Development Gap and Its Bridging

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<ul><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 1/19</p><p>1</p><p>WHAT ACCOUNTS FOR THE DEVELOPMENT GAP BETWEEN THE DEVELOPED</p><p>COUNTRIES AND THE LESS DEVELOPED COUNTRIES? SUGGEST WAYS BY WHICH</p><p>THIS GAP COULD BE BRIDGED</p><p>The term development gap is used by social scientists to refer to developmental</p><p>differences that exist between mainly the western rich and industrialized</p><p>countries and the poor third world countries. The developed countries consist of</p><p>countries to the north and east of the Brandt Line, whereas the less developed</p><p>countries comprise of about 152 countries geographically south of the line. The</p><p>so-called Brandt Line was first used in 1981 in the report of the West German</p><p>Chancellor, Willy Brandt. That report sought to geographically demarcate</p><p>between the global north and global south.</p><p>Defining Development</p><p>Gunnar Mydral (Journal of Economic Issues, 1974; pg 729) defined development</p><p>as the upward movement of the entire social system. According to him the social</p><p>system includes economic factors as well as non-economic factors including all</p><p>sorts of consumption by various groups of people, as well as the combined</p><p>consumption of society. In plain language development can be considered in</p><p>three contexts namely social, political and economic</p><p>Measuring Development</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 2/19</p><p>2</p><p>There are various indicators in these contexts to which one can point to and in</p><p>order to be able to say country A is more developed than country B. While it is</p><p>quite easy to point to a rich country it is not necessarily the yardstick to measure</p><p>development. For example a global south country, South Africa with a Gross</p><p>Domestic Product, GDP (2010) of $277.46 billion appears richer than the global</p><p>north Bulgaria which had a GDP of $96.79 billion (Wikipedia, Internet</p><p>Encyclopedia, June 3, 2011). Although the GDP per capita for Bulgaria ($12,851) is</p><p>bigger than that for South Africa ($10,136), in terms of Purchasing Power Parity,</p><p>PPP South Africas per capita amount can do more than that for Bulgaria. That</p><p>Bulgaria is considered a developed country but South Africa is not in the face of</p><p>this fact may sound implausible but fact is, a combination of factors go into</p><p>determining the development status of any country. How is the wealth</p><p>distributed among the population? How many of the adult population are</p><p>literate? What is the child enrollment ration in primary, secondary and tertiary</p><p>schools? What about access to health services? Development therefore is a</p><p>complex issue involving socio-politico-economic factors. The United Nations, UN</p><p>and other international development institutions use three indicators to measure</p><p>development. These are the GDP, the Gross National Income (which like the GDP</p><p>measures the total value of production plus production from foreign</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 3/19</p><p>3</p><p>investments), and Human Development Index, HDI (a composite index based on</p><p>life expectancy at birth, adult literacy rate and school enrollment, and GDP).</p><p>Now, the gist of the economic development gap between the developed and the</p><p>underdeveloped worlds can be seen from the facts below. The GDP for the whole</p><p>African continent for 2009 was about $500 billion which ranked 17th</p><p>after the GDP</p><p>for the Netherlands. The developed Global Norths 56 countries with a population</p><p>of 1,029 million, growing at a rate of 0.4% (2005 2015) have a combined GNI of</p><p>$37,529 billion equivalent to $37,529 per capita whereas the Global Souths 152</p><p>countries with a population of 5,489 million growing at a rate of 1.2% average</p><p>(2005 2015) have a combined GNI of $10,978 billion equivalent to $2,000 per</p><p>capita (Kegley Jnr, C. W; World Politics, Trend and Transformation, Table 5 pg</p><p>126). Thus the combined economic strength of 56 countries is more than three</p><p>times that of 152 countries!</p><p>Reasons for the Gap</p><p>Colonialism</p><p>The genesis of the whole saga of underdevelopment in certain continents is the</p><p>issue of colonization. Countries that formed the nucleus of the first world and</p><p>incidentally developed industrial economies first namely, United Kingdom, France,</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 4/19</p><p>4</p><p>Germany, Spain, Portugal, and Italy were the same countries that scrambled for</p><p>colonies in Africa, South America, and South Asia. It is not by coincidence that</p><p>these areas of the world constitute the Global South or less developed countries</p><p>of the world. The colonizers adopted a policy to plunder the natural resources to</p><p>enrich their various countries, and even in some cases the human resources (as</p><p>slaves) to provide the necessary labour for their development projects.</p><p>The colonizers constructed roads, built bridges, railway line and ports to facilitate</p><p>the collection of raw materials and export them. The legacy they left in terms of</p><p>education and political system did not also help the development of the Global</p><p>South countries. The educational system inherited from the colonial masters was</p><p>not development oriented. There were very few if any business schools to teach</p><p>entrepreneurial skills as well as technical and polytechnics to train middle level</p><p>technicians needed for national infrastructural construction. The colonizers</p><p>needed teachers for primary and middle schools and that is why they set up so</p><p>many training schools. They were only interested in training people who would d</p><p>manual work for them (Ake Claude, Democracy and Development in Africa).</p><p>Corruption of Leaders</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 5/19</p><p>5</p><p>Corruption of leaders has long been an issue in many less developed countries,</p><p>especially in Africa. Right from the post independence era to date there is high</p><p>perception of corruption in officialdom. The political legacy inherited after</p><p>independence was that of absolute and arbitrary power in a statist economy. This</p><p>situation made the quest for political power a fierce contest full of acrimony</p><p>among the elite politicians. According to Claude Ake political intensity was further</p><p>reinforced by the tendency to use state power for accumulation. This practice was</p><p>associated with the weak material base of the new political leaders, who had</p><p>been economically marginalized by the discriminatory economic policies of the</p><p>colonial regime. They had little or no experience of entrepreneurial activity and</p><p>little or no capital when they came to power. Invariably they had to explore the</p><p>one leverage they had: control of state power to strengthen their material base</p><p>(Ake C; Democracy and Development in Africa pg 9).</p><p>Thus right from post independence many African leaders used political power to</p><p>amass wealth. This trend has continued to date there is so much talk about</p><p>corrupt government officials. In Ghana for instance the perception is very high</p><p>because people who hitherto had almost nothing to write home about start</p><p>acquiring properties and live ostentatious lives soon after joining government.</p><p>The third and fourth in rank of the first five of the 10 most corrupt leaders in the</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 6/19</p><p>6</p><p>past two decades are Africans. They are Mobuto Sese Seko who was accused of</p><p>embezzling $5 billion followed by Sani Abacha whose figure is put at $2-5 billion.</p><p>These are the biggest so one can imagine that there are several hundreds that do</p><p>not reach the international media. Nonetheless corruption is an important source</p><p>of drain of national wealth which could otherwise be used to improve the quality</p><p>of lives of several citizens.</p><p>Poor Planning and Incompetent Management</p><p>Poor planning or the lack of it in Ghana, the rest of Africa and other poor LDCs is</p><p>certainly one of the reasons for underdevelopment. It is unbelievable that in</p><p>present day Ghana several streets have no names and houses are given arbitrary</p><p>numbers that do not fit into any logical system. Electricity line are running</p><p>everywhere, roads can hardly be widened without having to demolish buildings</p><p>built through toil and sweat. When new layouts are made no allowances are</p><p>made for play grounds, community centers markets, lorry stations etc. The</p><p>District Assemblies look on helplessly while physical development goes on</p><p>haphazardly without the least regard for safety, necessary accesses to hydrants</p><p>etc. There is a saying that if you fail to plan, you plan to fail. Governments over</p><p>the years have not made sure that the responsible institutions perform their</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 7/19</p><p>7</p><p>statutory roles effectively. Metropolitan, Municipal, and District Assemblies are</p><p>exacting taxes from people who have illegally occupied unauthorized spaces</p><p>thereby condoning and legitimizing these wrong practices. Managements of these</p><p>state organs who are not performing rightly cannot be said to be competent but</p><p>in Africa the non-performing sycophantic managers are rather commended and</p><p>rewarded with long tenure. The blame can be placed at the doorstep of the</p><p>Ministry of Local Government and Rural Development which also has supervisory</p><p>responsibility for the Metropolitan, Municipal, and District Assemblies.</p><p>Lack of Entrepreneurial Skills</p><p>Having followed the flawed educational legacy from the colonizers, most LDCs</p><p>have not been able to produce graduates with relevant entrepreneurial and</p><p>technical skills required for moving their countries from subsistence agricultural</p><p>based economies to industrial and consumer based ones. In Ghana for instance</p><p>successive governments have either played politics with the education structure</p><p>or paid lip service without doing enough to effectively transform it to reflect the</p><p>needs of todays markets. The result is that there is so much unemployment in</p><p>nearly all LDCs and particularly, Ghana where this is evident through mass street</p><p>hawking, graduate unemployment, and teeming youth without employable skills.</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 8/19</p><p>8</p><p>Every student wants to get a university degree to be employed by others without</p><p>thinking of self employment because the universities do not teach</p><p>entrepreneurial skills. Technical schools which some twenty to thirty years ago</p><p>produced the core of technicians and artisans for the production sectors have</p><p>now become a thing of the past. Nearly all the famous ones have either collapsed</p><p>due to low enrollment or lack of facilities and equipment. The combined effect of</p><p>the situation is that artisanal work and the small scale sector are not able to</p><p>provide the required base for national industrialization effort.</p><p>Poor Labour Discipline</p><p>LDCs are invariably characterized by poor labour discipline. The time</p><p>consciousness of employee, attitude toward work, respect of laid down</p><p>regulations and procedures leaves much to be desired. In Ghana for example</p><p>people try to justify lateness to functions by saying Ghanaian time implying the</p><p>Ghanaian time is always some 30 minutes to one hour later than the officially</p><p>indicated time. One can easily find workers leaving for break 30 minutes before</p><p>and resuming 30 minutes after the officially indicated times. The irony is that</p><p>people do these things with impunity, as if nothing is wrong with the habit. It is</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 9/19</p><p>9</p><p>therefore no wonder that productivity is generally low, just as remunerations are</p><p>also low.</p><p>It is commonplace that the years between 1300 and 1650 saw within the</p><p>intellectual culture of western Europe important changes in the apprehension of</p><p>time (Lewis Mumford, Technics and Civilization, 1934), Cipolla Carlo M, Clocks and</p><p>Culture, 1300-1700; 1967), (Hall E. T; The Silent Language, 1959). From the</p><p>previous paragraph it is clear those employees in less developed countries,</p><p>especially those in Africa who perceive their incomes to be too low do not</p><p>appreciate the monetary value of time. If they did they would rather bargain for</p><p>less hours work commensurate with their incomes (perceived as low). As far back</p><p>as the mid 17th</p><p>century English commercial farmers like Henry best of Yorkshire</p><p>very much appreciated the money value of time and thus calculated labour</p><p>output in terms of daywork (Robinson C. B; Rural Economy in Yorkshire in 1641</p><p>).</p><p>Ethics at the work place is another aspect of labour indiscipline which affects not</p><p>only employees but the employers also. Although there have been recorded</p><p>unethical issues leading to failures of big time businesses like Enron in the</p><p>developed world, there are several unrecorded unethical behaviours of</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 10/19</p><p>10</p><p>management personnel in LDCs and particularly Africa that contribute to</p><p>indiscipline and low productivity at such workplaces. There have been instances</p><p>of sexual harassment, shady deals involving contracts and other financial</p><p>transactions. Often the lack of uprightness of management personnel removes</p><p>their moral courage to sanction subordinates who indulge in similar or other</p><p>unacceptable behaviour for fear of blackmail.</p><p>Falling Commodity Prices and Unfavourable Terms of Trade</p><p>The advanced and industrialized nations have taken over the core business of</p><p>manufacturing capital goods and essential items that fetch lots of money while</p><p>they have assigned, as it were LDCs to the periphery where they can only produce</p><p>primary goods (mainly raw materials) to feed the industries in the advanced</p><p>countries (Handelman H; The Challenge of Third World development, 2000),</p><p>(Baer, W; The Economics of Prebisch and ECLA, 1969), Andre Gunder F; Capitalism</p><p>and Underdevelopment in Latin America, New York Monthly Review Press, 1967),</p><p>(Baran P; The Political Economy of Growth, New York Monthly Review Press,</p><p>1957). The value of primary goods is low and to make matters worse the</p><p>industrialized countries or their agents determine the prices to be paid for such</p></li><li><p>8/6/2019 Development Gap and Its Bridging</p><p> 11/19</p><p>11</p><p>goods. The effect is that LDCs produce lots of tones of primary goods but earn</p><p>little.</p><p>Global commodity markets are increasingly dominated by fewer global</p><p>transnational corporations that have the power to demand low producer prices,</p><p>while keeping consumer prices high, thus, increasing their profit margins.( Ziegler</p><p>J; The Right to Food, Report submitted by the Special Rapporteur on the right to</p><p>food). Low incomes from primary exports are a problem indeed to LDCs. Over the</p><p>past two decades the prices of nearly all the major agricultural commodities</p><p>declined in real terms. According to UNCTAD, comparisons of the prices of</p><p>agricultural raw materials and food and beverages in 2003 with 1980 prices show</p><p>a drop of 60% and 73% respectively. Coffee prices in 2003 were a mere 17% of its</p><p>1980 value, and cotton prices were 33% (Ibid; p.126). One of the effects of these</p><p>price declines is the deterioration in the terms of trade for commodity-dependent</p><p>countries that far from benefiting from trade liberalization are encumbered</p><p>with greater debt. From 1997 to 2001 alone, the combined price index of all</p><p>commodities fell by 53% in real terms, that is, commodities lost more than half</p><p>their purchasing power in terms of manufactured goods (UNCTAD, Economic</p><p>Development in Africa: Trad...</p></li></ul>