What factors have led to contemporary differences in development? (Causes…
What factors have led to contemporary differences in development?
Physical, economic, social, political and cultural factors affecting the rate and nature of development.
Case study of Malaysia's development
Case study of the European countries
Case study of Niger's development
The globalisation of economic activity and the rise of NICs/RICs and oil-rich countries
Two of the significant groups
Oil Rich nations
The 1970s saw huge increases in the price of oil as Arab countries withheld supply. This meant that any developing country with oil suddenly had a source of great wealth. Those without faced a major disadvantage as they too had to pay the inflated price. Countries with oil spent the money investing in alleviating poverty and promoting education and health.
Many also invested in industries that refined oil adding value to their export. Additional profits were invested in overseas ventures or loaned to other countries. As a result many of these countries found great wealth e.g Suadi Arabia.
Newly Industrialised Countries (NICs)
Countries that have recently experienced substantial growth in their manufacturing output and consequently exports. Examples are Taiwan, Singapore, S. Korea and Hong Kong.
Firstly the country invests in industries that can produce goods that they would normally import and supports these industries by putting extra taxes on imported goods to make them un-competitive. Then when these industries are established they replicate products available n the world market, concentrating on high-tech industries, first copying then improving. The economy typically grows 6-8% a year.
S Korea took advantage of its links to the USA. The USA, EU and Japan provided the country with aid payments so it could invest in iron, steel, textiles and chemical so it no longer imported these. It imported raw cotton and developed a textiles industry. Once they were established it exported products such as TVs, computers and other electronic appliances.
The opportunity to develop and the rate of which development has been taken place has been much influenced by the globalisation of the world economy. The largest aspect of this has been outsourcing manufacturing from developed countries into other parts of the world. This has encouraged home-grown manufacturing in areas surrounding the focus of this activity. Tertiary activity has also moved out. Much of this has been low-skill work. However, higher end activities have also moved out such as software design.
Greater economic integration has stimulated development. Huge reserves of money generated by newly industrialised economies has made capital available to stimulate the establishment of new economic activities. The increased scale of the world economy has stimulated the extraction of raw materials and energy sources, increasing their prices and injecting income into economies that have previously shown little sign of beginning to grow. It would be wrong to class the entire developing world as being exactly the same, differences exist not only between countries but within countries.
Within global regions, the level of development is often similar. Most European countries are well developed; most African countries are at low development levels and many parts of Asia are developing rapidly. But within regions of the world, there are also variations dependent on resource endowment, government policy, and a wide range of other factors.
argued that all countries had the potential to break the cycle of poverty and development through 5 stages of economic growth.
Frank's dependency theory
suggests that developed countries control and exploit less developed countries. This produces a relationship of dominance and dependency, possibly leaving to poverty and underdevelopment in LEDCs.
Causes of globalisation
- the generic term for the process of integration of countries in the realms of trade, financial,social,cultural and economic relations.
Supra national organizations
- promote trade between countries e.g WTO, EU, UN, NATO, IMF
Transport and communications
- enabled physical movement of goods and people in ever growing comfort and convenience.
- such as FDI ( companies have invested in order to take advantage of cheaper production costs)
- flow of communication faster, internet, email and video conferencing.