CICS 101 Lecture Notes - Lecture 5: Poverty Reduction, World Trade Organization, Reproductive Health

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Human Development
According to the World Bank, 20.6% of the population in the developing
world lives on less than $1.25 per day (2014)
oIn 1990, this figure was 70%
oIn 2006, this figure was 30%
oSo, it is getting better
oFor most of human history, poverty was accepted as something that
is inevitable, because traditional production was insufficient to give
people a better standard of living
According to the UN, 25 thousand people die of hunger or related causes
daily, this is due to unsustainable use of land, energy, etc.
oAbout 70% of the 25 thousand people are children, no child
deserves to come into a world that can’t feed him or her
oWe need to think of a better way to use the resources available to us
According to the Human Development Index, there are large discrepancies
in wealth among countries
oMap shows how big the discrepancies are
oWhat would the world be like if it was monochromatic? What
problems would we have to eradicate, aside from better economic
growth, for this map to stop being so colorful?
Peter Menzel: Food for a Week
Photography project in which he invited families to assemble the food they
eat in a week
Compares opposite ends of the development spectrum
“The Bottom Billion”
Collier wrote this book, “The bottom 1 billion are ‘trapped’ in poverty
despite international aid and support’
Interesting idea here because he looked around and realized most of the
economies of the world are growing at amazing speeds, child mortality is
dropping, economies are emerging, yet there is this bottom billion that
seems to be drowned in poverty in spite of national aid, they are somehow
“trapped”
Four main traps
oConflict
War is expensive and wears out resources
oNatural resources
Counterintuitive at first, but what he found is that having a
lot of natural resources doesn’t by itself make things better
The reason for that is that one of the things that happens
when you’re rich is you tend to rely on that resource and not
diversify your economy, which means other sectors of your
economy become weak and vulnerable
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Another thing that happens is those resources can become
something to fight for, governments with many resources do
not tax as heavily
This fuels corruption which is a drain on the economy
oLandlocked with bad neighbors
Intuitive, if you’re landlocked and have bad neighbors you’re
limited with who your trading partners are and it’ll be
difficult to advance
oPoor governance in small country
Has to do with corruption, if a government is corrupt it can
wear out the resources from the economy very badly
If a country is small then it’s less likely to be invested in by
large investors
Poverty Defined
“Absolute”
oTo lack basic human needs, such as nutrition, food, water, shelter,
education, and health care
“Relative”
oTo lack socially acceptable level of resources
oThis is socially defined and is dependent upon the context
oIt’s also a measure of inequality so whereas developing countries
are interested in absolute poverty, what’s of interest in already
developed nations is relative poverty, such as income below the
median in the United States
Within Absolute Poverty
There are two divisions of absolute poverty
oExtreme, less than $1.25 per day
oModerate, less than $2.00 per day
It’s important not to think of the extreme and moderate as an exchange
rate, it is already adjusted
In an interconnected world, one thing you can learn from this course is
that things that take place in one part of the world tend to eventually affect
the rest of the world
Poverty can also lead to population flows, political and economic
instability, etc.
There are ethical/moral implications but also an appeal to enlighten self-
interest, it’s in our interest that we start working on these disparities
Development
The solution to the problem is development
oA concept with a history, a philosophy, and theoretical
underpinnings, and
oA set of activities aimed at achieving better lives for people
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Colonialism
European colonial period, 16th to mid 20th century
Before we had development, we had colonialism
The European colonial powers (Netherlands, Spain, Portugal, Russia,
Great Britain) developed colonies in Asia, Africa, the Americas, etc.
They portrayed it as bringing a better standard of living
oWhether having to do with a better government, more education,
etc.
oUltimately the goal was really amassing power and wealth
oCritics of colonial projects doubted the sincerity that the objective
was bringing a better standard of living
Beginnings of the Global Economy
Mercantilism
o16th century onward, colonial powers based their approaches on this
oAggressive pursuit of export outlets and protection of domestic
markets
oThey made sure their products were competitive within their own
countries
Economic Liberalism
o18th century onward
oAdam Smith, David Ricardo
oMinimal state intervention
oWhen Smith and Ricardo came a long, they proposed less state
intervention and the idea of comparative advantage (if everybody
sells the things they can produce cheaply, everyone will benefit)
The gradual integration of the global economy and disparity in between
colonizers and the colonized
Rival Approach: Planned Economies
Idea that the economy can help regulate itself with independent
enterprises
Marx and Engels
oBelieve private ownership of means of production is exploitative,
leads to class conflict
oSo, they advocated common ownership of the means of production
The model there was basically central planning where decisions about
what’s produced and where it is made by central authorities
This places high emphasis on advantages of when the government plays
the coordinating role behind all economic activities
The Idea of Development
This idea takes off in a post WWII context
Truman Doctrine (1947)
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