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Chapter 13: International Development
Economic Development
- The combined processes of capital accumulation, rising per capita incomes the increasing of
skills in the population, the adoption of new technological styles and other related social and
economic changes
- Most of the global south made profess in economic development in the 1970s with real per
capita GDP growth of almost 3 percent annually
- This rate was a higher than the global north
- In 1980s economic development halted, with the exception of Asia
- Per capita GDP decreased from 1981 to 1991 in Latin America, Africa, and the Middle East
o While china had a 7% annual growth
- 1990a, real economic growth reached to about 5-6% annually as a whole, and even higher in
china
- In the 200s, growth accelerated in the south and now out paces the north
- Economic liberals tend to favour the concentration of capital as a way to spur investment rather
than consumption
- Capitalists favour development paths that tie states of the south to the world economic and
international trade
o They argue that although such development strategies defer equity, they maximise
efficiency
o Once a developing state has a self-sustaining cycle of accumulation, it can better redress
poverty in the broad population
Human Development Index
- An alternative measure of development to GDP
- Measures a country’s achievement in areas of life expectancy at birth, knowledge, adult literacy,
school enrollment, and standard of living
- The United Nations Development Programme publishes annual Human Development reports
that compare HDI rankings
- Critical theorist argue that meaningful development should improve the positions of the whole
population and the poor
o Advocate a more equitable distribution of wealth
o Do not see the north-south disparities as justified by global growth benefits
o Favour political actions to shift income
- In reality most countries use a combination of critical theorist and economic liberals
- Welfare capitalism distributes enough wealth to meet the basic needs of many while letting
most wealth move freely in capitalist markets
The Newly Industrializing Countries
- Have achieved self-sustaining capital accumulation, with impressive economic growth
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- Semi periphery states, export light manufactured goods, posted strong economic growth in the
1980s and early 1990s
- Encountered serious problems in the late 1990s because growth had been pushed too fast with
overly idealistic loans, speculative investments and corrupt deals
- Four most successful NIC= Four Tigers
1. South Korea
o Iron and coal resources, developed competitive steel/automobiles
o In 2004 SK and Canada announced plans to open up bilateral free trade negotiations,
and by April 2007 they had conducted 10 such meetings do focusing on such issues as
cross-border trade in services, financial services, investment, government procurement,
intellectual property, and e-commerce
2. Taiwan
o Strong state industrial policy
o Specializes in electronics/computer industries
3. Hong Kong
o Controlled by china
o Competitive electronics industries
o Greatest strength = banking/trade
4. Singapore
o Trading city
o Canada is involved in negotiations with Singapore to establish a free trade agreement,
though progress seems slowed than in the SK
o In 2005, Canadian merchandise exports to Singapore totalled $637 million, while Canada
imported $973 million
- Beyond the four tigers, other southeast Asian countries have tried, since the 1980s to follow
their footsteps
1. Indonesia
o Set a goal in 1969 to become next NIC
o Fell short but did make progress
o Major asset is cheap labour, and natural resources, including oil
However, decreasing production of oil has caused them to have to import it
o 2004 tsunami set back the economy
2. Malaysia
o Exports oil and gas
o Heavily focused on electronics
o Hit hard by the dot-com crash in 2001
3. Thailand
o Received enormous FDI in 1980s, which created large middle class
o At the center of 1997 financial crisis
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The Chinese Experience
- One of the fastest growing developing economies in the world
- Average annual growth rates of over 9% over the past 25 years
- Canada’s second largest trading partner
- Economic policy emphasized national self-sufficient and communist ideology
- Iron rice bowl policy, guarantees basic food
- After Mao died in 1976, China instituted economic reforms under Deng Xiaoping and
transformed its southern coastal provinces into free economic zones open to foreign investment
and run on capitalist principles
- New class disparities are emerging, with rich entrepreneurs driving fancy imported cares, while
poor workers find themselves unemployed
o Earlier social guaranteed everyone employment despite reduced efficiency
- Popular resentment over such problems as inflation and corruption led industrial workers and
even government officials to join students in antigovernment protests at Beijing’s Tiananmen
Square in 1989
- Authorities used the military to violent suppress the protests, killing hundreds of people and
signalling their determination to maintain tight political control while economic reform
proceeded
- This policy of combining economic reform with political orthodoxy was reaffirmed at the party
congress in 1992, 97, 02
- President Hu consolidated his position in 2004 as his predecessors relinquished control of the
military
- Hu’s top priority is to address the growing inequalities between the country’s newly rich and the
poor
- 2001 membership to WTO
- Some observers expect economic integration in an information era to open up political system
and lead to democratization
India Takes Off
- From 1996-2006 average annual growth exceeded 7%
- Could be a repetition of china’s success
- Until recently India’s economy was based loosely on socialism and state control of large
industries but on private capitalism in agriculture and consumer goods
- Elections in 2004 forced out a government the long-standing ruling party, the Hindu-nationalist
Bharatiya Janta Party, widely considered corrupt
- 1991 Soviet Union collapse (India’s major trading partner) cause economic crisis for them
- Sought help from the IMF and WB, and committed itself to far reaching economic reforms such
as reducing bureaucracy and selling money-losing state owned industries
- Niche is service and information sector
- Labour force is well educated/speaks English
- Location is an advantage cause they work during out nighttime
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