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09 15 Lecture Notes - The Challenge Poverty and Inequality in a Globalizing World.docx

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Department
Geography
Course
Geography 3312A/B
Professor
Haroon Akram Lodhi
Semester
Fall

Description
th September 15 The Challenge: Poverty and Inequality in a Globalizing World The 3 doctrines of development suggest that IDS is about: When we try to understand IDS 1. understanding the present 2. improving the future 3. intervening to promote good These can be • mutually exclusive You can focus on one • interdependent For example: if you want change, you must know about the present in order to undertake action th A 4 doctrine of development: if interdependent, understanding is the basis of action for change. This is the ultimate purpose of IDST 1000Y. Do we live in a world of poverty, or a world of plenty? How do we know? What's the evidence? What’s your argument? Let’s (temporarily) assume that poverty and plenty can be measured in terms of money If we do that, we can add up the total money value of all the goods and services actually produced by the citizens of countries 1. agriculture and mining 2. plus manufacturing 3. plus services and construction 4. equals gross domestic product (GDP)—ie, all that a country produces within a country 5. plus income from agriculture, mining, manufacturing, services and earned abroad 6. equals gross national product (GNP)—ie, all that the people from a country produce in the world 7. divided by the population 8. equals GNP per person GNP per person (and GDP per person) provides a way of measuring the incomes of countries and peoples, as what is produced has to be used, and this means it has to be sold Agriculture + manufacturing + services = GDP + previous figure earned by Canadians outside of Canada= GNP/population = GNP per person If something is made, it is sold. Nominal GDP per person in 2006: The North has a higher level, reflecting lots of production of goods and services and relatively lesser numbers of people The South has lower level, reflecting relatively lesser production of goods and services and greater numbers of people The North has a lot – North America, Western Europe, Japan The South has less goods in total – less goods per person. Note this, though: this is an average, and averages deceive! Assume we have 200 people in this room, and 199 have an income of $1 a day and 1 person has an income of $10000 a day: average income is $50.99 each That figure is positively misleading, because it hides the extreme inequality that distorts the average So: when looking at any average, it is extremely important to know the distribution of the information that you are looking at A cartogram of the world with size of country determined by total GDP in 2002 '… for the citizens of most countries today, the success of their economy in the harsh world of global competition is of paramount importance.' Deanne Julius, 2005 Alternatively: countries compared to the economic size of US states in 2009 Global institutions don’t compare countries on this basis: they suggest that cash incomes should be: • adjusted to account for the cheaper cost of services (haircuts, eating out, household help) in poorer countries • adjusted for differences in inflation Adjusting cash incomes so that an amount of money can buy an identical bundle of goods and services gives us purchasing power parity (PPP) incomes—most popularly, the Big Mac index Services like hairdressing are cheaper in developing countries because you pay primarily for the person’s wages – labour is cheaper there. I.e. The Big Mac – the same things go into a Big Mac, so any price difference is caused by wages (or labour differences) Average per capita income by countries in 2005 in PPP dollars Incomes are higher because PPP exchange rates account for the cheaper cost of services in poor countries However: the rich world is still the North Sub-Saharan Africa is poor, but so too, relative to the North, is much of Asia and parts of Latin America Remember: PPP exchange rates means that actual cash incomes are actually lower A cartogram of GDP in US$PPP in 2002 reveals the extent of global inequality North America and Western Europe have 46% of world wealth However: developing countries/emerging economies are becoming, over time, more important in total world production, especially China, India, and Brazil (the BRICs) The global economic crisis has shifted the global balance of economic power—for all time? Brazil, Russia, India, China and South Africa (if the “S” is capital) Nonetheless: clearly, the production of goods and services around the world is very unevenly distributed The haves and the have nots. • Global GNP per capita has increased about 2.8 per cent per year since 1960, barring 2008 • North America, Western Europe and Japan produces the vast majority of the world’s output, and thus production per person is 80 per cent greater, on average, than that in Africa, parts of Latin America, and parts of Asia • Sub-Saharan Africa in particular has production per person which is one-tenth of that in North America, Western Europe and Japan • This understates global production inequality because it is based on national averages, and within countries there is also an uneven distribution of production, and thus of incomes This shows the difference in averages between countries, but the averages themselves for the country are still deceiving. GNP and GDP are important mainstream measures of ‘development’  there is a loose association between per capita income and lifespan, health status, literacy, and other development ‘indicators’  all countries are encouraged by the UN to measure GNP and GDP the same way  thus, GNP and GDP is easy to compare across countries However, GNP and GDP have problems: ‘the welfare of a nation can…scarcely be inferred from a measurement of national income’--Simon Kuznets, ‘inventor’ of GDP For example: • spending on prisons adds to GDP, implying that more prisons are good for society • Canada’s 2006 per capita GDP of US$36687 is below the US figure of US$43968 • but tens of millions of Americans cannot access health care before 2014 • more Americans live in poverty than the total population of Canada GDP and GNP are useful for comparing averages but they cannot tell you everything about development. The dollar figure doesn’t mean everything. Simply: a single figure cannot summarize everything • they only count those things that go through the market » housework? • they make no judgment about the worth of an activity » financial sector? • they say nothing about social well-being » community cohesion • they count things that we may not consider to be ‘progress’ » military spending? • they say nothing about the distribution of per capita incomes between people, between and within countries Things that are not bought and sold cannot be counted. Says nothing about how “good” an activity is – is building prisons really good for that society/country. Says nothing about social inclusion. Consider this distribution: shares of country populations living on less than US$1PPP a day in 2006 A cartogram of the world showing the distribution of those that lived on less than US$1 PPP a day in 2002 17 % of the world's population, mostly in Asia and Africa India and China are huge in this – but they’re part of the BRICs. Numbers don’t mean everything. They may have raising GNP or GDP but they’re unequally distributed The World Bank estimates for suggest that as of 2005 some 1.4 billion people lived in ‘extreme poverty’ in developing countries This is based on a global poverty line of US$1.25 per day at 2005 PPP prices This is the globally-accepted measure of absolute poverty: a measure first presented in 1990 which takes the amount of food needed to physically survive—to feed, clothe and shelter themselves—and nothing else, converts it into money, and counts the number of people living on less than that amount You cannot feed & clothe yourself on less than $1.25 The figure for extreme poverty represents over a quarter of the world’s population • 42 % of India’s population • 51 % of Sub-Saharan Africa’s population It is important to stress that many of the poorest (three-quarters?) live in countries that have been rapidly 'developing' * India * China * Brazil * Indonesia So the poor do not only live in the world's poorest places Moreover, the World Bank has said that in 2004 more than 2.6 billion people live on less than US$2 PPP a day—½ the developing world’s population (Important note: according to the World Bank and African Development Bank, those on $2 PPP a day, or $1050 in today’s real money, are at the bottom end of the global middle class—a rather austere standard) A cartogram of the world showing the distribution of those that lived on less than US$ 2 PPP a day in 2002 In many countries—Mali and Nigeria, for example—9 out of every 10 people live on less than US$PPP 2 a day It is a picture of severe deprivation: 24658 children under 5 die a day of preventable causes a death of a child every 4 seconds For example: in 2003 half a million people, mostly children, died of measles, despite the fact that the vaccine has been available for 40 years and costs C$00.30 a shot It underestimates global poverty, as it only encompasses developing countries, and in the US alone in 2010 there were 43.2 million people—15% of all Americans—who were poor, of which more than 11 million were classified as being ‘hungry’ In Canada, 3 million are considered poor Indeed, in the Toronto District School Boards northwest area in 2006, a sample of 7 schools found: – 68% of students don’t eat breakfast every day » 21% never eat breakfast – 54% of students don’t eat lunch every day » 5% never eat lunch According to the school principals and vice-principals, the most important thing to make a difference in those ‘troubled’ schools: ‘Feed our kids’. So many poor people in the North share a standard of living similar to those in the South Indeed, in the Toronto District School Boards northwest area in 2006, a sample of 7 schools found: – 68% of students don’t eat breakfast every day » 21% never eat breakfast – 54% of students don’t eat lunch every day » 5% never eat lunch According to the school principals and vice-principals, the most important thing to make a difference in those ‘troubled’ schools: ‘Feed our kids’. So many poor people in the North share a standard of living similar to those in the South This is why the phrase “Global North” and “Global South” was coined – people in the North can share a standard of living of that in the South and vice versa In the US and UK around one-third of children live in poverty In the US women and children constitute 76% of those living in poverty In Canada 610000 children live in poverty The life expectancy of an Inuit born in Nunavut in 2004 was less than that of a child born in Cuba or Jordan Indeed, this is why Walden Bello coined the distinction between the global South and the global North This can help provide a snapshot of aspects of social development Life expectancy at birth, 2007 In Pakistan the women’s illiteracy rate is 92% while men’s is 75% The world at night. North America, Western Europe and Japan have light, but Sub-Saharan Africa has nothing But despite global inequality it is very important to stress: trends in life expectancy at birth, infant mortality, adult literacy and access to electricity have been improving in developing countries in the past 30 years, at historically unparalleled rates Moreover, the world's fastest growing economies, in terms of GDP, are in some of the world's poorest places – and GDP growth does lift some people out of poverty Nonetheless: poverty remains the pressing global development issue, especially as their has recently been slippage in progress In March 2009 the UN Food and Agriculture Organization announced that for the first time in human history the number of chronically hungry people in the world topped 1 billion – it has since come down a little This was a direct consequence of the global economic crisis, which hit the poor far harder than it is hit us In absolute terms, a person is poor when their standard of living is less than that which is physically acceptable as a minimum standard of living for a healthy life – basic food, clothing, and shelter As noted, global development institutions use the US$1.25 PPP a day line as a measure of extreme poverty Before 2008 extreme poverty was defined as those with less than US$1 PPP a day National governments often set their poverty lines lower—for example, in Senegal extreme poverty is set at US$0.63 PPP a day Nonetheless, absolute poverty lines are constructed, and so are contentious: they may appear to be statements of facts, but can be debated For example, according to Christopher Sarlo, the income needed to maintain a physically acceptable minimum standard of living for a healthy life for a family of four in Toronto in 2004 was $24812--$6203 per person, $119.28 a week per person, or a poverty line of $17.04 per person per day According to Statistics Canada, which allows families 20 % more than that needed for food, clothing and shelter, the income needed to maintain a physically acceptable minimum standard of living for a healthy life for a family of four in Toronto in 2004 was $37791 According to the Toronto Social Planning Council, the income needed to maintain a physically acceptable minimum standard of living for a healthy life and sustain social inclusion for a family of four in Toronto in 2004 was $48147, $231.48 a week, or $33.09 per person per day Different perspectives/measures can bring about different estimates for what is poverty. Using the Statistics Canada measure of $37791 for a family of four in Toronto in 2004: • in Toronto »
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