Chapter 6 – Development

Development is a concept that we have created. While it is good for us to be able to measure this, we have assumptions
and biases that stop us from being objective.

What is in a name?

“Those who have and those who have significantly less”

US president Harry Truman – inaugural address introduced ideas of development (1949)

Marshall Plan (1948) – the start of this concept of development

 A very specific plan of giving money as aid or gifts to primarily European countries post-WWII to make sure they
did not become communist

Under Stalin, around 1/3 of the world began to believe in communism and he had an expansionary policy.

The USA tried to combat this by always creating a comparison to identify & give incentive to the USA to help a particular
country.

Types of comparisons:

 Developed / underdeveloped countries

 First world / third world countries
 Global north / global south

However, these labels become internalized and believed and countries start to be stuck in specific.

How do we measure development?

The first way of measuring development was only based on economics and we can see how this is limited and not
accurate.

So, they came up with the idea of the Human Development Index (HDI):

Three factors:

o Long and healthy life (life expectancy)

o Knowledge (expected & mean years of schooling)
o Decent standard of living (GDP per capita) – the economic

How do these factors judge development?

Long and healthy life

- If there is war, famine or some kind of disaster, this index will fall.
- In general, if your population is dying young the country cannot develop very quickly

Knowledge

- In general, if your population has a good educational system, it means that the country has more skilled labor &
is ultimately more developed.
Standard of Living

- This is a judgment of the economic level, stability, & growth of a country.

Development on the HDI is measured on a scale of 0 to 1 (one being highly developed)

- If even one factor falls, the overall number/HDI value of a country will fall as a whole. However, because you can
see the rating of each factor, one can go into the details
- It also provides a sliding scale so that you can judge the state of the country based on more than just
“developed” or “underdeveloped”

Even for countries that have reached “highly developed” status, there is always room for improvement.

World development after the 1980s (after the world wars end)

 This is an important period to look at & difficult to judge the accuracy of because there are countries that closed
themselves off (Communist nations) and all you knew was what they portrayed to the world.
o This “cutting off” was called the iron curtain.

1990: We have broken the ceiling as it increased & the world is moving in the right direction – more development.

1991 – Soviet Union fell, so they are declaring to the UN (sharing their data).

2000s: We broke the ceiling and lifted it off the ground (the bottom went higher as well)

The 2015-2016 is important to look at because in 2010 there was an economic slump which caused a lot of countries to
fall.

China – why might this be surprising or important to look at?

 We think of it as a place that has a lot of economic power, we import a lot from China & we consider China to be
very open
 However, the other two indexes – education & life expectancy (one child policy) – were struggling
 As they have been investing into fixing these issues, their index has rose recently

Russia

 According to the map, it is developed & deep green

 The HDI is falling year after year – it is not economics or education but the population of Russia has been falling
 Analysts do not understand it. It is not war, nor drinking, nor low life expectancy for men.

However, when you “zoom in” you will see that the distribution of wealth, & therefore, development, is unequal in
every area of the country.

 This is true in every country & every HDI.

However, when countries ask for aid, the institutions that decide whether to provide aid or not look at the HDI
(average).

 Thus, maybe we are not helping countries as much as they need.

Racial inequality, gender education, gender inequality, & all other relevant factors would change the image of the world
as a whole immediately.
Development Goals:

In 1992, the UN had a world summit to discuss the levels of development. 189 countries agreed to create a
comprehensive plan of action that would help push countries to develop themselves more.

This created the first draft of ‘the millennium development goals,’ established in 2000:

1. Eradicate extreme poverty and hunger

2. Achieve universal primary education
3. Promote gender equality and empowering women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDs, Malaria, and other diseases
7. Ensure environmental sustainability
8. Global partnership for development

191 countries signed in 2000 to commit to work towards these goals by 2015

- This was not achieved because governments did not have the funds, were unwilling or unable to
- The responsibility lay on the governments & the private sector (businesses)

In 2015, they had success – lifted 1 billion people out of poverty & there was now 7 billion people in the world.

The UN Secretary General Ban Ki-Moon essentially accused the nations of not trying hard enough

- September 2015 – they created the SDGs & broke it down to 17 goals to achieve by 2030.
 193 nations adopted committing to work towards these goals
 Aid agencies, businesses, and the public working in collaborative partnerships

Development Theories

1. Modernization
2. Dependency
3. Market Fundamentalism

Each theory is mostly focused on the economic factors & development.

- These theories cannot coexist in a nation at any time

- They work independently
- Countries can shift their political theories over time

Modernization theory

 Development is industrialization (transition from manual labor to machinery for manufacturing)

o This is the focus & how the economy should be driven
 “West is the best” – follow the European model
o When you create an industry, people have jobs
o The items are made & can be sold & traded
o Money is being made through a cycle of taking raw materials from colonies & making a product
o Sell product to colonies
o Make money
  Needs & accepts foreign investment, expertise, & education (pre-conditions before doing anything)
 Investment in education & training – base of economic growth & stability
 All nation-states follow same stages of development

In Africa, countries are following the method of western industrialization & building factories.

- They do not have the money for it; they accept foreign investment & expertise
- Often this comes from their former colonizers
o FDI: foreign direct investment – receive money from foreign country
o Expertise – sent foreign workers who help set up the factories

However, factories alone are not enough to make a stable economy

- Governments believe you must invest money into education

- More educated population = more skilled workers
- Better products made
- More efficient

They believe that modernization must be followed in the exact same movement through the 5 stages of development

1. Traditional society (farming)

2. Preconditions for take-off (good education, FDI, expertise needed)
3. Take-off (massive production) – we want to meet some demand
4. Drive to maturity (becoming profitable)
5. High mass consumption (spending money) – reintroducing the money back into the economy, so the economy
recirculates

“Take off” is the idea that you start manufacturing & building factories which is then going to produce revenue & profit.

Criticisms:

- Does not involve globalization

- Modernization is heavily tied to “west is best” – not always a true statement
- Focuses only on macroeconomic indicators
o The Chinese economy followed this theory – built thousands of factories over a few decades
o China fueled their factories through coal since it was cheap – huge amount of pollution
o Their economy was propelled very well – manufacturing works if you do not consider these things
- Neglects factors such as quality of life & equality
o If we mimic the west, do we all have to engage in slavery & exploitation to develop? Is it best to develop
only economically?
o We only focus on the actions

Dependency Theory:

Core Tenets:

Poor nations have been feeding the richer nations’ economies

- Past dependencies between countries need to stop

- They must become independent through state regulation of economy
- State protects domestic industries from competition (protectionism)
o This is making rich nations richer & making it unfair for poorer nations who cannot compete with this
 o Extremely high taxes & tariffs on foreign goods
- Foreign investment is severely restricted (kick out foreign investment (stop accepting FDI))
- Many cases the state buys the companies & makes them public
o e.g., the Nigerian government kicked BP (British petroleum) & made their oil companies public
o Everyone wants oil so Nigeria decided they could control the price as they liked & they would be able to
sell & be financially independent
- Investment in monocrop is discouraged
o This is so that they had more than just one product to sell
o This is a remnant of European colonialism
o However, if you grow everything you are not specialized
o You have diluted your skills
- The consequences of this means that countries become Isolationist and it means that the products you make
might not be as good quality

Criticisms

- Too simplistic and reactionary

o The belief the “outside world” is the bad guy
o What happens when we cut off too many trade partners?
- Overlooks major internal factors such as corruption & inefficiencies
o The economic development is there but is not experienced by the public because the money is not being
spent on the country
o Without the foreign experts – it becomes hard to meet international standards
- There is no balance

Market Fundamentalism (Neoliberal Theory)

- Free market economies lead to productivity  Increasing wealth of all nations

- Minimizing the role of the government
- Promotion of private investment & management
- Trade liberalization (open borders to more & more nations)
- People are more productive because there are more educated consumers & producers which encourages
growth
- The power is in private investment as they believe a free market does things more efficiently
- For this to be achieved, the government needs to have little involvement

Criticisms

- Does not address dependency theory (specifically corruption)

- Promotes economic interest but at the expense of:
o Equity, social justice, employment, & environment protection
 e.g., Brazil believes in this theory & that their beef is the best
 They burned down the Amazon Rainforest so that they could have more farmland & grazing land
for their cows
 This did create economic growth & development, but it destroyed the environment &
Amazon Rainforest

There is a different idea that came into effect in 1983

When you begin to look at development from “bottom-up”

 - Focus on the poorer people first
- Make sure the people are doing well & not wait for the government to do something
- If you support the lowest money receiving people in society, you can build the economy all the way up
- Asks the question: “why should we depend on the government?”

This is the theory of microfinance

- Debt management & humanitarian aid – country level development

- It was invented by a Bangladeshi man – Muhammad Yunnus
- Grameen Bank in 1983
o This was a bank that gave loans to people regular banks call “high risk”
o Women & people who have never had a job, a large family
o He promised to give them small, short loans regardless of their current situation if they told him what
business they would open up
- Percentage of borrowers moved out of poverty average +5% every year. The idea was very effective that it was
adopted by the UN:
o when they look at the sustainable goal of “no poverty,” they measure how many people are using
microfinance successfully & are coming out of poverty because of microfinance
- However, there is a lot of people who claimed what he was doing was wrong, that he should be giving charity &
not making a bank
o He argued that by giving money to people below the poverty line as a loan, it gives them responsibility &
a way to learn how to manage their money
o He wanted to give people a chance to make something instead of buying only their necessities as that is
all they know how to do
o They also reward those who pay back their loans by saving some of their instalments to give to them
extra money so they do not start at 0 by the end of the loan

Criticisms

- Sometimes these loans are too small to start a business

- It creates cycles of debt/lending dependency
- It does not consider cultural values and just applies an economic idea
- Some have interest bearing loans – “they benefit from the poor”
- Does not end poverty for most of the people – it may help them go above the poverty line but hard to go further

Dependency theory: no foreign influence whatsoever

Market fundamentalism = neoliberal development theory

 Palestinians – voted for Mahmoud abbas and hamas, they have cultural unity, political sovereignity to an extent,
1992 when yasra rafat became first Palestinian president.
 No territorial integrity – given observer status
 UN has two missions – peace keeping – negotiated and mediated . go through a process
 Second mission