The Take-Off:

growth pattern becomes a normal condition

The Drive to Maturity:

economy takes on international involvement (exports)

The Age of High Mass Consumption:

economy shifts to consumer goods and services; many people have high discretionary income