Developing and

Less-Developed Countries

What does this have to do with the Third World?

What is the connection between this image and the previous one?

Why study the Third World?• Western role in creating and sustaining

some of the problems in the Third World

Terminology Developing countries Underdeveloped countries Less developed countries

(LDCs) Third world countries

While referring to underdeveloped countries many different terms are used. The terms used are intended to describe the stage of development of these countries in comparison to those that are more developed. As a result, the terms used are almost always in pairs. The most dramatic way of referring to the two sets of countries is to make a distinction between backward and advanced economies, or between traditional and modern economies. As the term "backward" carries a negative connotation, it is rarely used these days. It is much more popular to put all countries of the world on a continuum based on the degree of economic development. Using this criterion, several pairs of terms are employed in distinguishing countries with different degrees of economic development—developed and underdeveloped countries, more developed and less developed countries (the latter are often simply referred to as LDCs), developing and developed economies. As the terms "less developed countries" and "developing countries" embody a sense of optimism, their use has become commonplace. Developed countries are also referred to as industrialized countries. Countries that have recently developed are referred to as the newly industrialized economies.

Read more: Economic Development - benefits http://www.referenceforbusiness.com/encyclopedia/Eco-Ent/Economic-Development.html#ixzz1GafhEdtC

Third World countries

Issues in Common:• Poverty• Low GNPs• Trade dependency• Weak States –

– Fragile democracies– Single-party regimes– Military regimes– Personal dictatorships– Failed states

• Environmental Threats• Cleavages and Conflict

– Identity – ethnicity– Religion– Traditional structures – patron-client relations

• Globalization

Why study the Third World?

• Interdependence and globalization

• most of the world– population– area

• most of the natural resources– raw materials and energy resources– Organization of Petroleum Exporting

Countries

Newly Industrializing countries Newly Industrializing Countries – some

countries have experienced economic growth and democratization in the last few decades, ex. South Korea and Mexico and Iran but without the democratizationCompressed modernity – rapid economic and political

change that transformed the country into a stable nation with democratizing political institutions, a growing economy and expanding nongovernmental institutions.

Less Developed Countries

Ex. Nigeria Political and economic change but not

democratic characteristics Economic difficulties Political instability Authoritarian rule

ECONOMIC DEVELOPMENT

Millennium Development Goals

In 2000 the UN Millennium Declaration was adopted at the largest-ever gathering of heads of state

Millennium Development Goals

eradicate extreme poverty and hunger achieve universal primary education promote gender equality reduce child mortality improve maternal health combat HIV/AIDS, malaria, etc ensure environmental sustainability global partnership for development

• https://www.youtube.com/watch?v=SXB1Z_CxBK0

Economic development

Can reinforce political development Based on free market capitalism

Economic liberalization – expanding private ownership

Marketization – allowing free market principles to govern the economy

Measures of economic development Gross National Product (GNP) - the total market

value of all goods and services produced in the country Provides limited information about the economic and

human conditions of the people living in a particular economy

Purchasing Power Parity (PPP) – statistical tool that estimates the buying power of income across different countries using US prices as a benchmark (takes into account each country’s cost of living)

GDP & PPP

https://www.youtube.com/watch?v=MLSIjW5cDes

Comparing Economic Sectors Primary economic sector – agriculture, raising animals, fishing,

forestry, mining. Draws raw materials from natural environment. Largest in low income, pre-industrial nations.

Secondary economic sector – industry. Transforms raw materials into manufactured goods. Includes such operations as refining petroleum into gasoline, turning metals into tools and automobines.

Tertiary economic sector – economy focuses on services rather than goods. Dominant in post-industrial societies, countries where most people are no longer employed in industry. Examples of tertiary jobs are construction, trade, finance, real estate, private services, government, transportation.

COMPARATIVE ECONOMIC SECTORS (as % of labor force by occupation)

COUNTRY PRIMARY SECONDARY TERTIARY

China 38% 46.9% 43%

Iran 25% 31% 45%

Mexico 13.7% 23.4% 62.9%

Nigeria 70% 10% 20%

Russia 10% 31.9% 58.1%

United Kingdom

1.4% 18.2% 80.4%

From: CIA World Factbook, 2010

PPP for the AP 6COUNTRY PPP in US $

United Kingdom $34,800

Russia $15,900

China $7,600

Mexico $13,900

Iran $10,600

Nigeria $2,500

From: CIA World Factbook, 2010

Why is there lack of economic development in LDCs?1. Due to NEOCOLONIALISM - LDCs are

in an unequal relationship in a world in which indirect forms of imperialism are at play. They have to play by the rules of the more advanced countries without the opportunity of catching up.

Why is there lack of economic development in LDCs?2. Their traditions do not allow them to follow

the path to modernization which is equivalent to westernization. This path is based on the model of industrialization set by Great Britain as the first to industrialize and then applied by other European nations and the US. It is believed that old values and beliefs are hindering progress.

Why is there lack of economic development in LDCs?

3. Dependency Theory – the economic development of many countries in the world is blocked by the fact that industrialized nations exploit them. How can a country develop when its resources, natural

and human, are controlled by a handful of prosperous industrialized countries?

Based on Marxist ideology of class exploitation Opposes the Westernization theory of development Led to LDCs turning to socialism and nationalizing

industries to narrow the gap between rich and poor

‘core’ v. ‘periphery’ – dependency theory

ECONOMIC POLICIES USED IN THE LESS-DEVELOPED WORLD TO JUMP START

THEIR ECONOMIES

Import substitution Governments in poorer countries must create more

positive conditions for the development of local industries

In order to protect local industries imports must be restricted so they set quotas or impose heavy import taxes. The rationale is that this will make imports more expensive and

people will have to buy locally so there will be increased demand for local products which will stimulate further growth of domestic businesses. Eventually these industries will grow enough to be able to compete internationally, that is, export their products.

Export-oriented industrialization Used by the “Asian Tigers” – Hong Kong, South

Korea, Taiwan, Singapore Integrates the country’s economy into the global

economy by concentrating on economic production that can have a place in international markets. An innovator country produces something new That country moves on to new innovations Other countries think of ways to make the first

product better and cheaper and export it back to the first country. Example, electronics and cars

POLITICAL DEVELOPMENT

Review of democratization

A state moves from a procedural democracy, which is…

Review of democratization

A state moves from a procedural democracy, which is… a state that holds regular, competitive elections to a substantive democracy

A substantive democracy is a state that …

Review of democratization

A state moves from a procedural democracy, which is… a state that holds regular, competitive elections to a substantive democracy

A substantive democracy is a state that … not only has regular competitive elections, but it also has civil liberties, rule of law and open civil society

Types of states• strong states• weak states

– multi-party democracies– single-party regimes– military regimes– personal dictatorships

• failed states – a state that is so weak, it collapses resulting in anarchy and violence - Nigeria